In a surprisingly candid interview with Congress, Alan Greenspan, Lord of the Free Market Conservatives, admitted this week that he was wrong in his assumption that “Banks were the best at managing their own risk.” This surprising admission goes contrary to literally, 40 years of fierce support of the Conservative view of the market, wherein market entities can fix anything themselves and the government is simply a hinderance. We went on to say that the financial bailout package was both necessary and the right fix for our ailing economy.
I am enthused, that if (arguably) the loudest voice for unrestrained capitalism has begun to swing left, there is a cooler-head approach to our future. Could it be that even the most staunch supports of the free market have begun to understand that the free market is not 42? It is not the Answer to Life, the Universe, and Everything?
For those that don’t know, Corporations came into real prominence during the 17th century, most famously with the Dutch East India Trading Company, and later with the British East India Trading Company. Although the notion of corpus, Latin for body of people had existed since the Roman times, it really took hold during this pre-enlightenment era of international trade, starting around 1600 and really kicking into gear in the late 1600s and early 1700s. One of the primary focuses of the “Chartered Company” (so known at the time) was to limit the liability the shareholders of a venture – ie., if the ship sank, the shareholders could not be held liable for the capital lost on the sunk ship. At that time, and even today, I’d argue that this provision of corporate structure is vital and alive today, as it should be.
The notion of the “modern corporation” came into existence between 1898 and 1904, as market forces and deregulation became popular, the keynote moment really being Santa Clara County v. Southern Pacific Railroad which cleared the way for a new type of merger and corporate acquisition between corporate entities. Unfortunately, this ruling also is the accepted turning point for the notion of “Corporate Personhood,” an ongoing debate about how corporations should be treated to the same rights and privileges as a person, yet they retain the protection and corporate veil from government.
It is this very issue that is at the core of the current financial crisis: Corporations want unrestrained capability and the privilege of being literally, outside the law. This allows them to exercise business as they see fit, irrespective of the benefits or issues created by their activities towards the society in general. And it is here that I have my largest issue with Conservatives.
Conservatives argue that Corporations are better left alone because this is best for the country – they will find the best path forward because they are motivated by profit. I argue that profit is not necessarily the best motivation, when the betterment of the nation and our national society is at stake. The primary difference, and one that you only know if you actually have a corporation (I have many) is that you are bound by law to jealously hold the fiscal and future growth of your corporation at the forefront of every effort. Ergo, legally speaking, if dumping Mercury into a river positively affects your bottom line, then it’s the right way to go regardless of the detriment to the river, or humanity in general. Some argue the notion of “Compassionate Corporatism,” green corporations, and responsible business are the future – I’d argue that these are anomalies and are contrary to the nature of a corporation. There will be people that see long-term enough to know that dumping mercury into a river will eventually hurt the corporation because it kills it’s prospective customers, but most will continue to not give a damn, being more interested in the next quarters earnings report.
Government, for however much you may despise how slow it works or ineffectual it is at times, is supposed to have, as it’s primary mission, the benefit and protection of it’s people. Ergo, it is in direct conflict with the corporate charter and is the only real enemy that a corporation has to it’s future growth, because the government – a “board of directors made up of the body of the nation” can issue orders that countermand efforts of the corporation.
Over the last 30 years, seeing that Government has become more effective at stopping Corporations from doing what they want, conservatives (the collective patron saint of corporate privacy) have assumed a new tact: they have fostered an irrational contempt and propagated a contemporary myth that Government is the enemy, and is the reason for poverty, lack of national growth etc. The corollary to this has been a peculiar political state, where people actually vote contrary to their own interests because they’ve been convinced that the free market is better at taking care of them (or more precisely, for “creating opportunity”) than the government. Why is this contrary to their own interest? Because government is supposed to protect them, corporations protect themselves. Irrespective of what’s best for (the collective you), the corporation will navigate the future with the impetus of what is best for itself.
This piece is not to say that government is the be-all-end-all and CERTAINLY not the most effective entity around. In fact, it is our patriotic duty to both question and audit our government at every turn, because as I mention in those last few words – it is our government. In effect, the government is our own corporation – built with the charter of helping us to maintain our liberties, provide for the common good and protecting us from enemies both foreign and domestic. To this end, claiming government as the enemy essentially says that we, ourselves are the enemy – because if government is not going the way we want it, we must change it with our voices, vote and at times, civil disobedience as required.
It is neither unpatriotic or anti-American to take this line of thought. In fact, it’s ultimately American: As we have seen, Corporations really don’t give a damn what flag they fly under. Moreover, corporations will change flags as necessary to continue their growth. Corporations are really a virus on the societal body – they exist by taking from the populace with no requirement to give back – only to preside over their own growth. Much like a cancerous tumor, a renegade Haliburton, for example (hmmm, a bit redundant there, eh?) exists on the fuel of societal blood (tax dollars) with no care for the health of the host (our common good) at all. The ultimate act of patriotism is in fact to work hard to make sure that our government reflects our common wants, desires and provides a balanced opportunity for all people to prosper. It is in this vein that the difference between John McSame and Barack Obama becomes more clear.
I don’t want to hear comments from W2 people saying that corporations and the free market are the right way to go, that the free market is better than the government at stewarding our future – because unless you actually have a corporation and have been behaving correctly as one for quite a while, you really don’t have a valid opinion on their capability as shepherd. Unless you are an active member of the free market, you have no experience of the reality of the responsibility – you only have what you have what you have been told.
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