As a libertarian, I find large corporations a fascinating, and sobering counter-argument to my libertarian ideas. Here is an example of central planning evidently working better than distributed self-coordination. The question is why is this true, and at what scale does it stop being true (as it evidently does, at the scale of entire countries).
To my mind, a country is essentially a large, heavily armed not-for-profit corporation. If you dislike big corporations, you should dislike big government. And, if you are a libertarian who thinks big government exists only because it is heavily armed, then how do you explain the existence of (unarmed) large corporations? (And don’t tell me they exist because they’ve captured the armed government – they may do that, but that’s not why they exist.)
Also, as a libertarian, I find I have a distaste for large corporations (if you dislike big government, you should dislike big corporations), which gives me a starting point for finding common ground with my leftist friends (who generally dislike large – not all – corporations, but think government – a large, armed corporation is the solution).
As you know, the common ground with the Left is rather limited in this regard. The Left thinks of the government as a countervailing power. It represents “us” against the power of corporations. Libertarians do not think of the government as representing “us,” or certainly not doing a very good job of it. In that regard, the libertarian perspective does not strike me as obviously right or obviously wrong a priori. I would say that as a matter of empirical observation, I think that the libertarian perspective works better. That is, I think that market competition tends to work better than government at curbing abuse by large corporations. As I like to put it: “Markets fail. Use markets.”
What does the “power” of corporations mean outside of the government helping them?
Corporations derive “power” by being able to accomplish things. They are able to accomplish things because they have accumulated the tools (capital) and the talent (labor) into a pool that can quickly be set to work on a task. The capital (tools) is just “old labor” that has been saved rather than consumed.
The corporation, being an entity not tied to human lifespan, can accumulate a lot of “old labor” over time. It is important to distinguish between “old labor” that can be used by current labor with the proper skills to make additional items for consumption or retention in contrast to “old labor” that one hangs on a wall to look at or accumulates in a museum. The latter may have intrinsic value but it is not useful in the productive sense.
Look at it this way, a corporation can rationally make an investment in, say, a forest that won’t be harvested for 100 years. An individual, assuming they are not counting on building family wealth or sale before harvest, has little incentive to invest in such a forest as the investment won’t pay off in their lifetime. The benefits will accrue to someone else and their current labor will be wasted in a strict economic sense. Other motivations may come into play, but they are consumptive rather than productive.
“if you dislike big government, you should dislike big corporations”
How does that follow? I am free to withhold my custom from any big corporation I wish. I am free to decline any job offer I receive. I am free to establish a rival entity. My relationship with the corporation is purely voluntary. That seems like a big difference to me.
The parallel is revealed once you think of a government as merely another large not-for-profit corporation. Are you not also free to withhold your custom? (Yes, you are; you can pay no taxes if you don’t work, and rely on charity for food and clothing.) Are you not free to decline a job offer? (Yes, you are.) Are you not free to establish a rival entity? (People have tried, famously.) Is your relationship with the corporation purely voluntary? (Sure it is; you are free to leave – just apply for a passport, go, then surrender your citizenship at a consulate.)
In all cases, of course, the answer is “yes, but at huge personal cost”. And, as corporations get bigger, increasing numbers of people find they face the same answer. It is much easier to escape the clutches of your city government than to fully disengage from Google, for example; and while Wal-Mart does much that is good, it’s sobering to realize that it has larger annual revenues than all but five OECD governments (U.S., Germany, France, U.K. and Italy).
The question that may be truly important is, what is the personal cost of refusing to do business with this corporation? Even in the case of Wal-Mart, for people with significant resources it’s quite small – but it’s not small for everyone. If you live in a small town, you may not have a lot of employment options, nor shopping options, nor the resources to relocate. If you’re one of Wal-Mart’s vendors, you may have no comparable options at all. Similarly, if you’re a billionaire, avoiding doing business with the government is relatively easy (although the U.S. has early termination penalties on its service contract); but if you’re middle class, you can’t legally work anywhere else, so you’re stuck. (This, by the way, is the real point of “immigration” policies – they’re like agreements between employers not to employ each other’s people.)
