but if that doesn't work, there's always this and this and this and this ...and so on. That's cute. But Some Might Disagree EDIT: I appreciate the irony of your using the U.S. Census as an example of hostile government overreach. Given that the point of the census is to figure out how to allocate public moneys most equitably and efficiently. And that the government is constitutionally bound to conduct census- that is, beholden to the people. And that incentives and disincentives to behavior are cooked into just about every corporation, public or private. Were you being ironic?Walmart does not profit from Sears either, and how does Walmart destroy Sears? By providing customers with better prices and better service.
Walmart doesn’t bomb its enemies or threaten customers, it lets customers decide which retailer treats them best.
No one argues that corporations can do no wrong. The idea is to compare corporate behavior to that of governments and individuals. Let's make a scorecard for the behaviors you mentioned. Espionage Government spying is performed by groups like the CIA, NSA, KGB, and Mossad. These organizations are famously associated with tactics like torture, disappearances, and assassinations, when they are not sparking revolution and war, thereby killing multitudes of innocent people, always with noble intentions. Corporations perform industrial espionage by snooping around on networks, getting mole employees hired by the competition, copying proprietary information, and "predatory hiring" (beware the evil sign-on bonus!). The intention, for what that's worth, is to make money, a goal shared by basically everyone. Successful industrial espionage hurts the target business and helps the spying business, and may well be beneficial to customers in the end. "According to a 2020 American Economic Review study, East German industrial espionage in West Germany significantly reduced the gap in total factor productivity between the two countries." There's an article on corporate manslaughter saying that laws in some countries hold corporations accountable for accidentally killing someone. The Straight Dope asks "Do Corporations Ever Try to Kill People?" without irony. Individuals are nosy and spread gossip. I need a logarithmic scorecard to keep these values on the same page. Sabotage Suppose you see a headline saying that a factory was destroyed in an explosion, and it wasn't an accident. You might suspect that it was a lone terrorist, or a terrorist group. Or if the factory was in a conflict zone, it's a routine act of war. Would it ever occur to you to imagine that Nike is sending Under Armour a message, or Pfizer is playing hardball with Merck? The cola wars were marketing campaigns. Casualties of obesity are an unintended side effect of giving people sugary drinks that they enjoy, and often continue to consume, even when sugar-free varieties are offered. Even in an egregious case like Philip Morris the corporation does not profit from causing cancer, it's an unintended consequence that kills their customers. Hostile Takeover When a government wants to take over another government, the tanks roll and the bombs drop. "At least 108 million people were killed in wars in the twentieth century. Estimates for the total number killed in wars throughout all of human history range from 150 million to 1 billion." Governments have two main ways of interacting with other governments: threatening war and promoting trade. All of us prefer trade, when corporations are allowed to peacefully exchange goods and services. A corporate hostile takeover "can be accomplished through either a tender offer or a proxy fight." A tender offer is a "bid constituting an offer to purchase some or all of shareholders' shares in a corporation. Tender offers are typically made publicly and invite shareholders to sell their shares for a specified price and within a particular window of time. The price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold." Not exactly Germany invading Poland. A proxy fight is "the action of a group of shareholders joining forces in a bid to gather enough shareholder proxies to win a corporate vote. Sometimes referred to as a 'proxy battle,' this action is mainly used in corporate takeovers, where outside acquirers attempt to convince existing shareholders to vote out some or all of a company’s senior management, to make it easier to seize control over the organization." Top Examples of Hostile Takeovers In September 2009 Kraft Foods Inc. offered $16.3 billion for Cadbury PLC. The Cadbury chairman refused. (The U.K. government stepped in, demanding "respect" for the chocolate maker.) Kraft increased its offer to about $19.6 billion and the two companies finalized the takeover. Cadbury remains the second largest confectionery brand in the world after Mars. In June 2008 InBev offered to buy Anheuser-Busch for $65 a share in a deal that valued its target at $46 billion. Eventually, InBev upped its offer to $52 billion or $70 a share and shareholders accepted. Anheuser-Busch and Budweiser continue to be household names. In August 2010 Sanofi announced a bid to acquire Genzyme for $18.5 billion. The board refused. Sanofi negotiated with shareholders, and in February 2011 Sanofi declared the full acquisition of Genzyme for $20.1 billion. Genzyme had merged with or acquired dozens of other businesses in its history. It now employs 11,000 people in some 65 countries. Monopoly A monopoly on violence is "a core concept of modern public law" and Max Weber's "defining conception of the state." What's bad about a monopoly? It removes freedom of choice; everyone has to use the same provider. You may be satisfied with the DMV, but if you're not, too bad. There is no built-in incentive to improve service or reduce costs. When law protects a monopoly, there is no pressure from small, agile startups moving in when a bureaucracy is slow and inefficient. I can't think of any corporate