Other recent articles under: Corporations as of Oct 30, 2011
Topic: Corporations
Is Corporate Greed the Problem?
The OWS movement perceives corporate greed as the source of many of our problems. Is this truly the case? by Gene DeNardo
(libertarian)
Sunday, October 30, 2011
While the Occupy Wall Street Movement has been careful to avoid establishing a specific agenda, it is impossible to miss the movements disdain for what they refer to as “corporate greed”. Addressing corporate greed is obviously a cohesive element that is helping to bind the movement together.
Are corporations and greed the problem? Do we owe our economic malaise and great wealth disparities to this “corporate greed” factor?
The occupiers also have a problem with “corporate personhood” and I am in complete alignment with the demonstrators on this, although I would suggest that their demands in this area don’t go far enough. The corporate form itself should have absolutely no legal standing in a “freed” market, other than existence as one of many possible business forms and associations. For the corporate form to act within a true free market, it must have neither privilege not disadvantage, just as individuals and any other business entity must.
Nevertheless, corporate greed itself has little to do with the inherent problem we face ever realizing anything close to a “freed” market. After all, if we actually had a “freed” market, greed would be classified more in realm of virtue/vice than as an economic force. Greed can only be a force within economics when it is inseparably linked to political power; when one can gain economically {and greedily} through political means.
Many libertarians tend to associate greed loosely with self interest. The Austrian economic theories of self interest have always sat well with libertarians, but self interest and greed are not synonymous. In fact, they are most often opposing elements.
Most of us have enough self interest to economically keep our heads above the water. This is healthy and necessary. Greed, in contrast, is the desire and attempt to take much more than one needs.
At first glance it may appear that self interest can lead to greed, but taking “more” than one has a need for usually has little to do with self interest. Self interest is the ability to keep ones own needs in mind and attempt to perform the actions needed to satisfy those needs.
It is even likely that one can be greedy in one area, have far too much of one thing and completely ignore one’s own needs in another area due to a preoccupation with obtaining too much of the one thing. An example is the individual who is so preoccupied with money that he/she works endlessly and lets their family life go down the tubes.
This is an obvious exhibition of greed and an equally obvious lack of self interest. A person acting in this manner may soon have too much money and too little family. Unless one believes losing one’s family is in one’s self interest, our example shows that greed can lead to a complete lack of regard for one’s self interests, such as maintaining one’s family life. The endless pursuit of money, wealth, power or status almost always results in the loss of other goods that fulfill our more basic and in the long run, more important needs.
The greed that the OWS movement is obsessed with is a different sort of greed. Though the example above is an example of greed, it has little relation to the greed of Goldman Sachs or Fannie Mae. The action of our workaholic only affects himself and those around him, such as his family and friends. The “greed” of the corporate giants has the power to affect humanity itself.
But, if this is true, where is the power from? My guess is that the OWS group, if they actually spoke as an entire group, might say that it was due to their “economic” position in our world and society. They might say that their control of capital which both originates and sustains their greed, gives them inordinate power and the ability to control many areas of the lives of average people.
The multinationals do have unchallenged control over the world’s capital and with it wield virtually unchallenged economic power. Given that, any action that might be looked upon as a corporate action of greed most likely would have an impact on the rest of us, the little people. Bank of America’s decision to raise fees, in this light could be looked upon as a “greedy” action that makes us all a bit poorer. The OWS participant might ask why don’t they just act nice?
A conclusion such as this stems from the “give back” notion; the belief that corporations that are acting “greedy” have got to where they are because of collective public action, such as Elizabeth Warren pointed out in her much debated speech. Since we all put in to “set the table” for the business environment, collectively paying for infrastructure, etc., those that benefit have no right to be greedy. Instead, they should take it upon themselves to “give back” and pay more taxes, etc., much as Warren Buffet has suggested.