So, yes, if you’re uncomfortable with big government, there are very similar reasons to be uncomfortable with big corporations. But, equally, you can start a conversation with our leftist friends: if you’re uncomfortable with big corporations, there are very good reasons to be uncomfortable with very, very, very big ones – like governments.
Good comment.
Your reply was well written and civil — thank you — but I don’t think you quite get the libertarian viewpoint, which is this: Walmart does not have the power to force someone, under threat of violence, to be its customer. Government does.
I would not suggest — anywhere, but especially not on this blog! — that the freedom-coercion is the only conceivable axis of discussion. But since the blog post is explicitly about that axis, it is fair for me to say: corporations, unlike governments, have no actual coercive power at all.
Why do large corporations exist? There are probably a number of reasons, but my sense is that the primary answer is economies of scale, which can offset high fixed business (and regulatory ) costs.
I don’t think large corporations are good counterexamples to the problem of central planning, as a single country such as the United States has well over a thousand large corporations (mid-cap and higher sized businesses whether private or publicly traded), and there are thousands more large foreign corporations which are either direct or at least potential competitors. Despite being concentrated on a very narrow part of the overall economy, and despite having all the advantages of size, brand recognition, geographical diversification, etc., corporations can and do fail (and some would have failed in the absence of a bailout). Ultimately, the corporation is still accountable to its customers, and if it fails to deliver to its customers it shouldn’t expect to survive. That’s a powerful feedback mechanism that a government central planner doesn’t have. Corporations also have to contend with the fact that new startups can grow to become large competitors which can eat their lunch (Borders and BestBuy have had to deal with Amazon which is barely 20 years old, Nokia and Blackberry had to contend with Apple, etc.)
When you work at a large corporation, you see a lot of negative side effects which in all probability are correlated to size: bureaucracy, unwillingness to take risks, internal politics, group think, etc. A small business with 18 employees has to take risks in order to survive, it isn’t tied down by bureaucracy (in all probability it has no useless employees), etc.
Now corporations still thrive because overcoming high fixed costs is a meaningful thing, but when we consider the federal government, it’s essentially a giant corporation with no competition or profit feedback mechanism. If we took that institution and tried to make it provide every product and service in the country, it isn’t hard to see how that could become problematic.
Sure governments fail! They’re very big, and very big corporations often take a long, long time to fail, but they do fail. The Soviet Union no longer exists. Communist Romania, gone. Nazi Germany, gone. Numerous European states have been gobbled up since the Middle Ages by bigger, more successful ones. Some have broken up (the United Kingdom of Great Britain and Ireland, for example; and the former Yugoslavia).
And, yes, big corporations famously lose touch with their employees, customers, and even reality, because their internal management doesn’t have the right feedback mechanisms (it becomes much more about internal empire-building than building the overall enterprise).
I agree that governments, like any other institution, can certainly fail. But I do think that the distinctions I drew attention to between large corporations and government (size & scope, financing mechanism) are important.
In particular, with regards to centralized economic planning by the government, the sheer scope of the government trying to plan the whole economy is simply daunting. Additionally, multiple state industries could be moribund but continue limping along in existence whereas if they were private corporations they would have long before been forced by economics to make changes or end up failing.
Well, I am not a libertarian, but I think the commentor is exaggerating the dichotomy between decentralized activity and planning while simultaneously missing the critical distinction between government and private planning.
The argument for decentralization is not necessarily an argument against all centralized or top down planning, it is against using this as the only or dominant means of planning. Many complex adaptive systems have a blend of both, certainly corporations do.