monopolies that seem harmful on balance. Even De Beers has lost dominance. This could be a success of vigorous antitrust enforcement, but there are natural corrections for monopolistic behavior in the market. Dominant corporations like Standard Oil and Amazon get big and powerful by pleasing customers with low prices (sometimes with ruthless behavior toward the competition). There's always fear that a company like Amazon will grab all the market share by selling cheap diapers and then suddenly pivot, abandoning the business strategy that has made them successful and start jacking up prices to rake in even more profits. If this ever happens it would be the opportunity for startups to jump in and profit by undercutting the big player. Amazon has many advantages in that it can survive price wars (which are great for customers) longer, or buy up competing startups. But unless Amazon can get government protection from competition, it will eventually go broke acquiring a series of copycat startups. Thus Amazon sticks to its proven mission of pleasing customers. If you don't like the dominant business, you can switch to the nearest substitute or do your best to go without what they offer. It's not a perfect solution, but at least you don't have to spend your money to keep the business in operation. If enough customers think and act like you, the business will wither, creating opportunity for a better provider. What do you do when you are dissatisfied with a government service? 1. Go without the service. But you'll still pay for it, so nothing gained. 2. Write a letter to your representative. They will send a form reply. 3. Wait for the next election cycle. 4. Find another politician who promises to do a better job. 5. Vote for them. Your vote has almost no chance of changing the outcome. If the election is that close, it will be reviewed and the candidate with more influence will probably win. 6. Hope that the new representative keeps their promises. Most of the behaviors in these four categories are organized, not individual, so the mystery to me is why corporations would be perceived as more evil than government. Summing up: Espionage: Torture, murder and war versus stealing information to make better products, and stealing employees by giving them a better offer. Sabotage: Literally destroying factories, bridges and hospitals versus destroying the reputation of Brand X. Takeover: Dropping bombs, murdering and terrifying civilians, killing leaders versus winning over reluctant shareholders with an offer too generous to refuse and sending the leader off with a golden parachute. Monopoly: By design, services provided by single providers with compromised incentives and low approval ratings versus Apple, Amazon, Disney, FedEx, Netflix, Nike and Starbucks and engaged in a daily struggle for survival won by those who delight their customers better than the innumerable competitors trying to take their places. You don't have to love corporations; it's certainly not fashionable. But there ought to be some proportion!
The purpose of the article is to ask if our mistrust in corporations is proportional to corporate misbehavior, compared to government or individual behavior. I am suggesting a "follow the money" approach, arguing that if someone offers money to get something done (build a car, drop a bomb) they share responsibility when that thing happens. This is the way the law works; you can't hire a hitman and then say you are innocent because you didn't pull the trigger. You mention corporate espionage, corporate sabotage, and hostile takeovers. Who is the victim of these practices? Most directly, other corporations. If you are hostile toward corporations, you might welcome these practices. I don't worry about them very much. Walmart destroyed Sears (let's say), now they see Amazon as a threat. If Walmart steals secrets about how Amazon pleases customers, perhaps with technology enabling one-click purchases, then Walmart can improve customer service by adopting those practices. Let Amazon take them to court, why should customers care? You mention monopoly. Do you feel threatened by monopoly? Most of my spending goes to corporations, and I have a dizzying number of choices; I get lost trying to make a decision of where to shop. Price wars, hostile takeovers, cutthroat business practices, it sounds like hell in the board room. But from the customer perspective, I see cheap diapers. The East India Company may be a fair example of commercial abuse of power in the 1800's, but it basically was the government in India, exercised military power, and does not reflect business practices today. Can you really compare them to Google or Facebook, who make money by advertising? I would ask if a private agency like Pinkerton is better or worse in terms of strikebreaking than similar behavior by police and military forces. Who are the customers of Blackwater and Northrup Grumman? Ultimately, taxpayers provide the money, but not by choice. If you don't love the work they do, your quarrel is with the organizations paying them to do it. Corporations are reviled for collecting data about customers. How do they get the data? By watching how people use their services, and sometimes asking questions. Sometimes they provide compensation for data, a "token of appreciation" for taking a survey, or providing me with free links to information on any subject I ask for. (One of your links is to a Google search -- if you don't trust corporations, why do you use one to find links? If you can't live without finding links, why not at least use one of the smaller search engines instead of the world's largest?) If I lie to a corporation about my personal information, nothing happens. If I lie on the census, the penalty is $500. The census has a noble intent, but if I happen to believe public money won't in fact be more equitably and efficiently allocated based on my postcard, why must I be threatened to fill it out?
