Why is there so much suspicion of big business?

Perhaps in part because we cannot do without business, so many people hate or resent business, and they love to criticize it, mock it, and lower its status. Business just bugs them. After I explained the premise of this book to one of my colleagues, Bryan Caplan, he shrieked to me: “But, but . . . how can people be ungrateful toward corporations? Corporations give us everything! Corporations do everything for us!” Of course, he was joking, as he understood full well that people are often pretty critical of corporations. And they are critical precisely because corporations do so much for us. And do so much to us.

Does my colleague’s outburst remind you of anything? Well, immediately he followed up with this: “Hating corporations is like hating your parents.”

And:

There is another reason it doesn’t quite work to think of businesses as our friends. Friendship is based in part on an intrinsic loyalty that transcends the benefit received in any particular time and place. Many friendships also rely on an ongoing exchange of reciprocal benefits, yet without direct consideration each and every time of exactly how much reciprocity is needed. In addition to the self-interested joys of friendly togetherness, friendship is about commonality of vision, a wish to see your own values reflected in another, a sense of potential shared sacrifice, and a (partial) willingness to put the interest of the other person ahead of your own, without always doing a calculation about what you will get back.

A corporation just doesn’t fit this mold in the same way. A business may wish to appear to be an embodiment of friendly reciprocity, but it is more like an amoral embodiment of principles that usually but not always work out for the common good. The senior management of the corporation has a legally binding responsibility to maximize shareholder profits, at least subject to the constraints of the law and perhaps other constraints embodied in the company’s charter or by-laws. The exact nature of this fiduciary responsibility will vary, but it never says the company ought to be the consumer’s friend, at least not above and beyond when such friendship may prove instrumentally valuable to the ends of the company, including profit.

In this setting, companies will almost always disappoint us if we judge them by the standards of friendship, as the companies themselves are trying to trick us into doing. Companies can never quite meet the standards of friendship. They’re not even close acquaintances. At best they are a bit like wolves in sheep’s clothing, but these wolves bring your food rather than eat you.

Those are both excerpts from my final chapter “If business is so good, why is it so disliked?”, from my book Big Business: A Love Letter to an American Anti-Hero.

Comments

A: by virtue of being big, "big business" is able to rent seek, push around the little guy, exploit its size advantage to attract business despite having an inferior product ("nobody ever got fired for buying "), etc.

Killer point! Better to have an economy of small-medium sized firms-that way we can have a median income approaching 15k a year and we can shift our ppf curve left......

Or even better have a nation state with super strong industrial policy and corporate regulation so we can be a low growth european nation state with a median income approaching 28k a year.

The worst possible thing would to be like the US economy with 325 million people and a median income over 50k a year....

I’m just saying.....

Because so much misinformation is put out there by socialists.

Wrong. The media is owned by crony capitalists like Murdoch and they put out fake news by the boat load.

Yes muckraking can be frustrating and socialists appetite for perpetual political warfare is endless. However, most socialists are true believers and the beauty of their ideology is that they make us poorer in the long run.

In fact the most honest socialists I’ve ever meet have argued equality over economic growth.

You don’t even need right wing oligarchic brainwashing to think like that.

Way to argue against a point I wasn't making. Instead, I was answering the question: "If business is so good, why is it so disliked?"

Those are some reasons people dislike "big business".

All good points. Immortal, asocial, amoral billionaires prohibited by law from engaging in basic human decencies (eg putting you out if you’re on fire) if they don’t somehow contribute to increasing shareholder value... gosh, can’t imagine why people distrust them.

I mean, my odds of dying in childbirth or being bankrupted by an illness, not to mention my expected lifespan, would all be better in one of those 'low growth european nations', and those all matter a lot more to me than some abstract economic indicator, so yeah, I would rather we were more like them.

Minor pedantic note: "corporation" is not a synonym for business. Non-profits are also typically incorporated (and it's really they who invented the corporate form). Even governments typically act as corporations, and have done so for about as long as Weber's bureaucratic state has displaced the charismatic warlord.

I agree with your point, but do not think it is a "Minor pedantic note". Socialist-types are dedicated to using the inaccurate term "corporation" because it sounds menacing.

Rational participants such as Tyler, should not accept that biased started point.

Funny that you correct a generalisation only to bring in your own. Not all people who use the term "corporation" are "socialist-types" as evidenced by Tyler.

Non-profits are far more corrupt than business entities.

that is a useless statement. Some certainly are far more corrupt than some for-profit corps. Some for-profit corps more corrupt that some non-profit.