For example, with a trillion or so cells each performing thousands of functions every second, certainly the human body is 99.9999% decentralized activity. But it is definitely not 100% decentralized. Economies are from one perspective extremely decentralized, if for no other reason than these large corporate entities (which are themselves a blend of a bit of centralized and oodles of decentralized decision making) are competing and cooperating with each other in a decentralized way.
On my second pushback, I agree with Ricardo that the distinction between compulsory obedience and voluntary cooperation is paramount. Corporations, within a properly working free market system, involve voluntary interactions where the parties directly involved (employees, investors, suppliers, customers and so on) are all choosing to cooperate in mutually beneficial interactions. This is not necessarily the case with top down government decrees.
I see no fundamental conflict between libertarian ideology and the existence of extremely large corporations. None at all. Indeed, if a non libertarian used either of the two as arguments against libertarianism, I would suspect they were straw manning.
“I think the commentor is exaggerating the dichotomy between decentralized activity and planning while simultaneously missing the critical distinction between government and private planning.”
To paraphrase, the comment is off because a) libertarianism doesn’t reject central planning and b) government planning is forced, whereas private planning is voluntary.
I agree with the first, but I think most libertarians have a tough time with it. In my view, libertarianism differs from anarchism in a crucial, little-recognized way: libertarianism is a policy prescription for government; anarchism is a prescription for no government. Instinctively, I tend to fall in with the anarchists, and I think many – my impression is most – libertarians do. It is only when my brain kicks in, that I remember the distinction.
I think libertarians put way too much emphasis on the voluntary/involuntary idea, though. When you discover a drunk has broken into your home and is asleep on your couch, you eject her. There may be nothing voluntary about her departure. To say “well, she broke in, that’s different” is correct, but still doesn’t make her departure voluntary. And, in our society there are very few things the government actually makes you do – jury service, I guess. No, you can’t earn income and not pay taxes; but try working at a company while refusing to follow its major policies – same issue. The government maintains a workplace (a secure space, with a legal system); if you want to work there, you have to follow the rules. But, you can choose not to work there.
Just as there’s no true central/decentralized dichotomy, there’s also no voluntary/involuntary one. Instead, in both, there’s a continuum. The problems of government stem from it being very far over on both. But, that’s not necessarily unique to governments.
Interesting point. We seem to basically agree on the centralized/decentralized spectrum, but let me push back again on the voluntary/involuntary issue.
I see libertarianism (which I seek to understand even as I reject it) as believing in voluntarily agreed upon rules such as non coercion, property conventions, and so on. There are an infinite number of possible rules, definitions and conventions, so to form a society people need to have some way to agree to agree on them. A libertarian would suggest that this agreement is voluntary, but once agreed to it can be totally legitimate. Most libertarians support our “right” to agree to be taxed. (I believe I have a right to agree to paying taxes, and will defend that right to the death!) They just don’t agree we ever gave it. Pretty sure I never did.
But we voluntarily did agree to the terms and conditions of employment when we decided to join a company, just as we voluntarily agreed to the terms and conditions when we took out a loan on a car, or agreed formally or informally on the terms of marriage (I promise to be faithful and stick with you even if conditions get tough). In addition, there are competing employers, including the option of self employment, just as there are competitors for car loans and marriage.
Long set up to my push back that I do think there is a significant discrepancy between market based (or romantic based) terms and conditions, and government. It is not mutually voluntary. Governments force us to play by the rules, and prohibit competing governments from offering better terms and conditions. This isn’t a difference in degree, but in kind altogether.
With respect to economic matters, western governments’ rules are structurally voluntary (criminal law is another matter, for another day).
When you trade within a government’s territory, is your obligation to pay taxes any different than when you engage in trade on a mall’s territory, and the mall wants rent (or royalties)? If your payments to the government are “not voluntary”, then in what sense would your payments to the mall be “voluntary”?
