Libertarians, Democrats, and Corporations

Logan Ferree of Freedom Democrats deserves a medal and a lifetime's supply of Legend Brown Ale for doggedly engaging Democrats in a discussion about corporate power. He posted a challenge issued by Catallarchy blogger Trent McBride with regard to Kos's recent suggestion of a libertarian-democrat alliance. McBride's challenge had a special significance to me: he challenged liberals at Daily Kos to "Persuade [him] that corporate (coercive) power, to the extent that it exists, does not rest on governmental power at its foundation." Ever since Ferree brought the challenge to the attention of the Democrats and liberals at Daily Kos, he's been awash in responses - some more coherent or historically accurate than others.

One issue that springs to mind while perusing the discussion is how vague the typical libertarian position on corporations is. This insight is provoked by repeated liberal claims that corporations would exist and oppress independent of government support. While the claim is wrong on its face - corporations are chartered by the state, and there was indeed a time where this power was jealously rationed - it is interesting that liberals as well as many libertarians cling tenaciously to the corporation as an institution. This is curious given the corporation's statelike bureaucracy and government grants of limited liability and fake personhood, since it seems so unegalitarian and aristocratic.

Libertarians would do well to make their position more explicit instead of conflating corporations with market transactions and general business. As many liberals point out in the course of the discussion, even Democrats are against corporate welfare - so where do libertarians distinguish themselves? My answer is that many left libertarians (such as I) would like to see the corporation's legal status completely abolished wholesale. I find it difficult to reconcile the idea of privileged legal status with either the egalitarian aims of the liberals or the responsible individualism of libertarians.

I simply can't think of an entity rising in place of a corporation that doesn't require special rules from the state in order to exist on the same terms, with the exception of a gang. Insofar as government is a gang, though, we don't lose too much ground in an anarchy. And at least gangs don't have the inertial illusion of institutionality solidifying their place in the social fabric.

In addition to the varying conceptions of corporate privilege, there is a point of slippage between libertarians and left liberal Democrats on the exact nature of coercion. Democrats keep coming back to corporations becoming quasifeudal oppressors in the absence of strong govenment oversight, while Ferree tries and usually fails to nail down what exactly they consider coercive. Over at the original Catallarchy post, Nick seems to understand their use of the word:

Take what is usually the main libertarian goal -- the minimization of coercion -- but start with a somewhat different, but not radically different, meaning of "coercion" than libertarians use. Government wouldn't be coercive if you could easily switch governments -- i.e. if government had low exit costs. Indeed that would be a rather libertarian, perhaps even anarcho-capitalist state of affairs. So let's define coercion and involuntariness as high exit costs. Left-wingers believe that the non-governmental exit costs of life are worse than those of government. When you add up all the smaller high exit cost relationships in life, such as dependency on Microsoft, or dependency on Wal-Mart in a community after they've driven all the smaller competing businesses out, the sum is far greater than the exit costs of government.

Now, obviously, libertarians will balk at equating expense with coercion. There's a big difference between being forced at gunpoint to work and needing to work to pay bills. Yet Nick thinks there's room for honest communication and I agree. Libertarians need to recognize that the economic hegemony of corporations - subsidized by government - crowds out options and alternatives. Liberals need to recognize that losing those options is not the same type of consequence as having your life threatened.

A third objection by liberals was that corporations use state power, but so do us regular citizens - in the form of civil suits, invoking law enforcement, etc. Psychopolitik definitely deals with these issues authoritatively, essentially arguing that those forms of government "privilege" are positively dwarfed by those granted to corporations via regulations, manipulating institutions of government, massive welfare packages, etc. Furthermore, I would raise the point that this apologism for corporate use of government substantially equates corporations with people, resulting in a form of corporate personhood which I find abhorrent and totally incompatible with a free, democratic society. Corporations are not people and neither society nor the State owes them anything. Indeed, corporations are creations of the State and ideally should be as subordinate to the people as the State should. Unfortunately, realizing that goal is our whole problem, no?

To end this on a concilliatory and hopeful not, I heartily suggest both Democrats and libertarians read Unequal Protection by Thom Hartmann. The history of corporations is astounding and outrageous, and it really is necessary to have a common factual base in history and law on this matter (it is a dense topic). There's simply no other way to navigate the threshold between business and politics that has driven the past century.

Even though Hartmann's epilogue suggests a patently progressive regulatory approach to corporations (which I reject; see this and this), his call to repeal corporate personhood and certain other privileges is in direct parallel with the libertarian agenda. Even with the smarmy communitarianism he exhibits I found the book compelling, so I'd imagine your garden variety liberal would as well. And libertarians can draw their own conclusions without buying into Hartmann's activism.

One thing is clear from all this: I owe Ferree a couple of beers for his hard work in promoting discussion!

UPDATE: Kevin Carson invokes the "vulgar liberal" label on the Kossacks:

The problem is not unequal enforcement of the laws. The problem is unequal laws. The goo-goo myth that government regulation is idealistically motivated, in order to protect us from the big bad corporations, is the work of court historians; and the people who repeat those myths are useful idiots for big business. The fucking laws were written by big corporations. Hell, if you look at the interlocking elites that have run the state and the large corporations since the large corporation first came into existence, the large corporations are the government, in the same way the big landowners were the government under feudalism. The state is, as libertarians say, the ruling class; but conversely, the ruling class is the state.
Written on Thursday, October 12, 2006