At the end of the day it's not the corporation but the people running and controlling the entity. It's also the culture they create among the staff working there--though here the staff also own some responsibility.

Like the old saying goes, all corruption needs to succeed is good people to do nothing.

Agreed -- and the point about government generally being one of the first forms I think worth keeping in mind.

Seems to me size is only a proxy for the issue of why many dislike corporations. The key problem is that of accountability. Corporations don't really do anything. They are a tool to allow specific people to take various types of actions. The problem is that along with the fiction of personhood for contracting purposed comes the shield against accountability for the actual person/persons making decisions or taking actions.

The fiction creates additional problems within the legal treatment of principle-agent relationship as well.

In short, the problem is not corporation but what our corporate law as turned into.

Uber, a American-Saudi funded company, buys Careem, another Saudi funded company for billions of dollars. Do ordinary Americans benefit from this or does most of the money go to a few connected Silicon Valley, Wall Street, and Saudi global elites?

Well one response is that if it doesn't hurt them, why should they be concerned? No one should be selfish enough to say that transactions which don't benefit them should be banned, surely?

On the more specific level, it appears Uber has been cash negative for all of its life. So the Saudis have been providing a subsidy to Uber users, which is nice. Longer term they hope to profit, but can only do so if their service is better than the alternatives, which again is good for consumers.

'So the Saudis have been providing a subsidy to Uber users, which is nice.'

While further ensuring that those that supply internal combustion motors fuel continue to reap a nice profit, while delaying any transition away from burning what make the Saudis so wealthy.

Almost as if the Saudis just might have their own interests, having nothing to do with providing a subsidy to Uber users.

The sizable majority of Uber's rides are in North America, where less than 6% of the oil comes from Saudi Arabia. The average Uber ride is 5 miles, and the average Uber car gets 25 MPG. The component cost of gasoline is about $1 for crude oil.

Therefore the Saudis expect to make $0.012 per Uber ride. Uber's corporate loss margin is $0.25 per ride. This would be dumbest possible way for the Saudis to line their pockets. They're losing 95% of their subsidy in the process.

'The sizable majority of Uber's rides are in North America, where less than 6% of the oil comes from Saudi Arabia.'

You are seemingly confusing a global market in petroleum with one part of it. Whether the Saudis sell 0% or 100% of their crude exports to the U.S. is meaningless. Making sure that IC motors remain critical for personal transportation is a long term strategy for any crude producer, regardless of the particular export market share in any single country.

'and the average Uber car gets 25 MPG'

That is a joke, right? Only 25 MPG or 9.41 liter / 100km? A typical Mercedes E 200, a commoin taxi model in Germany, get 5.9 liter / 100 km

'Therefore the Saudis expect to make $0.012 per Uber ride.'

No, they expect people to continue using IC motor powered transportation for as long as possible.

'They're losing 95% of their subsidy in the process.'

Not even close - unless Uber plans to start requiring its drivers to exclusively use non-IC powered cars. The Saudis are interested in preventing this sort of switch - 'Around three-quarters of US coal production is now more expensive than solar and wind energy in providing electricity to American households, according to a new study.
----------------
The study’s authors used public financial filings and data from the Energy Information Agency (EIA) to work out the cost of energy from coal plants compared with wind and solar options within a 35-mile radius. They found that 211 gigawatts of current US coal capacity, 74% of the coal fleet, is providing electricity that’s more expensive than wind or solar.' https://www.theguardian.com/environment/2019/mar/25/coal-more-expensive-wind-solar-us-energy-study

It doesn't hurt them, but it kinda does concern them. Uber has destroyed the classic style taxi service and is now one of the main logistical services in many cities. The whole swaths of people are depending on it (and it's price policies) either as their source of income or their source of expenditure.

Yeah, in case of cash negativity of Uber, there is more questions. But the murkiness of the water does not make it more trustworthy for an average person.

Since government and business are bedfellows, business has an outsize influence on our day-to-day life. That will be become more and more apparent as the pipedream of autonomous vehicles continues to expand.

Is it not good that a terrible structure has been removed? The classic taxi service was an awful, awful system, corrupt to the bone. Uber is not, uber can be empowering, granted we see the taxi system rejecting and working to get its cut of uber, but for now Uber and Lyft are helping the masses.

In what cities has Uber destroyed traditional taxis?

A bird might benefit from being around a herd of elephants, but the bird knows not to be where an elephant plans to step, because it will be casually crushed. The elephant can only navigate its environment at elephant scale; smaller things do not register.

