“President Obama,” writes The Atlantic’s Daniel Indiviglio, “is announcing today that General Electric CEO Jeffrey Immelt will take over as head of [the Economic Recovery Advisory Board].” Reflecting on the “conflict-of-interest” that Immelt’s new role potentially creates, Indiviglio points out that “[c]ritics of the coziness between big business and Washington aren’t likely to be pleased with today’s announcement.”
By now, though, Barack Obama’s fondness for turning high-powered corporate executives into federal government footmen is no secret. From Tim Geithner, to William Daley, to Roger Altman, the President has been very cozy with big business indeed, and not just big business, but the biggest. It is, to be sure, a very confused, twisted political lexicon that would adjudge the President as hostile to business, but that judgment is no more absurd than the myth that to be pro-business is to be pro-free market.
And regardless of the sound bites they direct at the public, politicians and CEOs understand full well that the myth is just that, a handy piece of rhetoric intended to obfuscate what’s really going on. As Immelt himself said in 2009, “It’s never been a free market; it’s never gonna be a free market. That’s just the way it is.” That’s just the way capital wants it too, preferring for the corporate world “to work in concert with” the state to foster a secure and sheltered environment for the economic exploitation of privilege.
So when, earlier this week, the White House issued an executive order instructing a review of regulations that may retard economic growth, you can be sure that the industries benefitting from them aren’t breaking a sweat. Contrary to the howls of what Roderick Long calls “left-conflationists,” regulations serve the interests of the regulated industries; their added costs establish barriers to entry that protect the Big Guys while their minimum requirements eliminate the possibility of substantive differences that are the natural subject of competition between firms.
The whole economic system of violence is founded on the staggering shared experience of this mythos of the state, on an idea that society will fall to pieces but for this thing that is thought to hold it together. And that’s the way we’re conditioned to think of the state, as an independent, external application rather than a pervasive phenomenon intertwined with the rest of society.
This is the mistake that “right-conflationists” make when their arguments tacitly assume that the commercial institutions of today are so readily severable from the patterns of statism. Surveying the corporate landscape, they see the words “for profit” stand in sharp relief against the seeming antithesis provided by the institutions of the formal state, but the de facto perimeters dividing the two are not as easy to draw as the artifice of de jure lines.
Just like the popular identification of “pro-business” with “pro-market,” the words “public” and “private” — at least within the current political colloquy — are thoroughly misleading. When deciding who owns property for the purposes of taxation and other legal implements, the law looks past pro forma indicators and asks who has the “incidents of ownership” — who “holds the strings” and actually controls a piece of property.
Onlookers evaluating the raveled heap of myriad property arrangements within the corporatist system might do well to dispense with the recognized public/private dichotomy and ask who “holds the strings.” Murray Rothbard cogently attended to the ridiculous false premises of the “public sector,” explaining that “[g]overnment ownership means simply that the ruling officialdom owns the property.”
As for the other side of the divide, the “private sector,” Kevin Carson has described the corporate economy as a “self-perpetuating oligarchy in control of a free-floating mass of unowned capital.” Taken together, we have a full and accurate picture of the American economy, a monopoly system with elites (in Rothbard’s word) “reserving” valuable resources to make them more expensive for working people.
In view of the libertarian reverence for the advantages of competition, the bias in favor of the corporate form, one so widespread among them, is particularly odd. If we think that competition between institutions themselves is a desideratum, then why don’t we also think that competition between types of institutions is as well? There’s no good reason to give credence to the idea that companies like General Electric would be fixtures of a freed market. Rather, we have every reason to suspect that they owe their very existence to interventions in the free market that never fail to favor the rich.
Good one, David.
“So when, earlier this week, the White House issued an executive order instructing a review of regulations that may retard economic growth,….”
That bit of info has me suffering a serious flashback to Dan Quayle’s Council on Competitiveness. Square dancing is what the whole thing reminds me of — people whirling, sashaying, changing partners. Either we have what I call “affirmative regulation” — regulatory entities and their staff kowtowing to the whims of the activities under regulation — or we’re clamoring to revise the regulations to increase competitiveness.
If the regulators are owned by the regulated, doesn’t that mean the regulations already are ensuring competitiveness for the regulated?
Well, you can always tweak them to favor one type of business or another, to give the in-power-group’s pals some easing… quantitatively, of course.
Obama’s Administration is even more business-friendly than Bush43′s. Good thing the Democrats are the party of the working folks!
An excellent summation!
I thought the juxtposition of Carson and Rothbard on the theoretical public/private divide was especially illuminating!
As a provocation: would not the peaceful (as opposed to "the whole economic system of violence") competition between types of institutions include between competing institutions or regimes of property?
Is not the propertarian insistence that ('justly acquired') private property can be violently enforced upon people who peacefully adhere to other property institutions simply another instance of the "idea that society will fall to pieces but for this thing that is thought to hold it together"…?
Great article. I'm curious though, and I'm sure you could write another piece about it, but in short what do you think accounts for the mainstream libertarian bias in favor of the corporate form?
I especially like your last paragraph. That in particular is something that the "non-left" libertarians hang on to for dear life: the idea that the corporate form will endure beyond the state, despite the fact that it is entirely predicated on the existence of a state.
then why don’t we also think that competition between types of institutions is as well
This is similar to something I've seen mentioned by Ivan Illich and presumably others. Illich called it a "technical monopoly" – institutions or entire industries that displace alternative institutions and industries. Not because they are intrinsically "better", but because they have the favor of the state. "Privatized" industry like health care displaces mutual aid societies; automobiles with their publicly funded roadways displace bicycles; etc.
I'm warm to the idea that corporations will not outlive the State, but only because capitalism itself is impossible without a State or some other monopoly maintaining property title. Failing to put the power and means of production in the hands of communities, workers' councils, collectives, and other forms of non-capitalist organization simply means that the same bastards would reconstitute their power through widespread thuggery. Capitalist Libertarians only have half the story right when they say they are against government; to be pro-capitalism is to be pro-government one way or another.
I believe that corporate personhood would indeed survive the state. In many ways dealing with the group as a single entity makes things both easier and more functional.
Limited Liability would almost certainly die without the State to enforce it.
Thanks a lot! And I love the "affirmative regulation" phrase!
Thanks a lot and great comment. I absolutely think that a society without the stated would be, as Kevin Carson argued in Studies in Mutualist Political Economy, a "panarchy" of various property regimes.
That's a really, really good question, and I think a lot of the answer flows out of the state-corporate media culture's success in painting their collusive corporatism as a "free market," the idea that what we have in the U.S. is "free market capitalism," which has got to be the ultimate oxymoron.
Todd S., Thanks a lot and you make a really great point about Illich's "technical monopolies," institutions that, as you're arguing, are based entirely on the structural/paradigmatic biases for certain institutional forms. These biases, which are inherent in statism, are definitely stamping out the alternative organizations you list. Again, great point!
RanDomino, You're dead on target with: "Failing to put the power and means of production in the hands of communities, workers' councils, collectives, and other forms of non-capitalist organization simply means that the same bastards would reconstitute their power through widespread thuggery"; and "to be pro-capitalism is to be pro-government one way or another." Great comment!
Gerard Swope Part Deux! and more regulatory capture.
Thumbs up David!
Thanks for the kind words, Keith! I appreciate it!