In
a free market it is consumers, not corporate managers or politicians, who
allocate resources and reward and punish business behavior. Failing business people are strongly
motivated by personal loss of income to adapt their behavior to the preferences
of the marketplace. Consumers
"discipline" businesses, and business people accept and respond positively to
the discipline or they suffer the consequences of business failure and personal
financial ruin.
People
succumb to temptation. Billions of
dollars of corporate revenues that make possible 10s of millions of dollars of employee
"bonuses' proves to be irresistible temptation. Human nature responds to circumstances and opportunity and
discipline. This is what drives
individuals to work and innovate and prosper in Adam Smith's free market. Small business owners personally
receive the business's sales revenues which, after paying workers and suppliers
and expenses and taxes, become the owner's personal income. There are no vast pools of other
people's money laying around to take as "bonuses".
Corporatism
concentrates access to and control over enormous amounts of money and power in the
hands of managers who are supposed to allocate according to the long term good
of the collective. But in the
first place, managed economies are notoriously prone to expensive error because
managers cannot predict the future, and big moves in the wrong direction are
far more costly for the economy than are a small business's small scale
personal follies.
And
in the second place human nature drives managers to take the money for
themselves, because it is right there, and they figure out ways to "justify'
their taking it. Any "market
theory" that fails to acknowledge these intellectual and moral failings of
human nature is fantasy if it is naive ignorance; or it is deception if it is
preached knowingly. We know very
well what behaviors and consequences will be generated by "deregulating"
corporatized markets, because we are currently looking at those criminogenic behaviors
and suffering those collapsing economy consequences.
Partisans
enjoy constitutional freedom to preach "free markets" when markets are
decidedly not free, but believing that these mega-companies are working in a
free market is a delusion no different than believing that a comparable size
nation like Venezuela is a free market participant. Everyone recognizes
that Venezuela is large enough and powerful enough to "legislate"
what it allows and doesn't allow within its borders.
This
is the opposite of Adam Smith's free market, where no player is big or powerful
enough to "dictate" what happens within its market. Each
individual enterprise is "subject to" market discipline. None of them is dominant enough to "administer"
discipline.
We
must recognize that gargantuan transnational banks and companies behave more
like independent sovereign nations like Venezuela, not like free market
businesses competing within an economic environment that is "free" of dominance and control
by any human being or legalized collective of human beings. Control by a group of human beings is
called "government", and behemoth corporations do indeed "govern" the
industries and economies and nations within which they operate.
Free
market participants, by contrast, govern only their own personal behavior, and
enjoy or suffer the personal consequences according to the un-coerced choices of
the market's myriad "governors', the consumers. A functioning free market, if such a system can actually
exist in the real human world of greed, ego and power, truly is a form of
economic self-government where individual choices are coordinated into a
functioning "economy" by the workings of the free market's "invisible hand".
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