From: jcf@world.std.com (Joseph C Fineman)
Subject: Companies & governments (reply to Mike Clark)
Summary: Firms & governments are part of a moral & political continuum.
Keywords: firm, corporation, political theory, freedom
Organization: The World Public Access UNIX, Brookline, MA
Date: Wed, 30 Sep 1992 19:33:15 GMT

Mike:  I have lost your address.  However, it seems appropriate to post
this in any case.

Dear Mike,

>>...In fact,
>>of course, most of the world's work is done in companies of various
>>sizes.  The biggest of these are bigger than most of the world's
>>governments, and their internal governance is neither market nor
>>republic, but something whose table of organization, I dare say, would
>>look a lot like that of the USSR if one stood too far back to tell
>>what alphabet was used.  Nevertheless, in the bizarre taxonomy of
>>right-wing economists they count as "private".
>The important distinction is that they are voluntary.  No one is forced
>to remain employed by any particular company, and no company is forced
>to pay for the services of a person whose services it does not value.
>A remarkable amount of "the world's work" is done by very small 
>corporations and individual professionals; many of these people have
>chosen the effort and potential insecurities of participation in small
>business precisely because, for one reason or another, they found the
>prospect of working for a large corporation undesirable.
>>  I do not mean to say there is no difference.  Not even the largest
>>corporations are totalitarian (or, to use the polite old-fashioned
>>word, _sovereign_).  They have the great moral advantage of a
>>_legitimate exterior_: they can fire people without shooting them.
>>Nevertheless, it can be a bloody pain to get out from under them -- in
>>hard cases, something like going into exile -- and it might well
>>become impossible if the governments were not harassing them.  (I owe
>>this notion to the despised intellectual lightweight J. K. Galbraith,
>>who did sometimes manage to see what was under his nose.)
>Perhaps I begin to understand the despite, as I don't see what you or
>Galbraith mean.  It is certainly the right of a corporation to fire an
>employee; I don't accept that once a corporatin hires a person, they
>owe that person a job in perpetuity.
>I don't understand what you mean by "it can be a bloody pain to get
>out from under them . . .".  Could you clarify this for me?

  The distinction between agreeing to do something & being forced to
do it is of great importance both in morals and in law, but it will
not do as the basis for a whole political philosophy, for two reasons:
like all concepts, it is vague in itself; and it coincides only very
roughly with the distinction between dealing with another contracting
party & dealing with a government.

  *It is vague in itself.*  There is a whole spectrum of
circumstances, some randomly occurring & some manipulated, that may
make people feel (depending on details of their character) that they
have no choice in what to do.  Which such feelings are we to take
seriously?  How much courage is it reasonable to expect of a free
human being?  Were respectable women in the '50s, & are ghetto kids
now, free to refrain from buying fashionable clothes?  If I am in
danger of my life, am I free to reject an offer of aid if the price is
exorbitant?  For a discussion of the difficulties that such questions
raise in the theory of contracts, see Chapter 7 in _Contract as
Promise_ by Charles Fried (Harvard U.P., 1981) -- a highly instructive
& very funny book that I happened on by accident.

  *It is not the same as the distinction between private &
governmental.*  On the one hand, one *may* sometimes escape from a
government, either straighforwardly by emigrating, or less drastically
by taking advantage of conflicts within the government or of the
inefficiency of the police.  On the other hand, the price one has to
pay for quitting one's job or behaving so as to risk getting fired may
be so high as to amount to duress.  That has never been so for me, &
perhaps not for you either.  But what about someone my age (54) with a
family to support, and a pension she can't take with her?  Is she
really free to quit, say, to defend her freedom of speech, or to avoid
complicity in a dishonorable decision by a superior?

  That such tragedies are not of unbearable frequency in the real
world is due in large part to (what Galbraith would call) the
*countervailing power* of other institutions such as labor unions and
(especially) government, which are no doubt themselves cruel & stupid,
but are useful in counteracting the cruelty & stupidity of
corporations.  The government, for example, limits our freedom of
contract in that we may not sell ourselves into slavery or even
indenture ourselves (except to the government itself, by enlisting in
the armed forces).  Such a contract might be highly profitable to both
parties in many cases, but it is against public policy -- I dare say
because it would lead to the accumulation of explosive quantities of
misery in the long run.  Likewise, if an employee of IBM may credibly
threaten to work for some other computer company, that is because the
Justice Department has seen to it that there are other computer
companies to work for.

  Companies, if allowed to, also engage in economic & social planning
that, if undertaken by government, would be called socialistic.  For
example, banks used to protect the ruling class in their areas by
refusing to extend credit to businesses that threatened the current
balance of power.  Railroads, in the days of their monopoly, used to
be able to gauge their customers' business prospects better than the
customers themselves could, and would adjust their rates to stabilize
the profits of each customer.  (One learns such facts by reading
novels, not economics books.)

  In short, the difference between companies and governments is one of
degree or scale, and has only symbolic moral content.  In the words of
one critic, whose name I am sorry to say I neglected to note down,
companies are pieces of government that got away.  Among the things
they have gotten away from are (1) a modicum of democratic control &
(2) scrutiny of their officers' moral competence in the press.
Nevertheless, experience has shown that it is wise to put up with
them, because they create wealth and, by constituting centers of
independent power, keep the government from getting too uppity.  Like
government itself, and fire, and some other things in life, they are
too useful to do without, and too dangerous ever to trust.

	Joe Fineman, jcf@world.std.com

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