And yet, you have the sense that somehow the government’s rules – on taxes (“mall fees”) – are not really voluntary, that they’re qualitatively different to a truly voluntary private arrangement (such as with a mall). I propose that’s because of the extremely high cost of switching to another “mall”, i.e., country. It is the high switching costs that make something that is structurally “voluntary” become something “less than voluntary” in fact.
In other words, trying to make a “voluntary/non-voluntary” dichotomy doesn’t work: there’s a continuum. And, on that continuum, on economic matters, countries and companies don’t behave in fundamentally different ways. With both, there are degrees of voluntary-ness, related to (asymmetric) switching costs.
And this is where national governments start to stand out: they can impose extremely high switching costs, through immigration constraints, exit taxes, occupational licensing, geographic boundaries matched to cultural boundaries, limitations on the right of return, etc., etc., etc. And, demands for government collusion to stop “harmful tax competition” are routine also, of course.
Still, this is not uniquely governmental behavior, and this is where leftist criticisms of the libertarian “voluntary/non-voluntary” framework may hold water. Is it really “voluntary” when you take a very low wage, if you need to eat and there are barriers to shopping your labor to multiple employers? Corporations do try to limit competitive options, for their customers, for their suppliers, and for their employees. And such behavior can be entirely “voluntary” (in the familiar libertarian sense): when Company A doesn’t want to hire you because you already work for Company B, no-one is being forced to do anything they don’t want to do.
So, no, I see it as a difference of degree, not a difference of kind. I think it’s a mistake to try to support a public policy framework on a claim that there’s a fundamental difference of kind here. (Again, criminal law is another matter.)
Thanks again for the great dialogue. I would have responded sooner but have been busy with family stuff.
“I propose that’s because of the extremely high cost of switching to another “mall”, i.e., country. It is the high switching costs that make something that is structurally “voluntary” become something “less than voluntary” in fact.”
Switching costs and the dynamic of competition and open entry. In a free market I can choose which mall to visit and any entrepreneur can choose to enter as a new competitor if they can charge rents that are positive sum for all parties involved. Thus the dynamic of a market is attracted to positive sum, win win interactions. This is not true of a national government which requires us to pay huge exit/switching costs (severing our culture and networks) to avoid the tax and a prohibition against a more fair tax rate competitor from emerging.
“In other words, trying to make a “voluntary/non-voluntary” dichotomy doesn’t work: there’s a continuum. And, on that continuum, on economic matters, countries and companies don’t behave in fundamentally different ways. With both, there are degrees of voluntary-ness, related to (asymmetric) switching costs.”
I agree there is a bit of a continuum. But there is also a continuum between jumping a curb and jumping the Grand Canyon. But they are also fundamentally different. You are almost certain to be killed trying the latter. If we keep making one smaller and the other larger, sure they meet somewhere in the middle. But they are still a long way apart.
Yes, governments could actively try to be more voluntary by actively promoting subsidiarity, opt-ins and opt outs, competition between jurisdictions, and so on. Corporations could try to build systemic barriers which made switching jobs tougher. Somewhere in the middle they could meet. But they are still quite far apart, and by the time you get them similar you have fundamentally changed their nature.
“Is it really “voluntary” when you take a very low wage, if you need to eat and there are barriers to shopping your labor to multiple employers?”
Yes. In a free market which does not allow coercion to prevent job hopping and which does not allow companies to prevent new competitors from entering, I would consider them differences in kind. One has a dynamic, or attractor, which pulls it toward voluntary positive sum, interactions. The other has a dynamic which actively promotes exploitation. Again, if you make all kind of changes to both, we could get them to meet in the middle, but in doing so we are fundamentally changing the fundamental nature of the system.
“Here is an example of central planning evidently working better than distributed self-coordination. The question is why is this true, and at what scale does it stop being true (as it evidently does, at the scale of entire countries).”