It dismays me that such a large group of well meaning citizens could so get the point and so not get the point. While they might point out what it obvious, when a collective group obtains a position where they have the option to take more than they need, they will do so, they miss so blatantly what is not so easily seen. While “greed” may indeed be the symptom, what allows greed to surface and actually have any potential to effect economic outcome is the enabling force of the state. Without the laws, rules, regulations, institutions and force of the state that subsidize such behavior, greed is economically impotent. .
Greed in the business environment has no influence on market outcome unless that greed can be satiated by political power. The transformation of greed into profit for the multinationals and loss for the general public can only occur when the state institutes and enforces market advantages and monopolies that allow greed to be realized. Greed certainly may exist in great supply within our corporate elites, but the exploitation that the left observes and protests do not result from greed but from direct access to state power.
The conclusion most commonly drawn up by the left since Roosevelt has been to harness some of that state power for the exploited and force state action that “returns” some of these politically connected spoils. Conservatives point to this type of action as “big government”. In reality it is a reaction to government that is already far too big and far to willing to favor and bestow with public financed benefits those in industry and finance who snuggle up to our leaders.
The return by the mainstream left to classical liberal thought of the early 20th century would be a rekindling of the belief that the centralized state exists for the benefit of the rich and powerful. That the exploitation and disparity that the modern left blames on corporate greed is hatched in the warm nest of centralized state power.
If this shift became widespread enough to encompass the majority of the modern left and was convincing enough to entice the true small government conservative, real concrete change would move from the realm of not likely to probable.
Even with such a widespread shift, the “we” wouldn’t be 99%. But, it could possibly be enough of us to truly weaken the centralized state enough to seriously impact the state/corporate welfare system and free up the economy to include the competitive actions of the dispossessed and disadvantaged. To allow those who wish to work and who can work to work and be rewarded as a freer economy would do so.
If that ever came to pass, corporate greed wouldn’t mean squat.
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Posted By: Jahfre Fire Eater
Date: November 2, 2011 12:02:47 PM
Hi Gene,
I appreciate your take on the greed versus self-interest; and also on the corporate person-hood. I do take issue with some specific phrases and definitions you used.
First, "Greed, in contrast, is the desire and attempt to take much more than one needs." is simply not a useful description because of the political bias it contains.
Greed is the EXCESSIVE desire; specifically the desire for gain, not the taking nor the attempting to take...also, greed has absolutely no relationship to 'need' whatsoever. Your tacking on the words politically charged words "take," "attempt," and "need." do a great disservice to your points.
Desire for more is not greed. The word 'more' begs a comparison. More than what? Your bias is evident when you compare 'more' to your arbitrary assessment of one's 'need' as the basis for comparison. However, a more objective view is to compare 'more' with one's current value in the relevant commodity. (Wealth, happiness, solitude, friends, etc.) For instance, I desire more separation from the trappings of society but not excessively. This lack of excess is why I can joke about being hermit-like without actually becoming one for real.
The other phrase I can't abide is "Corporate greed." Corporations, even in their status of legal person-hood, have no desires. Diverting attention from the individual humans involved in making corporate decisions is exactly what the corporation is created to do. I think it is important to resist falling for that misdirection. The individuals in positions of corporate power may be greedy (or not) but the corporation is never greedy.
Individual greed is only economically relevant when it is the basis or justification for force or fraud to achieve the next increment of 'more.' Some of our nation's net consumers of government funds may be far more greedy than the worst corporate board member or congressman. Their efforts (Human Actions) aimed at obtaining more of that cash flow from the government through force or fraud identifies them.
Corruption is when more than one individual's greed is at work to impose force or fraud on other individuals. Simplistically, corporate boards are 'hired' by shareholders to deliver gain. (Excessive gain?) The majority shareholders are banks and other large corporations. They hire lobbyists to influence legislation. (or they buy legislators outright) In the end, Government creates the environment in which their own greed is best satisfied. The banking and corporate legs of the corruption are always at the mercy of the congress. This is why limits on government are the only way to keep markets honest and corruption at bay.
