It Isn’t “Vulgar” to be Anti-Corporate

Strike the Root has published an article titled Vulgar Anti-Corporatism. As readers of Kevin Carson’s excellent Mutualist Blog would immediately suspect from the title, the idea is a riff on Carson’s “vulgar libertarian watch” concept. However, Hogeye Bill’s article wasn’t at all persuasive to me.

Before I get into my objections, here’s an excerpt from Vulgar Anti-Corporatism:

I'd like to introduce a similar term--one that describes a similar fallacy of equivocation. I've noticed that many, perhaps even most, anti-capitalist types seem unable to tell the difference between market corporations/firms and political corporations/firms. (I'll use "corporations" from here on, with the understanding that the points apply to firms in general, regardless of particular ownership arrangements.)

Let "vulgar anti-corporatism" refer to the error of lumping all corporations into the political corporatist pot--in other words, assuming that all corporations receive significant benefit from collusion with state. In fact, most corporations do not enjoy significant special favors, suffer net harm from the state, and are put at a disadvantage compared to competitors receiving state privilege. One would think it obvious an Apple is not a Halliburton, a Wal-Mart is not a Bechtel, and that Ben & Jerry's is not Blackwater. Yet a surprising amount of literature, and an amazing number of people fail to make the distinction. Typically among anti-capitalists, all corporations are painted as in cahoots with the state, and benefiting from the state.

As far as the examples go, the author does have a good point. But is that all there is to a corporation benefitting from the state? I don’t think so. Back to the article for just one more snippet—all emphasis mine:

Of course the line between political and market corporations is fuzzy. While we can tally up government contracts, it can be difficult to gauge indirect state-generated benefits such as de facto transportation subsidies resulting from wars for oil. It is also true that many corporations get some benefits from the state - but generally not a net benefit. ....

Are you a vulgar anti-corporatist? Here's an acid test: Do you think Wal-Mart is a "bad" corporation like Northrop Grumman or KBR? If so, you are probably a vulgar anti-corporatist. You might criticize Wal-Mart for some of its policies. You may like to see it unionized, or use better environmental practices, or stop underselling small local firms. But to put Wal-Mart is the same class as Halliburton is a gross mistake. By our three criteria, Wal-Mart is clearly a market enterprise. (1) It receives little or no income from government contracts--it receives only incidental government benefits, mainly the usual local tax abatement or TIF subsidies that all businesses attempt to win. (2) Retailing consumer goods would exist without the state, and (3) people voluntarily buy stuff from Wal-Mart at their "always low prices."

Bill’s definition of benefitting from the state seems overly narrow—almost absurdly narrow. And his “acid test” question is ridiculous: of course WalMart is not in the same league of evil as KBR. That said, WalMart has benefitted from the state by using eminent domain and zoning shenanigans to secure desirable properties for its stores; and it undoubtedly will continue to make use of those tools as long as those responsible for such decisions view them as beneficial.

All that aside, corporations as currently configured benefit from the state because they are a legal fiction created by the state. As I understand it, as such corporations are offered protections that are not extended to individuals, even though the individual is the underlying unit of market transactions. Thus, there really is no distinction between political and market corporations, because every corporation is a political entity obtaining special favors from the state.

The largest benefit corporations enjoy from the state’s recognition is legitimacy. And that has become an enormous net benefit. In the current consumer mindset in the USSA and much of Europe, corporations have become trusted. They’re trusted to provide quality goods or services—that’s part of the licensing schtick—not to mention the regulations they are then supposed to obey. Buying from an individual has become a suspect thing— remember that idiotically-titled bathtub cheese article commented upon here last year? Real free-market sellers not only have the fear of discovery hanging over their heads, they battle the public perception that because they haven’t gotten the state’s blessing—through licenses and fees that are just so much guild protectionism—their products are somehow bad. Or they’re trying to scam customers. No, corporations never scam their customers by shrinking the product while keeping the price the same, or using buzzwords or marketing phrases in highly suspicious ways, or hiding potential problems from customers, or who knows how many other ways.

Hogeye Bill wants to make a distinction between “market corporations” and “political corporations”. The problem is, as long as the state is around and granting favors to certain, select groups of individuals who come together to make and sell some product or service, there isn’t a line—fuzzy or otherwise—separating those two concepts. I am not objecting to individuals working together to create goods or services to sell, of course; what I am objecting to is the idea that allowing the state to skim some money off the operation in return for privilege and protection is an acceptable way to operate in a free market.

It is telling—and very sad—that the real free market is generally referred to by a scary moniker: the black market. I would rather take my chances with the individuals who deal there than with fascist corporatocracy that has emerged from the concept of “corporation” in this country. Next time you see a person selling produce or something else from a van or pickup truck strategically parked at an intersection, make note of your first response. Do you view it as an opportunity to do some direct trading with a free-marketeer?; or do you wonder why he isn’t selling from a storefront like he “should”? If it’s something like the latter, perhaps it’s time for you to consider taking another red pill.