I’ve come to the conclusion that the Corporate System deserves to be shut down. What is the Corporate System? No, it’s not the same thing as “corporations”. Corporations are just legal entities. In fact, they’re good things. Limited liability in good-faith business failure is, if not quite a right, a privilege of extreme value to society. The Corporate System is the authority structure that grew up within it: the internal credibility markets of businesses, the attempt to create distributed social status through resumes and references, and all the other nonsense designed to scare the hell out of people so they compliantly execute the ideas handed to them from on high. Most people experience it as managerial authority while society, as a whole, gets the butt-end of externalized costs (e.g. pollution). These might not seem connected, but they are intimately linked. Externalized costs are permitted to exist in a world where people are terrified of long-term career ramifications at the hands of vindictive executives.
It’s not business or capitalism that we need to shut down. Far from it. As a syncretist at heart, I don’t believe that we can build a decent society while taking innovations only from Column A (capitalism) or Column B (socialism). We need both. Nor do we need to get rid of corporations as the legal abstraction. Again, limited liability under good-faith business failure is one of the best ideas this society has come up with. Rather, the enemy is the network of extortions, lies maintained due to careerist fear, and social exclusion that enables a small set of well-connected parasites to rob investors and employees both, as well as society at large via externalized costs, at an obscene scale.
At any rate, outlawing capitalistic activity (in addition to being morally wrong) just doesn’t work. The problem with capitalism and communism both is that, when rigidly enforced on people, they tend to generate a shitty version of the other. Corporate capitalism is, for the 99%, the worst of both systems. Look at air travel: capitalistic price volatility, but Soviet-style service. For the well-connected 1%, it’s the best of both systems. What we really need is a hybrid system dedicated toward providing the best of each for everyone, but I’ve gone on for megawords about that.
Still, the Corporate System is an expensive, inefficient, authoritarian, self-contradicting dinosaur. It’s time to kill it. Let me establish why we should tear it down. We ask one simple question: why do we allow private business to exist?
Answers are:
- People have a right to trade services and resources with the market, so long as they aren’t hurting others by doing so. I think this is a pretty straightforward moral claim. If I can do something that confers only benefit to the stakeholders, I shouldn’t have to ask anyone for permission.
- Central authorities can’t reliably outguess markets. Pricing and exchange rates are an NP-complete computational problem in theory and, in practice, even harder because the information informing fair levels is (a) scarce, and (b) constantly changing. Markets aren’t perfect, but they have a much greater information surface area than a central bureaucracy.
- If people are deprived of the right to interact with the market independently, the government owns them. A political authority that outlaws private business is making itself The Boss, and making fair competition impossible. (Competition will exist, but involving personal risk, because it’s illegal.)
Private business has a lot of problems. It generates economic inequality. It tends toward organizational sociopathy (although I believe that problem can be solved, by taking a K-selective approach to process and value reproduction where quality trumps rapid growth). Some regulatory oversight is required. It can’t solve all of our economic problems; we need a socialist infrastructure that protects the unlucky. Yet, for all its flaws, the capitalistic market economy is still a wonderful, necessary thing. (I say this as a 3-sigma leftist, because it’s true.) It funds creation because governments can’t. It’s self-correcting. In many ways, it works– although not perfectly.
The Corporate System, however, is something else. It provides none of the benefits of private business that mandate our acceptance of it. Rather, it’s an attempt to build a corrupt blatnoy bureaucracy within capitalism. It occurs when the entrenched grow tired and no longer want to live in a world where ambitious up-and-comers can compete with them. It’s not entrepreneurial. In fact, it’s the deployment of managerial authority (within a company or, in the VC-istan case, via the reputation economy of the most credible investors) to shut down true innovation.
This is the fundamental reason why Corporate Authority is such a pile of self-contradicting, hypocritical dogshit. Government authority (e.g. to enforce speed limits) is just necessary in small doses. There are problems that require authority to solve it. Knowing the abuses that occur when such authority is unaccountable, we demand the right to fire the elected representatives at the top of that structure. However, capitalism, properly practiced, is not about authority. They don’t belong in the same room together. Rather, we allow capitalism to exist (in spite of its flaws, such as inequality) because we know authority is inadequate to solve all problems, and has no right to go into most spheres of human endeavor. Capitalism, done right, is about the removal of authority.
This is why the interfering, self-serving managerial authority that makes Corporate America such hell deserves to end. Now. It’s bad for us and it’s bad for capitalism. We must make it retreat in disgrace.
