The right consistently defends corporations because corporations provide jobs, boost the economy, and produce products we like at prices we will pay; the left consistently attacks corporations because they don’t “pay their fair share,” they kill small businesses, and they spend too much money on their executives and plush jets.
Both sides are right, and wrong. The right is correct in that corporations create tremendous numbers of jobs, and they produce products we like. But they’re wrong in that corporations don’t provide enough jobs, and they don’t engage in honest competition, which means their prices aren’t the ones we should be paying. The left is also correct: corporations do get special treatment and the playing field isn’t level. But they’re also wrong when they attack corporations as right wing stooges who are abusing the power of the free market.
The truth is that corporations aren’t capitalist actors. They are profit-driven actors. Chiefly, this means that if they can cut great deals with the government in order to lock out their business competitors or direct taxpayer cash into their own pockets, they’ll do it with alacrity.
Corporations don’t provide enough jobs because they are subsidized and therefore uncompetitive. They are protected by tariffs and friendly legislation. They ensure that regulations hurt the little guy more than they themselves are hurt. They work hand-in-glove with government to grab some of the government goodies. Even great American entrepreneurs like Thomas Edison tended toward such corporatism. “A lawyer cannot draw a law covering the complicated conditions of modern industry,” he said midway through his illustrious career, advocating his control of all of American economics. “What is wanted is some person familiar with the selling and buying, the technical as well as the financial end of all industries, to devise some generic scheme that business can work on.” Today, Edison’s intellectual successor, Jeff Immelt, says exactly the same thing – government and corporations must work together.
Here’s the typical history of corporations. They begin as small businesses that use the freedom of the market to produce great products at low prices. Slowly, they consolidate more and more market share. At this point, the government, spurred by press coverage over the “inequitable state” of the industry, intervenes. Generally, their regulation takes the form of support for union goals, since unions can generate votes and monetary support. Suddenly recognizing the power of government, corporations then parlay with the government in order to secure their market share. Large corporations work closely with government to secure subsidies, beneficial legislation, and tariffs that protect their domestic market. Overall, this leads to consumers paying more for products and spending their tax dollars supporting increasingly bloated corporations.
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