A Libertarian Critique of Corporations

[Editor's note: Wright sent out the following commentary via e-mail October 31. It is reproduced here with permission. It is part of a broader debate with Gaar Potter and others over corporations. On November 1, Steve Gresh sent out a reply pointing out that "corporation" carries with it two distinct meanings: one a government-created entity, the other any voluntary association of people. Wright here criticizes corporations as understood by the first definition. -- Ari Armstrong]

Many folks reading this may findÊitÊunsettling, but THERE IS something inherently evil about corporations. Mainly, that they are anti-human. Remember the corporation is a government creation. And since the Corporations Acts first started passing into law, little more than a century ago,Êcorporations have more and more become the agents of control, regulationÊand taxation of the populace for the government.

One might confuse "corporation" with capitalism and the free market. There is no evil in capitalism and the free market. However, government has turned corporations into parodies of their own failings through regulation and legislative manipulation.

My firm has consulted and contracted with about half of the Fortune 50 firms in the country in the last ten years. In the centralized bureaucracy and corporate behaviors I have witnessed, I see little to admire and much to disdain. That is whyÊI have taken the firm out of that business and into an entirely new arena. The entities we now see in daily life as the "engines of capitalism" are reallyÊmockeries and faint whispers of real free market companies.

Companies were originally shackled with more and more control because of the bad behavior of a few. And that was more due to ineffective and bought-off court and legislative processes,Êfailing to enforce existing laws in specificÊcases, than any inherent flaw inÊcapitalism or the free market. (See the Myth of the Robber-Baron era). However, since government has become the controlling entity of corporate behavior, from the way they hire their employees, collect and account for their income andÊtaxes, pay their wages, sell their products,Êbuilding their factories --ÊtoÊany one of a thousand ways corporations are government managed---Êthese entities have completely become creatures of the state. Yes, most large corporations have become inherently evil. And howÊdo they do to respondÊto this stranglehold? Spend billions lobbying government for special favors and exemptions from that holdÊwhile being has deceptive as they can in complying with laws that effect their profit. ThatÊbreeds corrupt behavior both inside and outside the company. Executives are trained to deceive their governmentÊmasters, their stockholdersÊ(their true masters), their employees and themselves. The larger they become the more their behavior mimics government,Êmany timesÊto the detriment of individual citizens. It is now a symbiotic relationship and it is evil.

If they try and break free, such as Stanley Tool and others who are forming overseas entities to shield themselves from onerous taxes and control, they are attacked by the government and a propagandized populace of ignorant stooges.

We are proposing an entirely new business modelÊto break this cycle. We call it the "distributed corporation," now made possible by the Internet and the new rules of global commerce. It willÊinsure the long termÊdemise of government globally. For what is government anymore but a huge corporate controller?ÊÊThe FDA, FCC, FTC, FDIC, FRB, USDA, FAA, HUD, OSHA -there are literally dozens in the alphabet soup that contol business. Through the control of business,Êthey control us.

Walter Wriston, former chairman of CitiCorp, predicted that demiseÊbeginning in 1992. HeÊforesawÊand predicted the demise of his own company. StrangeÊhow Citigroup is now a central figure in the Enron debacle. He was the catalyst for a change in my thinking. My business partners and I are now working onÊa completely decentralized,Êfree market industrial commerce model for the global community in the 21st century. I would be happy to share it with you offline or withÊanyone else that is interested.

We are getting very close to finishing the complete business plan template and building the software to enable its function. We are raising capital as necessary. Retaining private control is of principal importance. We are working with companies in Europe and Asia as well as North America to make this happen. It's in the nascent stage right now, but in 20 years companies will have adopted this model orÊlikelyÊgo by the wayside.

The large corporate structure is already breaking up in front of our eyes and most don't realize it. The dinosaurs are dying, that is why they are recombining in so many different forms trying to find one that works. However, they are not changing the essential paradigm of the centralized bureaucracy, budgetingÊand accounting that responds directly to government initiative. That is their death knell.

Look to the Japanese. They are ahead of us in the "dying" process due to their homogeneity and higher level of symbiosis between government and corporations. Their current deflationary cycle will lead the way to the bottom. The "public" company in its current form will soonÊbe dead. In some respects, if you pay close attention, government is helping this process along. Soon it will not be advantageous to be a "public" company at all. It just takes a little time to sort out the chaff........

The creative destruction of the overall market will force companies to adopt a busniess model similar to oursÊor die. New companies will adopt it at the outset and outgrow their competitors by leaps and bounds.