So... do birds like elephants? Kinda. Do they fear elephants? Kinda. Do they resent elephants? If they were capable of resentment, they probably would. They are invisible in an elephant-scale world.

You're basically quoting Pierre Elliot Trudeau, although you don't realize it.

Sam often watched over the pot and at her skinny wrists, at her fox-colored eyebrows and eyes that held a fountain of glare—the tepid blinks after an hour passed as if she just sat in a chair.

Could it not also be because there’s so much good business in being suspicious about big business?

Have you ever called customer service for your 4G wireless service, your cable company, or your bank? Healthcare prices too are a game of surprise. Big companies take your money while delivering shoddy work because they can and they are not afraid to show it. I don't ideologically have a problem against big business but its clear that they need to be broken up and regulated.

"its clear that they need to be broken up and regulated"

How is that clear? Has there ever been an instance of a non-government-regulated monopoly being broken up and resulting in an improvement for consumers?

How about the railroads and standard oil?

And don't you think if Obama had broken up the big financial giants we would all be better off now? Of course, he failed. Actually, didn't even try.

Have you ever called customer service in a government bureaucracy? Big governments take your money by force while delivering shoddy work because they can and they are not afraid to show it. It's clear that big governments need to be broken up and de-regulated.

+1

Errrrr... you do realize governments turn your money into streets, water supply, electricity, theaters, health care, public transport, housing, parks, hospitals, police, firefighters, and all the things that make your life possible?

Corporations mainly turn your money into sports cars, chalets and flat screen tvs for people other than you.

Big difference free market radicals tend to ignore.

Many of those things are not primarily provided by government (e.g., housing, health care, hospitals, electricity generation, etc.), and given the incompetence of governments, more of them should be privatized and de-regulated.

Anon7, I used to think like you. Then I got a job in the real world and grew up.

Only in your imaginary world do government bureaucrats have a good track record of breaking up big business that ends up better for consumers. Many in fact are already heavily regulated. So what went wrong? And don't say that the greedy corporations captured their regulators unless you have a better alternative than merely positing that more regulations imposed by the "right" people will magically work this time around.

In your imaginary world, corporations can do no wrong. In the real world, average Americans foot the bill for failed banks and wars started by oil and defense companies (Bush & Cheney). Try living in this world. The real one.

"wars started by oil and defense companies (Bush & Cheney)."

This comment is delusional. Bush & Cheney were government officials. The US government started the wars.

"In your imaginary world, corporations can do no wrong."

There seems to be more evidence that in your world government can do no wrong. Trying to blame the Iraq War on corporations is a ridiculous stretch.

Both corporations and governments do both good and harm, however, government is the one with the highest potential for harm.

How easily one forgets the Coca-Cola Holocaust of 1973 and the Proctor and Gamble Japanese internment camps.

Dutch East India company started many wars. The British fought a war in China so their opium sellers could keep the profits going. Read up on Smedley Butler. Its not exactly a dirty little secret that people start wars for economic reasons.

Good thing “people start wars for economic reasons” isn’t the issue at hand then. Reaching back to the Dutch East India company is both hilarious and idiotic.

You’ll have a much better argument if and when Samsung nukes Japan.

Straw man. Whoever said that corporations can do no wrong? The question is which may and does more wrong. And how does pointing out the supposed failures of big government prove that big business is worse than big government?

Typical racist reactionary response disguised as faux libertarianism. In a real democracy, aka after the destruction of the senate, gerrymandering, voter ID rules, the outlawing of Faux News, eliminating citizenship laws, etc, we can freely vote for governance.

No one ever gave me the right to vote for Wal-Mart’s board of directors. That’s called facism.

Private enterprises are facism. Everyone should get to vote on every corporate board.

I can agree to that. One funny thing about the “big”s comparison, corporations vs. government, is that inefficiency is actually a good thing when you expect to be exploited.

Corporations were seen as beneficent for what turns out to be a short period. Think Merck, up until the maximizing-shareholder-value mania caught up with it in the 90s. Though Merck caused plenty of ulcers among managers before then (think, my father-in-law). Once business schools (think Harvard) taught budding CEOs their product was maximized profits, not what their company made, we were on the path to today.

Fear of big business partly comes from the way that they centralize their decision making. You can loose your job due to some decision made thousands of miles away with no regard for your particular circumstances, and more crucially, no way for you to provide any emotional input into the decision. They cannot see your tears. I think we know that some of how small groups of people work together is via empathy, which activates morality modules in our brain. Like the Hansonian, near vs far morality, if you are far from the decision makers you cannot influence them so easily.