Working backwards: If you lie to a corporation about your personal information, that might be called "insurance fraud," for which there are absolutely ramifications. Much like an insurance company, the government compels us to pay a certain amount in to promote good behavior and indemnify against the societal risks of bad behavior. That's called social contract. "But what if I don't want to" has never been a compelling argument to me, which is one of the reasons I've never found libertarianism convincing. If you don't want to follow the social contract, then the social contract breaks down. When the social contract breaks down, and corporations (as well as individuals) are allowed to act in their own unfettered self interest, then you get the East India Company. That's the point. If you remove government oversight, you don't get better business. You get government by another name.. The difference between modern liberal democratic government and corporate government is that one is ostensibly using monopoly on power to enforce social boundaries and thereby uphold social order and manage use of national resources; the other uses that monopoly on power to maintain profit at all cost, no matter how brutal. I know which rubric of public management I'd be willing to trust more if I "followed the money". Speaking of monopolies. You opened a previous portion of the discussion describing how Walmart might increase market share simply by improving their overall customer experience. The implication, I presume, was to illustrate how beautifully the market self-regulates through positive interactions to make both sides prosper. But it ignored malfeasance, because malfeasance illustrates how in the absence of regulation, the market cares only about profit by all available means. The means I supplied are absolutely tactics pursued by corporations to consolidate market share and increase profits without having to consider the quality of their product or user satisfaction. And the absence of end user harm cannot be conflated with the presence of end user benefit, especially if we recalibrate our idea of who the end user is. While I, some random Joe on the street might not care about corporate espionage so long as my computer still runs, if I was, say, the inventor of a certain kind of computer chip and I appreciated the revenue that my intellectual property generated, I might be kind of sore if somebody stole that intellectual property, and might appreciate the regulations that curb such bad behavior. As for monopolies, they decidedly don't result in cheaper diapers. All this is to say, I really truly don't understand this dogmatic trust in corporation over governance. There's too much evidence being swept under the rug indicating how corporations would act in absence of regulation. In my eyes, mistrust is maybe the strongest regulatory weapon we as individuals have at our disposal. That goes for both government and the market. Why do we have to couch it as a binary choice between one or the other? As for the opinion piece that we're discussing: Pish posh. The purpose of that piece is to present the author's opinion as common sense using a sort of gee-whiz, down-home-country-lawyer reliance on The People's love of a good, simple narrative. It opens: And then expels paragraphs of hand-wavy opinion such as without ever relying on so much as personal anecdote. Even the portion on history doesn't refer to any particular historical example. The author practically begs his audience not to consider concrete examples or counterpoints lest it deflate the argument. Never mind the fact that in the introduction, the author questions the sense of mistrusting the corporation over personal acquaintances, asserts that out of the three provided groups, the corporation is by far the most trustworthy, and then never addresses the enormity of that claim. I should trust the corporation more than my wife? My friends? My mother? It's an absurdity so enormous that the author seems to rely on us just kind of... accepting it? And here's what I really don't understand. You're obviously very intelligent. And you're obviously well-attuned to historical precedent, and not afraid to buttress your opinions with examples. If I asked you not to consider history or legal precedent, you'd wonder why I'd redirected your attention. Moreover, you strike me as somebody who tailors his argument to the audience- the right tool for the right job to maximize efficiency. This opinion piece you posted- it bothers me because it asks its audience not to consider things too carefully. It requires tremendous faith not only in corporations, but in the authority of an entire stranger (not at all one of the "people I know in my personal life") without that stranger's ever having to demonstrate that authority. To whit, it's written for an audience of stupid people. And you chose this article over others to present to this audience on this site. Then again, it generated discussion, so who am I to finger wag.If I lie to a corporation about my personal information, nothing happens. If I lie on the census, the penalty is $500. The census has a noble intent, but if I happen to believe public money won't in fact be more equitably and efficiently allocated based on my postcard, why must I be threatened to fill it out?
The East India Company may be a fair example of commercial abuse of power in the 1800's, but it basically was the government in India
The purpose of the article is to ask if our mistrust in corporations is proportional to corporate misbehavior, compared to government or individual behavior.
I would initially expect most people’s attitudes to be pretty closely tied to their personal experience, more so than their book learning or what they hear on the internet.
I would not, and neither would most people. Maybe a few very unusual people would. But we can hardly be resentful and distrustful of someone for just behaving the way the vast majority of normal people would behave.
