Friday, September 03, 2004

Large Corporations: Bad. But what are we going to do about them?

I just got back from seeing The Corporation. It’s a documentary that looks at the birth and growth of the corporation and its effect on society and the environment. Have to say that it is one of the best documentaries that I have ever seen and a very scary one at that. Couple of the scenes were very disturbing. Especially the one where a commodities trader said that the first thing that came to his mind on seeing the two towers fall was that the price of gold was going to go up….”Every devastation leads to profit”. Also the fact that Corporations were allowed to be viewed as a legal person came about due to the amendment in the constitution to help black slaves was mind boggling.

The movie got me thinking again about if big corporations are really bad, what can we do to fight them? Should I be even working for one? Many people say that we should start supporting the small corporations out there. But I am not sure that is the right solution. Take Microsoft for example. When they first started as a small company doing contract work for IBM, they poked them in the eye by getting IBM to license their OS rather than selling it to them. I am sure everybody was cheering little Microsoft on as they beat out Big Blue. And look what at Microsoft has become! In recent years there has been a swell of goodwill towards Linux. RedHat is one of the major Linux distributions out there and was once the apple in the eyes of Microsoft haters. Today they are slowly becoming the “Microsoft” in the Linux community.

The other thing is that if you are going to support anyone, it means that you are going to help them to grow. If they grow, there is a good chance that they will become another big bad corporate monster. Or are we going to tell them we will support you only if there is a cap to your growth. That means that you are stifling potential and giving incentive to people to not do their best.

Is there any solution to keeping big companies in check? In some scenarios like operating systems the removal of a monopoly will solve the problem. The companies will keep each other in line. But in others this will not be enough. I don't think that there is an all encompassing solution to this but the bottom line is that I don’t want corporations out there making decisions on what my life and environment should look like.

As I work for a big corporation I felt that it was imperative to ask myself the question because in many situations asking the question is more important than the answer itself.


Mudra Rakshasa said...


It is just the nature of things to start small and grow big. As they grow they morph into something very different from what they started out to be.

Am I defending large corporations? No, I am not. But, they are a reality, and we cannot just wish them away.

Corporations are to the world today, what empires were until recent human history. But one day, I think, even they will become obsolete -- Their place taken by some new bogey man

As for the price of gold going up in the wake of a disaster, it is not necessarily symptomatic of a bad strain in corporations or even society.

In the wake of disasters and calamities, people rush to seek safety - gold, sovereign debt - anything that suggests safety to themselves and their future.

The trader who thought about the spike in gold, has the market's reactions hardwired into him and he was just reacting to his market.

My thought, as I saw the second plane hit Tower 2 was "shit... the dollar is going to get screwed!" And sure enough, it did.

It was only as I saw people fall out of the burning buildings that the issue became more immediate.

-Mudra Rakshasa

EnJay said...

Big is Strong, most of the time atleast. And we're alwayz going to have corporations/companies. And assuming thet big ones go out, and it's small that's in, even then tehre'll be one or a couple that's above the others, or in all probability, a community of small corporations will be formed, which will in the end amount to a big corporation of sorts. So, back to aquare one.

Is there a solution? I don't think so.
What can we do? I don't know.

Aslan said...

Lovely post.. set me thinking. Yes, the situation looks pretty bleak. But thats the way the cookie crumbles.. The world is getting nastier by the day. Kali Yuga...

sambar42 said...

The way I see it, the economic landscape is basically a Darwinian model. You have different species (companies) and those that are best suited survive and prosper. And ideally, there is some kind of balance that is established.

The problem is when a certain species starts becoming too powerful and really upsets the balance. Just like what the humans are doing. We have managed to destroy all our big predators, are overcoming diseases and are largely insulated from nature. And, we are really screwing over nature by our sheer numbers.

I think that a monopoly is exactly like that. They only seek survival. When they are small, it's all right because they try to survive by being better than the competition. When they get big enough to be a monopoly they try to keep going by suffocating the opposition. By itself, it wouldnt be a bad thing, but for the fact that innovation suffers. For instance, if the oil companies werent so huge, I am sure there would be more money spent on researching alternative energy sources.

One possible solution is for some sort of regulation that says that each company can have only so much percentage of the market, maximum. If they grow larger, break the company up into parts (didnt something like this happen with AT&T and the Baby Bells?).

It sounds like that is punishing excellence, but I think that after a company grows beyond a certain limit, they are growing more because of their sheer muscle rather than because they are actually providing value (the classic example being MS and Netscape).

yesbob said...

corporations, relegions, countries , teams ....

large groups of people moving in step with a central philosophy they may not fully understand ....

these are the next steps in evolution ... these be the beasts of today