This is it basically. I as going to post that Corporations ultimately have to make decisions and that makes them an easy symbol for people who don't like those decisions--whatever those may be.

They can make tough decisions and not be sociopaths about it. Any parent or athletics coach knows how to do this. Heck small business owners know too. Big corporations completely take advantage of their position in society and immense bargaining power to do as they well please, consequences be damned.

That's the thing: tough decisions look sociopathic to someone. I also wouldn't be so confident that athletic coaches or small businesses aren't sociopathic at times.

But big corporations are just that, everyone knows one. Hence, it's far easier (and less ultimately limiting) to rally against a big corporation to air grievances.

Admittedly, the size of the big corporation also gives them more impact when those decisions create losers of some form or another.

If small businesses and coaches are sociopathic, the consequences are limited. When big corporations are sociopathic, their blast radius is huge, especially when they start buying legal favors from friendly politicians. Libertarians should be for more decentralized power and more individual rights.

It makes a great deal of sense to think of large corporations as rational sociopaths, whether you are a customer or regulator.

Or if you are Adam Smith, for that matter.

Can they? The big corporations got big in the first place by taking advantage of their positions (not a moral judgement). Competition demands...or your name is Mom and/or Pop

Many years ago, while in school, I postulated the idea that regulations like the UCC could support the expansion of large corporations nationally. The basic argument was that defining certain standards nationally removed a number of location factors such corporation needed to worry about. That resulted in the ability to place management in the distant offices that simply followed the higher level rule sets and did not need too much local knowledge. That reduced both the need to pay the local managed as much and allowed more centralized decision-making by the corp HQ.

I never tested the thought -- or pursued it further -- but it does seem to fit the general picture of federal regulations tending to enable large corporate grown within the larger national economy and markets.

Not sure it fits the regulatory capture view, more of an unintended consequence probably.

Why use the word "corporation"? My guess is because it sounds more sinister than "company".

But a corporation is really just something that is incorporated and can act as a unit. I believe that non-profits are corporations.

I do not think that rational participants in this discussion should use the biased and negative terminology of one (slightly rabid) side.

Organizations incorporate so as to be able to survive their founders and other owners. They are perpetual minors, able to act only through their guardians, typically Boards of Directors.

'Why is there so much suspicion of big business?'

But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Business.

'Bryan Caplan ... shrieked .... my colleague’s outburst'

Of course, no one no knows if you are joking about a shrieking colleague. And the idea that corporations are like parents is surreal (more like dada, one could almost say), but apparently Bryan Caplan has won the victory over himself.

'about commonality of vision, a wish to see your own values reflected in another, a sense of potential shared sacrifice'

No - though in German, that perspective is summed up with the word Parteifreund, as applied to the members of the political party you belong to. These are people you have to agree with, or lose the 'friendship' found in being part of the same party.

Which leads one to believe that for some, friendship only becomes possible when one shares a stubborn attachment to B-B.

'The senior management of the corporation has a legally binding responsibility to maximize shareholder profits'

Depends on the state where an American company is incorporated, not to mention the country. That amoral attitude is explicitly forbidden in Germany due to the Grundgesetz, article 14 - You can see this in article 14 of the Grundgesetz - 'Eigentum verpflichtet. Sein Gebrauch soll zugleich dem Wohle der Allgemeinheit dienen.' which an be translated as 'Property/ownership entails responsibility/obligations. It should simultaneously/equally serve/benefit the commonweal.'

'but these wolves bring your food rather than eat you'

A slightly more self-aware author just might wonder where the food comes from, and why the wolves are serving us. But that author would likely never win won the victory over himself.

Good comments. I came here to point out that even in business school these days we learn that maximization of shareholder profit is not the fiduciary duty of directors, as the Revlon Rule is narrowly applied to transactions.

Tyler has never worked in the private sector, much less for big business. He's merely and interlocutor out of his depth on this one. I look forward to his other books, since this one will no doubt be his least successful.

Perhaps people have a vague understanding of which types of businesses have market power. Everyone hates Comcast, few people hate a local mom-and-pop store.

What's a local mom and pop store? We only have Dollar Trees and Walmarts in my area.

That's OK - market concentration likely remained the same.

It's not size. People can detect when something is a scam or not. Chick-Fil-A is wildly popular in spite of being in fast food a Christian (two things that often drive people up the wall). Comcast is not popular despite bringing people entertainment and internet which they love. The difference is its obvious that Chick-Fil-A is subject to meaningful competition and delivers a quality product that is as good as it can be, while Comcast doesn't compete and delivers a shoddy minimum quality product that it can get away with.

