Corporate power and the cult of bigness

Earlier this week, the Treasury Department published a report discussing the relationship between “the trend of corporate consolidation” and “workers receiving less pay, fewer benefits, and worse conditions.” The report argues that “a market with a small set of employers may mimic a monopsony,” with a few large firms holding too much power over workers.

As the report makes clear, corporations in several key sectors have become too large and powerful, our markets too centralized. But while the report correctly diagnoses the problem and proposes policy changes at the margins, the crisis is a deep, systematic one. Solving it will require that we confront what economist and decentralist pioneer Leopold Kohr called “the cult of bigness.”

Decentralism is based on the idea that for our social, political and economic organizations to work for all people (not only for rich, connected corporations and pressure groups), they must be built from the bottom up, at scales appropriate for human beings. For thousands of centuries, human beings lived together in small groups. Distant, anonymous power was unimaginable and impossible. The industrial and technological developments of the modern age have made it possible to build monolithic institutions wielding an extraordinary and unprecedented amount of coercive social and economic power.

Importantly, this power has never derived from the much-vaunted free market, at least if “free market” stands in for consensual exchanges of the kind that take place in a free, fair environment in which no one can benefit from coercive and anti-social privileges. Such privileges have always defined capitalism as a matter of fact, and they continue to define it today. One of the most remarkable features of prevailing political discourse is the extent to which mainstream opinion-makers on both the right and the left underappreciate the ubiquity of economic privilege. Such privilege defines the global corporate economy and carries enormous social, ecological and economic costs. 

The history of corporate capitalism (and of precursors like mercantile capitalism) is one of the violent monopolization of arable land, the outright theft of valuable natural resources, the subjugation of colonized populations and the coercive preclusion of traditional ways of life.

Both the left and right halves of the political power elite benefit from cynically calling this a free market: The right can shrug off calls for economic justice, because, after all, this is just value-neutral free market competition at work. Corporate liberals can feign thoughtfulness by proposing new top-down public-private partnerships — of exactly the kind that, as a historical matter, created the corporate monoculture that is now strangling workers and devastating the biosphere.

It is important to point out at this juncture that the argument for a decentralized socio-economic ecosystem, grounded in local self-sufficiency and face-to-face community building, is not an argument against trade, global interconnectedness or technology. Decentralists argue that we should promote diversity as a strength and source of resilience within the context of social and economic institutions, just as we promote cultural diversity and viewpoint diversity. To counter the crisis tendencies so presciently identified by Kohr and other influential decentralists such as the great E.F. Schumacher, we need a new way to discuss these issues — a new vocabulary and set of categories.

The needlessly confusing and imprecise language we use to discuss political issues is an obstacle to genuine awareness and understanding, obscuring the most important questions. The ultimate social problem is, in Kohr’s words, “the high-altitude disease of excessive size and uncontrollable proportions.”

Earlier than most, Kohr understood the social, economic and psychological failure modes of modernity’s mammoth institutions. With this clear-eyed analysis, Kohr challenged us to transcend narrow, outmoded ways of thinking about important social and economic issues, seeing both right and left as heedlessly hurtling toward “the abyss of unmanageable proportions.”

The globe-spanning gigantism of the present moment, though it is thought to be efficient, brings with it alienation and social decay, opacity and anonymity, and pervasive unaccountability. This, of course, is the culmination of a trend that begins in earnest only very shortly after agriculture and sedentism supplant lifeways in which people cultivated nothing but themselves. The increasing homogenization of thought and culture under global capitalism carries with it “the risk of falling into destructive error,” as Heidegger said. It is the free, open interplay of human traditions and cultures that humanity needs to navigate the existential challenges ahead.

Historically, small quarters of both the right and the left have homed in on the importance of community, local autonomy and self-sufficiency against the destructive, alienating forces of empire and corporate globalization. They have engaged in spontaneous acts of community, unauthorized and outside both formal government institutions and the corporate market. They were responding directly to their own needs and those of their neighbors.

The most powerful multinational corporations are indeed too big, but they needn’t be (and can’t be) broken up by the state, for it is the state that is the source of their power. Public policy should aim to remove both special treatment and direct subsidies for our corporate behemoths. Governments should devolve power to small and more local bodies, allowing genuine citizen participation in the issues that affect their lives.

Countering the cult of bigness will be no small task; the obsession with growth and centralized power is perhaps the theme of modernity. But it’s exactly what we’ll need to do to prevent widespread poverty and social breakdown.

David S. D’Amato is an attorney, businessman and independent researcher. He is a policy adviser to both the Heartland Institute and the Future of Freedom Foundation.