This is only true if I am a customer of the insurance company, which implies that I have agreed in advance to their terms of service. I would expect consequences if I try to cheat the insurance company, and would hold them responsible if they try to cheat me. EDIT: I can also file a fraudulent claim against another person's policy. That is an example of bad behavior by an individual. How does the corporation respond? Hopefully, the insurance company protects its customers by denying the claim. But sniffing out fraud costs money, so they will sometimes pay out when they shouldn't. A competitive insurance company will seek an optimal level of fraud detection to keep customer premiums as low as possible. The government also has a role, to punish people who commit insurance fraud. An industry source suggests that enforcement is minimal, so "Fraud comprises about 10 percent of property-casualty insurance losses and loss adjustment expenses each year." No insurance company compels me to pay anything. I am only obligated to pay for insurance that I agree to purchase. I can cancel my policy and stop paying any time I like. It's the government that operates on the basis of compulsion. As Huemer says, "I understand the arguments that this institution is necessary." But I think the concept bears some scrutiny. My idea of a contract is an agreement made between two parties, in which each side promises to fulfill some obligations. It should be written down somewhere, so everyone understands what the terms are. And most importantly, the parties should consciously agree to the contract. None of this is true of the social contract. We should call it the social tradition. Huemer makes the case succinctly in a précis of his book: Sam has a problem. "But what if I don't want to tell a stranger about my salary and ethnicity and who I live with?" "But what if I don't want to sell the house I grew up in to make room for a bypass?" "But what if I don't want to risk my life shooting at foreigners in a war I believe is unjust?" "But what if I don't want to arrest a fugitive slave so they will be returned to the South?" Surely you support occasional resistance to legal authority. The state is not infallible. The question of political authority is probably a book-length subject. I try to argue that there are cases where the market could provide better outcomes than we now get from government, though neither is perfect. It's true that the market underproduces public goods, since it is hard to profit from them, but providing public goods is a small fraction of what government does. A market requires two sides, buyer and seller. The seller cares only about profit. But the buyer doesn't care about the seller's profit at all, and tends to push in the direction of less profit and less malfeasance, against the buyer at least. Do you feel Walmart depends significantly on malfeasance for their profits? The complaints I see most are that they drive a hard bargain with their workers and suppliers. This is entirely due to their business strategy of providing the lowest possible prices to customers, who benefit. You mentioned intellectual property protection, that's a hard one to get right, and even if the IP laws are optimal it's difficult to enforce them. bfv noted the shift toward open source software, perhaps in response to the fact that it's hard to sell code so tech companies are shifting toward selling services. Can you cite an example of a harmful monopoly from this century? The first article I found complains that "three companies control about 80% of mobile telecoms." Did Forbes forget what "mono-" means?If you lie to a corporation about your personal information, that might be called "insurance fraud," for which there are absolutely ramifications.
Much like an insurance company, the government compels us to pay a certain amount
That's called social contract.
"But what if I don't want to" has never been a compelling argument to me
You opened a previous portion of the discussion describing how Walmart might increase market share simply by improving their overall customer experience. The implication, I presume, was to illustrate how beautifully the market self-regulates through positive interactions to make both sides prosper. But it ignored malfeasance, because malfeasance illustrates how in the absence of regulation, the market cares only about profit by all available means.
As for monopolies, they decidedly don't result in cheaper diapers.
When governments misbehave, they do stuff like murdering hundreds of thousands of civilians.... And I don’t mean in some indirect or speculative way — I mean literally sending employees with guns to go shoot people.... If there were a corporation that did shit like that, people on all sides of the political spectrum would condemn it as the most evil corporation ever.
My reply will be probably mostly predictable, so I might save it for later. In response to your kind last words, I will certainly agree that this is a silly article, and I shared it expecting that the provocative title and snarky tone would resonate here. There's a principle of charity that says we should try to overlook small defects in the opponent's argument, and digest and respond to the strongest idealized version of the argument we can imagine. I'm not very good at following the principle, though. Someone once asked a great question of which posts we most wished got more traction, and I had many to choose from. Some are long and some are stuffy, some are both. Huemer is unorthodox, but a serious thinker. Take a look at yesterday's Risk Refutes Absolutism where he characterizes Ayn Rand as a crazy libertarian, and tries to find a sort of Bayesian middle way between moral absolutes. I think his approach to morality, Ethical Intuitionism, has some appeal. I suppose he is letting off steam on his blog, or just having fun outside of the classroom and academic publishing circuit. That's what I am here for; I enjoy sharing the ideas and exploring the different ways people think. Thanks for taking part in the conversation.