+1, Comcast lives in a quasi-monopolistic world. And it's customer service and quality is what you would expect.

to add there. The other thing the gets my goat with the ISPs is their pricing model. The whole approach is screw your loyal customer. The discounts go to those who keep switching (or keep complaining as the rates go up that that is not as beneficial) when there is an alternative.

Good example.Market power isn't quite the same thing as size. Chick-Fil-A has plenty of local competition, Comcast doesn't. I was speculating that what people really hate is firms that have market power not firms that are large.

+1
a lotta people underrate chickfilas service
which is probably the best/most consistent
in the fast food field

It is always easier to hate people after dehumanizing them. Big business is already an unhuman entity and, thus, is easy to hate. When we hate a business, we don't think that we are hating the humans running the business. When we try to take a business's money --- say by taxing it or cheating it in someway --- we don't think of it as taking the money that shareholders and employees were saving for their childrens' college. To be fair, those working on behalf of a business are also able to disassociate their individual indentities from that of the firm, perhaps allowing themselves to feel less accountable for their actions. Corporate entities allow humans to organize to accomplish useful things, but they also serve as convenient intervening targets for any humans involved (shareholders, managers, employees, and customers) to direct animus without feeling like one is attacking the humans on the other side of the corporate shield.

When we hate a business, we don't think that we are hating the humans running the business.

Not sure who "we" might be but this statement doesn't seem to apply to Charles G. and David H. Koch.

We could have whole protected classes of hated business CEOs. The Ayn Rand industrialists, the Big Tech controllers, the Wall Street snakes, the Big Oil polluters, next up the Pharma Drug enablers.

"Perhaps in part because we cannot do without business, so many people hate or resent business..." is a staggeringly shallow (and completely unsupported) bit of critical thinking. Substitute "food" or "air" or "companionship" or "sleep" or "transportation" or "safety" or "shelter" for "business" and one sees how glib and, well, stupid, this framing is.

Never came across the phrase "Too Big to Fail," I guess.

Too big to fail of course isn't a failure of capitalism, it is a failure of Government.

'it is a failure of Government'

Obviously - companies should never get so large that their failure threaten society's functioning. Such as the way that a collapse of the banking system would.

Well, in the past that is - there is a reason why the FDIC was created back in the 30s, based on actual events, not theory. The failure was not the government's, but capitalism's back then - leading to certain lessons being learned, at least for a while.

Large entities and government are peas in a pod.

Nice try, ChrisA, but the 2008 crisis was brought to you by the big government/big business symbiosis, and large, centralized production, is more closely associated with socialism than capitalism.

"After I explained the premise of this book to one of my colleagues, Bryan Caplan, he shrieked to me: “But, but . . . how can people be ungrateful toward corporations? Corporations give us everything! Corporations do everything for us!”

So does the Supreme Leader, Mr. Kim, who is a personal friend of Mr. Trump's, employs his people, provides them with the food they eat and the devices they are allowed to use, commands the Army that protects it from imperialists, etc. His father even wrote operas and directed movies. What would be of North Korea without the Kims?

Yes, I trust corporations. But, corporations are humans organizations, therefore they're fallible.

Dislike is a bit of straw man because only very few people actually dislike corporations. A few other people distrust them. I think most people is in the situation described by the Ronald Reagan's phrase: "trust, but verify".

Reagan used the phrase on the context of the Cold War and nuclear disarmament. Corporations may also be in charge of things/processes which outcomes are very important such as labor safety, labor rights, industrial safety, food safety, drug safety, etc.

So, it's not suspicion or dislike, it's just quality control.

Indeed, quality control is a good analogy. I don't hate the quality control guy in my company. He neither is not suspicious of me, nor dislikes me. No feelings involved. We just acknowledge we're fallible and we have to cooperate to produce great results.

Suspicious of big business? Pray tell. Boeing, in its rush to beat its competitor to market with a new aircraft, installed technology that wasn't sufficiently tested and didn't warn the buyers or pilots; indeed, the technology to prevent the technology from sending the aircraft and its occupants to their deaths was sold as an add-on at extra cost. Will Americans fly in the aircraft when it's returned to the fleet? Will Americans ride in automobiles that are unsafe at any speed? Am I suspicious? Yes, I'm suspicious of an economist who ridicules Americans for being suspicious of big business. What are we supposed to do, worship big business and worship the markets they rode in on?

You may wish to read up on the issue prior to posting comments.