Ronald Coase looked at this issue. I highly recommend this excellent article (readable and succinct) to the commenter: https://www.colorado.edu/ibs/es/alston/econ4504/readings/The%20Nature%20of%20the%20Firm%20by%20Coase.pdf
The wikipedia entry on Theory of the Firm briefly summarizes:
“Thus, Coase defines the firm as “the system of relationships which comes into existence when the direction of resources is dependent on the entrepreneur.” We can therefore think of a firm as getting larger or smaller based on whether the entrepreneur organises more or fewer transactions.
The question then arises of what determines the size of the firm; why does the entrepreneur organise the transactions he does, why no more or less? Since the reason for the firm’s being is to have lower costs than the market, the upper limit on the firm’s size is set by costs rising to the point where internalising an additional transaction equals the cost of making that transaction in the market. (At the lower limit, the firm’s costs exceed the market’s costs, and it does not come into existence.) In practice, diminishing returns to management contribute most to raising the costs of organising a large firm, particularly in large firms with many different plants and differing internal transactions (such as a conglomerate), or if the relevant prices change frequently.
Coase concludes by saying that the size of the firm is dependent on the costs of using the price mechanism, and on the costs of organisation of other entrepreneurs. These two factors together determine how many products a firm produces and how much of each.”
In my heart of hearts I want to believe this is true, but, there
“Here is an example of central planning evidently working better than distributed self-coordination. The question is why is this true, and at what scale does it stop being true (as it evidently does, at the scale of entire countries).”
Ronald Coase looked at this issue. I highly recommend this excellent article (readable and succinct) to the commenter: https://www.colorado.edu/ibs/es/alston/econ4504/readings/The%20Nature%20of%20the%20Firm%20by%20Coase.pdf
The wikipedia entry on Theory of the Firm briefly summarizes:
“Thus, Coase defines the firm as “the system of relationships which comes into existence when the direction of resources is dependent on the entrepreneur.” We can therefore think of a firm as getting larger or smaller based on whether the entrepreneur organises more or fewer transactions.
The question then arises of what determines the size of the firm; why does the entrepreneur organise the transactions he does, why no more or less? Since the reason for the firm’s being is to have lower costs than the market, the upper limit on the firm’s size is set by costs rising to the point where internalising an additional transaction equals the cost of making that transaction in the market. (At the lower limit, the firm’s costs exceed the market’s costs, and it does not come into existence.) In practice, diminishing returns to management contribute most to raising the costs of organising a large firm, particularly in large firms with many different plants and differing internal transactions (such as a conglomerate), or if the relevant prices change frequently.
Coase concludes by saying that the size of the firm is dependent on the costs of using the price mechanism, and on the costs of organisation of other entrepreneurs. These two factors together determine how many products a firm produces and how much of each.”
In my heart of hearts I want to believe this is true, but, there Bezos and Musk with their dueling rocket programs make me think entrepreneurs are also prone to hubris.
Thank you for finally mentioning Coase and the firm. However, the conundrum you are presenting is a bit of a non sequitur:
> In my heart of hearts I want to believe this is true, but, there Bezos and Musk with their dueling rocket programs make me think entrepreneurs are also prone to hubris.
Remember, the constraint on firm size and activity is not the lack of hubris by founder entrepreneurs but the state of the marketplace and the firm’s ability to satisfy customers. Zark Muskerberg can ride his hubris to the moon, but unless people are willing to pay for his products in excess of the cost of production, his firm will fail. That founder entrepreneurs may have an excess of hubris does not challenge Coase’s theory.
Thank you. I appreciate the correction/clarification.
I’m glad someone posted Coase’s theory of the firm. Internet libertarians seem to be a very poorly read bunch.
“Libertarians do not think of the government as representing “us,” or certainly not doing a very good job of it.”
Government does represent “us” in the general sense since it is the organs charged with “administering the apparatus of compulsion” that is society. Of course, such administration is subject to capture by factions and may not represent “us” as constituents.
