Sunday, September 30, 2007

Modern Business

In a response to my Kiva post Democracy Lover said:

I should also point out that corporate capitalism has the same centralization problem.

I happen to agree that we currently have very big problems with monolithic centralized companies in the United States and abroad. When businesses get big enough they start becoming little corrupt governments within themselves. We really need a dialog on dealing with this problem.

Libertarians believe that the free market is capable of solving the problem of big business by itself. The way the market works is that little companies are always nipping at the heels of big business. In a healthy market, you have a continue cycle of small businesses forming and bringing down the big business.

The problem with our modern market is no new businesses are forming. The barriers of entry into the market are too high. Even worse, schemes like Social Security, Employer owned health care, Employer owned pensions, and Socialized medicine have collectivized the pool of capital that would be used to form new companies.

I made an attempt at starting this dialog on the site Crass Commercial dot com. I was unhappy with the site because I realized that I needed to discuss some fundamentals of philosophy and logic before really launching into the dialog.

NOTE: While writing this essay, I realized that the site Crass disappeared; so I have to restore from backup.

The Libertarian view is that you handle the challenge of big business by lowering the barriers to entry and let the small consume the large. The problem, of course, is that the intellectual climate is dominated by Marxist Thought.

The Marxist World View

Marxism is based on a philosophical system called "The Material Dialectics." The Material Dialectics denies the existence of free will. As there is no free will, there is no free market. We are not the product of our choices and beliefs, we are simply the product of our material circumstance.

Marx pulled many of the same tricks as Hegel. As history is not a matter of people making conscious choices (we are, after all, nothing more than evolved biological impulses), there is no free will and no free market. Since people don't have free will, history is not a subject in the humanities. It is a science.

Ooooh, a science.

This actually philosophy is just a big mesh of paradox that received legitimacy by claiming to be science.

The Marxist idea, of course, was that the world was going through a predictable series of thesis anti-thesis conflicts. Predictably, capitalism overturned the feudal world order. In this new corrupt world order, a horrible class called the petty bourgeoisie (the middle class) would rise to ascendancy. The corporations in of the new world order would grow until they were the new oppressive force. Predictably, the intellectuals of the new order would unite the ends against the middle. The intellectual would create an army of activists (brown shirts, economic hitmen) who would radicalize the proletariat and raise the people in a global revolution that would create a new world order.

Marx claimed that, since he was a product of the old world order, he would not be able to visualize the framework of the new world order. He simply gave a recipe for radicalizing people and raising them in revolution. He simply claimed there to be an unidentifiable paradise after the bloodshed. We all get 32 vestal virgins after we blow up the train station.

The ideology was seductive. It gave professors the illusion that they were the catalyst in this great transformation of society.

To hasten the revolution, intellectuals set forth to study all of the means that the market centralizes economic power, and de-emphasized all of the ways that the market decentralized power. An example of this thought process is the ideal of "The Organization Man" put forward a half century ago.

This next statement is strange. My observation is that the market is primarily a manifestation of our own beliefs and values. Being taught a one-sided view of the market that is dominated by forces that centralize the economy, we end up with just such a market.

If, instead, we saw the market as an extraordinarily dynamic multidimensional structure with forces that both centralize and decentralize economic, then we would actually end up with just such a structure.

Classical Liberalism, by the way, has such a view of economics.

Post Modern World

The Post Modern has toned down the excesses of Marxism, but still rejects the multidimensional view of the classical liberal world. Only a few die hards have faith in "The Revolution," unfortunately, the majority of people in academia and business world still hold to the paradoxical views of Marx.

People in business and academia hold to the idea in the modern world is that a business must either dominate or perish.

The modern progressive still hold the idea that the basic structure of economics is that corporations will grow until they become governing forces unto themselves. At this point, a democratic consensus would form among the people disenfranchised by the mega corporations. This democratic consensus would lead to a political demand to socialize the mega-corporations.

The paradox ridden progressive belief holds that the progressives will get to take control of businesses once they grow too large; the result is that progressives have a nasty tendency to support actions that make big business bigger. The unfortunate result of this modern thinking is that the modern liberal seeks to throw up barriers to new corporations, they encourage business people to think in terms of market domination rather than return on investment. This is all based on the naive belief that, by encouraging the centralization of the economy, a political demand will then arise to socialize the economy to counter the inequities of the centralization.

A good example here is Managed Health Care offered by modern thinkers like Hillary Clinton and Mitt Romney. These health care plans demand that everyone buy into the monolithic insurance companies that are dominating our health care system. This system effectively centralizes health care into a cartel owned and controlled by a few mega-billionaires.

Romney, apparently sees this wholesale handing of health care into the hands of a benevolent monopoly as some sort of market device. I suspect that Hillary Clinton sees the handing of health care into the hands of a regulated monopoly as simply a step in the progression towards socialized medicine. The monstrosity that they are proposing will be so corrupt and so overbearing that we will see people rising up against it.

Libertarian Thinking

Unfortunately, modern libertarian thinking is as much a product of the modern as is modern progressivism. The great icon of modern thinking is Ayn Rand. Ayn Rand was raised in Communist Russia and received an education based on dialectical materialism. She realized that she could create a new ideology simply by turing the thesis-antithesis conflicts of Marx on its head. One view of Marxism is that world history was the struggle of the collective against the individual. Rand flipped that thesis around and state that history a is struggle of the individual against the collective.

Her philosophy elevates the CEO into a sort of Nietzschean uber-man.

I don't like the modern libertarian as they keep too much of the dialectical baggage of Marxist thinking. Too often, the modern Libertarian is suckered into arguing on behalf of big business or for excessive pay for CEOs. They often argue that the excesses of this modern corporate capitalism is part of a brave new world order.

IMHO, the radical libertarian really belongs in that tempestuous nest of things called neocon ... people who take the underlying philosophical structure of Hegelian/Marxism and apply it to Conservative ideas.

We really need to have a dialog on the issue of megacorporations, unfortunately, as long as we hold the modern way of thinking, we will find ourselves ripped apart and thrown into feuding camps.

This is why, I really never finished the Crass Commercial site because I realized I needed to talk about some foundational issues before I could even start talking.

1 comment:

Scott Hinrichs said...

Thanks for provoking my thoughts. A lot of what you write strikes home for me. I've got to really think about and chew on it for a while, so I can't provide much meaningful dialogue on the issue.