As the pilots of the doomed Boeing jets in Ethiopia and Indonesia fought to control their planes, they lacked two notable safety features in their cockpits. One reason: Boeing charged extra for them. https://www.nytimes.com/2019/03/21/business/boeing-safety-features-charge.html

Because in a libertarian market business need not be big. Libertarians assume liquid pricing with low transaction costs. So it behooves one company to buy its input from another company 'just down the street' ,rather than buy that company.

I majored in economics in the mid 1990s. The thought that the profession was about defending "big business" then, instead of "free markets," would have struck my professors as odd. BIg businesses can, and do, all sorts of things that are contrary to market functioning. It seems like Tyler, Bryan Caplan, etc. have shifted over time to a consequentialist justification of the totality of big business activity. There's plenty of room to offer that defense, but it's different that what I consider to be libertarianism/classical liberalism. Hence the skepticism.

I think Tyler is just defending BB from the overwrought criticisms BB faces. They are similar to people. Most are good and operate in their own self interest. Some are bad. There are a sizable number on the left who just see BB as evil.

Substitute "government" with "big business", and it becomes less puzzling. What's more puzzling to me is someone suspicious of power wielded by government, yet agnostic about power wielded by big business. As if the effect on one's life in one instance is automatically evil, and in the other, a shrug. Particularly in a place where power in either sector goes hand in hand with the other.

+1

Well, when McDonalds has the power to imprison and/or execute people, you guys might have a point. Or when Burger King can separate families at the border.

But if the totality of their power is futile in the face of my “no thanks, I’d prefer to not buy your products” then your argument is prima facie absurd, dangerous, and stupid.

Yeah, next time I get the chance to vote out the President of McDonald's I'll remember that. Can you tell me who my local Representative and Senator is for McDonalds because I want to discuss environmental governance with them.

Which bottom tier university is your nonsense sociology degree from?Let’s pay the tax on bullshit. You game?

In the meantime you can read up on exit and voice.

I’m sure you constantly remind the Jews that they got to vote on Hitler. So by your definition the Holocaust is infinitely less egregious than people buying Big Macs.

My guess is infantile sociology professor, although I’d also go with economics PhD from a terrible school that doesn’t require math.

I’m game, let’s let Caplan rate it. We can each submit CV.

Put up or stfu.

You are WAY too obsessed with everyone's CV, especially your own. Purest ad hominem. Make an argument and give the degree-measuring schtick a rest.

"What's more puzzling to me is someone suspicious of power wielded by government, yet agnostic about power wielded by big business."

It works either way. Government is bigger than big business and has greater power. So one should rationally be more suspicious of government than big business. But you should rationally be suspicious of both.

Anyone that is very suspicious of one, but not the other isn't being rational.

From time to time I refer to the libertarian-authoritarian axis, which seems to offend both libertarians and authoritarians. Maybe that's because they deserve each other. It's not as though Cowen's fondness for big business makes him an outlier at GMU: Henry Manne was best known as a staunch critic of antitrust enforcement. I am a believer in balance of power, and that would include bigness. If business is to be big, government must be big in order to produce a balance. If not, government becomes the tool of big business. And indeed it has. Cowen would argue that markets will keep big business in line, while an equally big government will not only diminish the work of markets but become a tool of big business. That argument defies observation: as business has become increasingly concentrated, limitations on business political contributions have been eliminated, and antitrust enforcement has all but ended, the power of government has been unleashed to serve the interests of big business. And it was libertarians (Mr. Manne most conspicuously) who promoted what has produced the libertarian-authoritarian axis: libertarians warned of regulatory capture, and by God they helped deliver it.

I view corporations like my neighbor's dog, who is in theory well-behaved but is responding to incentives not under my control. He probably won't, but could easily attack me at any moment, because of some imagined threat against its master.

Government is also like my neighbor's dog, but constantly growling.

In my case, it's because I read Adam Smith:

“The proposal of any new law or regulation of commerce which comes from this order (profiteers), ought always to be listened to with great precaution, and ought never to be adopted til after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

And...

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

The suspicion of “any new law or regulation” might wisely not be limited only to those explicitly related to commerce.

And also recognize that politicians are a trade is the above sense.

I've worked for "Big Business" all my life and here are my observations.

1) If there is a chance to profit by acting unethically and get away with it, I've never observed big business turning it down.

2) Most of the companies I've worked for have been able to successfully lobby government for things that are good for them and bad for others.

3) Being an employee of a big business firm is incredibly dehumanizing.

Already this morning I have one email from Corporate HR that I would characterize as Green Grocer level propaganda, one related to my work full of patent untruths that everyone does/should know aren't true, but are plowing ahead with anyway for political reasons, and a second HR email literally asking me to do some nonsense to get the equivalent of achievement points in a video game.