I found the following from Mises to really help me expand my thinking beyond mixing government and state as a single entity:
“We call the social apparatus of compulsion and coercion that induces people to abide by the rules of life in society, the state; the rules according to which the state proceeds, law; and the organs charged with the responsibility of administering the apparatus of compulsion, government.”
–Mises, Ludwig von, Liberalism (pp. 35-36)
It is important not to confuse “us,” which is people in general, with a person or persons. The latter can be rational, compassionate, tempered, etc. The former, the mob, seldom is and is easily inflamed. Still unique in the world is our constitution’s limitation on laws and usurpations of basic rights even by majority vote by “us”.
Large corporations from 1956 ( in fact, the largest US corporations from 1956):
Allied Chemical and Dye Corporation
American Can Company
American Smelting & Refining Company
American Telephone and Telegraph Company
American Tobacco Company (B shares)
Bethlehem Steel Corporation
Chrysler Corporation
Corn Products Refining Company
E.I. du Pont de Nemours & Company
Eastman Kodak Company
General Electric Company
General Foods Corporation
General Motors Corporation
Goodyear Tire and Rubber Company
International Harvester Company
International Nickel Company, Ltd.
International Paper Company ↑
Johns-Manville Corporation
National Distillers Products Corporation
National Steel Corporation
The Procter & Gamble Company
Sears Roebuck & Company
Standard Oil Co. of California
Standard Oil Co. of New Jersey
The Texas Company
Union Carbide Corporation
United Aircraft Corporation
United States Steel Corporation
Westinghouse Electric Corporation
F. W. Woolworth Company
Large organizations frequently arrange themselves around command and control structures. And this works because… sometimes it stops working and they get replaced by something else.
Same is true of governments, no?
Much more rarely, and usually a lot messier. See e.g., the American war of independence (success) and the American Civil War (failure).
Big government and and big corporations are indispensable to each other. They are essentially coupled in the treasury curve. Large caps and government obligations tied together by large state pension funds, large bank primary dealer, and large subsidized corporations like Tesla and Amazon. This is not your flea market.
Where is Standard Oil? Markets are what we make of them, and that takes government.
I still believe the Poli Sci theory that if the government can not govern all parts of society that other institutions will step in and perform the governing.
1) In the past you would argue the European Lords were the counter-power to the Monarch power and this got institutionalized with European Parliaments. Or in the US the local church was the main governing control over the population. Now government is organized more around Party as opposed to class and the church power is vastly diminished the last 65 years, I believe Large Corporations are stepping in. Years ago the local large corporation, say Detroit & cars companies, had significant power over local populations. (Populism mistrust of large corporations and local politics was played endlessly during the Western movie cycles of 1930 – 1960. If you look back the Western had more villians being the Large Ranch Owner with hired guns against the small farmer than the villians just being Native Americans. Although there were a few movies, mostly Wayne, that showed it from the large rancher side.)
2) The basic example of corporate governing versus big government is free speech. How people lose sponsor or jobs due to inappropriate speech but are not put on trial? Corporations do a lot to control speech in modern America.
3) Have lots of money and capital gives somebody a lot power in our poli-economic system. The Koch Brothers with purely economic decisions make significant impacts on our society. And I do think that is one of the realities of Ayn Rand that the Jon Galts become the Taggarts in five years.
4) I would say the biggest risk to libertarians is not big corporations but the diminished role of the church. Libertarians love the church teaching young people values but their role is vastly diminishing and I am not sure who is in charge of this. (Teacher Unions?) I think Ross Douthat, Pat Deneen or Rod Dreher have great concerns of global capitalism weakening the church but they don’t offer anything significant to change course. (Take for instance private school attendance is dropping versus public school.)
This is why libertarianism is different to anarchism. Anarchism advocates the absence of government, which fails the game theory test, as you point out. Libertarianism is a policy prescription for government: basically, if you want to be a successful government for the long term, your policies are going to be relatively libertarian – quite possibly more so than your own population think they want.