4) Being a customer of a big business firm is incredibly dehumanizing.

Have you ever called a customer service line?

Now, I work in the notoriously terrible FIRE industry. So maybe it's different a a big business that does real work (Chick-Fil-A seems nice), but its my sector that people hate most of all.

asdf, this is the bravest comment on the thread. Thank you for sharing. I used to work for a big four accounting firm in technology consulting. Every bit of this rings true.

Very sorry for your situation, but you can always leave and start your own business! Please consider it. It's America's only hope.

Already this morning I have one email from Corporate HR that I would characterize as Green Grocer level propaganda, one related to my work full of patent untruths that everyone does/should know aren't true, but are plowing ahead with anyway for political reasons, and a second HR email literally asking me to do some nonsense to get the equivalent of achievement points in a video game.

Except for the last item, that's life in higher education as well. We live in a decadent age where the bullsh***ters get promoted.

The author has quite obviously never been fired, nor for that matter held a job. Really stunning deterioration of intellectual rigor and perspective.

This also is colloquially but not mechanically or legally true:

"senior management of the corporation has a legally binding responsibility to maximize shareholder profits"

Shareholder populations are remarkably diverse, and there are many distinctions between the "interests" of shareholders and "profits" to shareholders, certainly in terms of timeframe but in many other dimensions as well, like control. Sadly I feel myself bored already.

This is colloquially but not mechanically or legally true:

"senior management of the corporation has a legally binding responsibility to maximize shareholder profits"

Shareholder populations are remarkably diverse, and there are many distinctions between the "interests" of shareholders and "profits" to shareholders, certainly in terms of timeframe but in many other dimensions as well, like control.

All human organizations contain dysfunction, some a lot, and a few actually go out to commit evil.

A genuine centrist, moderate, pragmatist, will admit this, and cite examples from government, industry, nonprofits, religions, ...

People who want a simple world will try to reduce that complexity, and tell you foolishness or evil can come from only one source.

So of course big business cannot be simply trusted, any more than you can the Catholic Church.

The trick is to interlock as many institutions and centers of power as possible, so that none can be preeminent. The breakup of large monopolies might be part of that, though I am agnostic on whether the current crop have to be broken up now.

Big business serves its purpose. It's fine. But cheerleading for big business strikes an odd chord. Big business can take care of itself.

You could say the same about big government of course. Yet there are plenty of cheerleaders for it. Even in the case of cheerleading for terrible authoritarian regimes. Chavez was a thug and yet he had plenty of cheerleaders. The NRA. Planned Parenthood, Ivy League universities, etc all have cheerleaders. The press has cheerleaders. Churches have cheerleaders. The idea that cheerleading for big business is in a class by itself seems unsupportable.

Yes, cheerleaders for government are even creepier than cheerleaders for big business.

Other cheerleaders bother me less...

No one is asking this question.

Why do lawyers have such a better reputation than business?

There are and have been lots of shows on TV and movies about heroic lawyers, lawyers putting away bad guys (often businessmen). How often are lawyers (aside from politicians) portrayed as greedy, selfish, and corrupt?

But businesses are often portrayed as such. Consider "Dallas" or "Dynasty" or "Billions." And even in cop or lawyer shows, businessmen are often the enemy. How often are lawyers carried away in handcuffs?

https://www.youtube.com/watch?v=m2VxpTMAbas

Because big business are, almost by definition, bigger than the social units where humans evolved during thousands of years? we are used to the tribal chief being someone that we talk personally everyday, not a CEO that many people don't even know.

Why would this surprise anyone? Large corporations are massive powerful entities whose primary loyalty is to someone other than you. Entities like that aren't generally beloved. We have no obligation to interact with corporations on anything other than an arms length basis with a primary focus on our own self interest because that is how they interact with us.

An article of Paul Graham that, in the end, is a bit about that (big business not being the natural way of organizing human labour):

http://www.paulgraham.com/boss.html

Why is there so much suspicion of big business?

Compared to any other impersonal entity, there isn't. There might have been when Ralph Nader was riding high. That was 40-odd years ago.

To whom are you comparing big business? Higher education is agreeable for its employees, but hopelessly bloated, inefficient, deceitful, and rent-seeking to both its clients and the broader society. The legal profession performs some necessary services, but is largely a rent-seeking operation wherein crucial gatekeeper positions are occupied by people who fancy the rest of society is under their tutelage. Public agencies are commonly studies in slatternliness, with wretched regimes in recruitment, promotion, and remuneration. The residue of the labor unions is now preoccupied with maintaining public agencies in their current state for the benefit of those agencies' (union) workforce. The churches are a mess, dominated by generic NGO functionaries, by people who want to be den mothers on salary, by witless singalong leaders, and by academics who regard the study of theology as a species of literary criticism and are embarrassed by all the faith-and-morals stuff. As for the philanthropic sector generally, how many of them are more successful at providing wheel-spinning employment for people rather than accomplishing anything a 3d party would care about?

Everything completely sucks. And yet life goes on.

I am not a fan of big anything. Big business. Big Labor. Big government. Big Universities. Or even Big Military or Big Hospitals even though I have been employed by both the latter to great benefit.

The problem with "Big" is that it concentrates decision making power into fewer hands and they can drive massive changes to the detriment of everyone. Worse, "Big" often means that those who actually are the catalyst for change always have far less information than the aggregate and worse often do not even know they are making a choice.

Take for instance, something like Twitter. Twitter decided to build out a business model that basically seems to run off raw emotion and virtue signalling. I am not big into Twitter, but for every Tweet I have ever seen that is useful and helpful I have seen 50 that are useful and frankly harmful. In many cases, Twitter did not set out to create networks where ever more extreme positions must be adopted to avoid the howling mob of one's own partisans ... it just ended up doing that.

Similarly tobacco companies did not set out to addict the majority of American men to carcinogenic substances for profit. Yet by the 1940s they had done just that. Then we had this "big" entity with a vested interested in keeping people addicted and addicting the youth of the next generation. Sure, the executives were lying heartless bastards who were self-serving and did terrible things to keep themselves on top ... but that is exactly who ends up on top of "big" things. After all Jimmy Hoffa was convicted of bribery, fraud, and jury tampering. Take your pick of Trump, Clinton, Obama, Nixon, LBJ ... everyone can name at least one president they think acted similarly.

"Big" things take on a life of their own. They can, for arcane often unknown and unknowable reasons utterly change lives. And the people who tend to succeed are those who have the fewest restraints.

Do "big" things have the ability to accomplish more? Absolutely. Big Government managed the most complicated logistical effort ever seen over the course of WWII. Large scale hospitals can manage six way kidney transplants or can churn enough volume to have surgeons with thousands of cases under their belts in obscure procedures.

Yet these "big" things can easily crush you and if you were a psychopathic narcissist; would you not flock to "big" things to place yourself into a position of power.

The truth is more people today have more of their life controlled by the whims people at leverage points within "big" entities than ever faced real interference from feudal lords. Worse, "big" entities are frankly unpredictable and unknowlable; almost exactly like the opposite of what our species is hardwired to prefer.

I mean, who would have thought thirty or forty years ago that Big Business would be willing to crush the livelihoods of people who disagreed on gay marriage? Who would have predicted that presidents would feel free to arrogate to the executive the power to change de facto immigration policy without congressional input? And that both parties would feel free to do this?

Frankly, given how terrible "big" things are at being safe, predictable, and knowable or any of the other things humans are hard-wired to like; I can only conclude that their material and psychic benefits must utterly stupendous. Thus it seems quite obvious to me that a drop in the marginal utility provided by "big" things (like non-governmental labor unions after the 70s, businesses post-2007, the government post 2008/2016, the tech companies today) should result in utter destruction of popular approval.

A lot of this rings true, but in a country of 330 million and a world of 7+ billion, there's really no other way to organize things. Something's gonna get big in that world. Economies of scale are very real and very important.

you could say a lot of that about government, no?

Like in the bribery to get into the "best schools", everybody who works for a corporation sees quite a bit of unfairness and injustice. The top folks DO get paid "too much", and the "meritocracy" of advancement is too often tainted by the personal feelings of the higher-ups; VPs & directors.

"Fair" taxation policy would result in higher growth in the after tax median income, than in the top 10% or top 1%. Last year CEOs of top 500 (forbes) companies averaged 16% increase, about $10.5 million

Real median household income (~$61k) went up much less.

The unwritten collusion between CEOs and those on their own board, often CEOs of other companies, is to push up the salaries of the CEO. Yes it's important. But they are already getting too much, relative to median workers in corporations getting too little of the value added by the Big corporation.

Business is needed and in theory, should be fair markets right? But who regulates or ensures it's fair - governments. Governments are all corrupt and all bow down on every issue for the right amount of votes or $. Corporations then manipulate policy, in some cases completely control them - it's a vicious cycle. The regulator and the regulated are all in bed together.

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