I’m just scanning the discussion. Has anybody pointed out a key difference between big corporations and big government: that is, a relatively finite set of objectives for the former, and a practically infinite set of objectives for the latter? Big government wants to achieve everything from effective hypersonic weapons on one end to efficacious universal Pre-K on the other (and everything in between); all under one political roof.
No corporation on the other hand, regardless of horizontal/vertical integration, is trying to achieve as wide a set of objectives as even a pretty limited government. Even when would-be-heroic entrepreneurs like Bezos, Musk, Branson et. al. get into arenas such as space exploration they are leveraging their success (or at least their brand, in Musk’s case) to attract discrete investors or customers to a venture usually thought of in National Greatness terms. This highlights another aspect of the difference: even far-flung and abstract goals in corporation are formulated by relatively few people. That’s not the case with government.
It’s not that Arnold’s commenter isn’t on to something. Maybe libertarians (especially “Capital L” Libertarians) underestimate human risk aversion, and overestimate human appetite (especially for adults) for adventure and risk. This is a point that Dan Kahnemann made to Taleb in their NY Public Library colloquy that’s on YouTube somewhere. A great many people, to use Taleb’s metaphor, are happy to be Turkeys. So both corporations and government can be centralized and crappy, and people will adapt and put up with them.
Surely the goal of government is to survive? Yes, seriously. As its major tactic, government seek to maximize the resources available to support its survival. Sub-goals include economic strength to support a military capability (if needed) and a broad array of other resources, and keeping the population supportive (including through economic strength) and definitely not rebellious. The appropriate parallel in the corporate world would be the semi-infinite sets of internal goals and deadlines and targets, HR policies, cafeteria menu selections, IT policies, accounting decisions, etc. peane ad infinitum (if that’s a thing).
As a Lib, I used to think the solution to Big Gov’t was smaller gov’t.
But now I think the solution is for more people to NOT want a Free Gov’t Lunch.
There may not be a Free Lunch, but we all know, and want, lunches that Other People’s Money pay for. Also known as entitlements.
In defense of Trump, we won’t get smaller deficits until Dems start talking about cutting gov’t expenditures; they’re still far away, so tax cuts and big deficits are better, for now.
Because democratic gov’t, which can print money, has a different financial perspective than companies, even Big Corporations, who can’t print money. (Tho Greece might argue that the EU money zone means they gave up that right…)
The Atlantic has a good article about a Filipino guy whose grandfather basically got a Filipina slave for the mother of the author, in the Philippines, who then came to the US. Even in the US, where she had freedom in theory, poor English, no documents, no money (worked all day but only got food), and after 5 years no longer legal — such a woman was not even close to being “free”. Especially not in her own mind.
I don’t like big corporations, either; but I work for them — because they pay better than small companies. Like the gov’t, they have many bureaucrats and rules, and in many individual situations following the rules strictly results in less justice.
But when companies really pursue profit, meaning higher (long term) revenue and lower cost (long term), the decision makers make more wealth creating (= profit) decisions. Including the work culture.
Gov’t decision makers at the very top want primarily to get elected — and inside the agencies, they want more agency power more than doing the original mission of the agency.
Arnold says “Markets fail. Use Markets”. I don’t believe buying-selling markets fail, but there are cases where property ownership is not clearly defined, so there is no way to buy & sell. Like clean air. So that’s a gov’t property problem more than a market problem, but it’s still a problem.
Inside a corporation, the bosses make decisions, and those who have agreed to work agree with the decisions … or are free to leave.
As mentioned, if the big company (like Wal Mart, Ford, or IBM) is the only big employer in the town, leaving usually means a big reduction in salary and/or a bigger risk that alternatives won’t turn out as well.
Big companies DO prove that private, profit oriented planning, can be very centralized yet still work well. At producing profit. There are almost no gov’t agencies with as clear a metric which can be measured: daily, weekly, monthly, and especially quarterly. It’s unlikely there will be.