Modern business tends to work toward ever-bigger companies in a paradigm I always refer to as “big fish, little fish”. Smaller companies are eaten up by bigger companies in what seems like a trend ever upward, expanding both the size and the scope of companies until eventually the world will be just one big Wal-Mart, or until we get in mires like the “too big to fail” phenomenon confronting banks.

I've written about this trend before in my article Rethinking Mega-Corporations, but I recently had a thought on this that has got me wondering and I thought I'd share it.

The myth is that Republicans are the ones who defend all this big business corporatism. Certainly it's often true. And likewise the Republican party tends to be a big supporter of States' Rights

A Move away from Individual Control

I have always thought the core value behind States' Rights was the notion that the farther one gets from the common man, the harder it is to have an appropriate vision of what needs to be done. Local government is better than non-local government, personal autonomy is better than government control, and that kind of thing.

The movie Rollerball made the prediction that at some point the “big corporations” would come to be the only thing that mattered in the world and that nation states would become irrelevant. There's some evidence this is happening or has already happened. Certainly the effect of lobbying dollars on the US government is formidable, a probable consequence of the controversial US Supreme Court ruling Buckley v. Valeo.

And even ignoring the effect on citizens outside the company, it's clear that within the context of a company, the leadership controls, in a relatively dictatorial way actually, the operation of the company. As I understand it, the theory in business that says that dictatorship is acceptable here relies on the notion that if things go badly, the stock price will fall or the company will fail and the leader will not last long. And yet, there are many counterexamples, not the least of which is that pesky “too big to fail” scenario where those who have run companies aground have been well compensated for doing so.

A Dissonance among the Paradigms

I don't raise the issue of who controls power in business with the intent of joining the large public fuss about overpaid CEOs or anything like that—not today, anyway. Rather, I raise it to make the simple observation that employees of a company have really very little say in who runs their company, presumably far less than voters in a democracy have about who runs their nation, and yet the Republican political platform apparently wholeheartedly endorses the notion of these commercial dictatorships as not only acceptable but optimal. The more big business, the better. Any talk of businesses being too big seems to bring ire from every corner of the business community that anyone would dare suggest that “too much” was bad.

I hear them say, in effect, that businesses must be allowed to grow and grow if the market demands it, and who are we—mere mortals—to question it? I hear the justification being that there are efficiencies of scale that can only be achieved in big businesses, and isn't that our ultimate goal? The best product at the cheapest cost.

And yet as the federal government grows, they don't say this. Maybe that's not an argument for bigger government, maybe it's an argument for smaller companies. Please don't take my argument here as automatically implying I'm pushing big government. I'm just trying to reconcile the dissonance between these two positions.

I hear business folks saying that government is special because it doesn't make things. It's just a leech that sucks the life out of companies, which are the sole supplier of good in the world, or so I'm led to believe.

Please note that when health care is not converging on a cheapest possible commodity price but is in fact becoming a leech that sucks, quite literally, the life out of the citizenry, this is a little hard to take. An please note as well that there are companies that make junk that, while the market will bear it and even dive wholeheartedly into its purchase, are quite clearly bad for society. Are all products that way? No. Is there a mechanism for judging one better than another in some definitive way? No. But don't confuse the fact that it's hard to discern which companies are operating in favor of society with a claim that all companies are operating for the good of society or that all effects of companies are good.

Certainly we must be able to say that there are companies that do not do well by the general populace, either because they pollute, or they cut corners in quality, or they enable behaviors or promote values that either immediately or ultimately do not serve the people. In sum, business is not a source of universal good and government is not a source of universal bad. Each bears watching.

Sanity Checking the Status Quo

And so back to my question: Why is it that big government is bad and big companies are good? Why not the other way around? Why not both bad? Why not both good?

Are we just lucky for the accident of history that the notion of States' Rights. was codified, to some degree, into the Constitution? Had it not been, and if someone raised it now for discussion, would the matter be laughable or does it have some texture and substance that exists and has credence beyond the force of law. Is it a moral principle with general validity, in other words?

If there is a philosophical basis for States' Rights that extends beyond the legal, to what degree is it worth asking whether it has a place in business? Is it our ultimate fate when we're all just working for Wal-Mart, that whatever Wal-Mart says will be how things are done? Doesn't big business herald the death not only of customer choice but of employee choice just as surely as trends toward federal control brings an end to being able to settle in a venue where you like the local laws because they are different than the laws elsewhere? If one is good, why not the other? If one is bad, why not the other?

To some degree, antitrust law is intended to address this issue in the business world. But my understanding is that government has backed off from doing much enforcement of that. The alleged reason, as far as I can tell, is that often monopolies result in decent prices and so if nothing is broken (by this perhaps overly simplistic metric), why fix it? I'm dubious that the present hands-off attitude toward antitrust is a good one.

And what if government is providing value (like decent, affordable health care) and industry is not? Is the basis for believing that government must not grow large still true? Or are there perhaps economies of scale that only a government can address? Many think there are. Viewed this way, the size of taxes needed to support this becomes less relevant, since a true service, something of intrinsic value, is being achieved. Of course, maybe they're overcharging a few who can afford to pay more and undercharging a few who can afford to pay less. That sounds like the kind of thing antitrust legislation was intended to handle in business. Maybe we need that in government, too. But then, if the trend in government went like it did in business, we'd want to ignore such protections because a greater good was served, wouldn't we?

I don't have a prescriptive message here, just food for thought. We tend to work out solutions and sometime even whole philosophies that are specialized to a situation and not ask ourselves whether there are other domains in which we can apply those same concepts. In this case, society seems to have latched onto very different paradigms for two kinds of entities that seem structurally very similar to me, and weirdly enough the very same people often use what seem to me outright conflicting arguments to justify them.

I'd like to believe their motive wasn't just to grab the easiest argument at hand in order to get what they selfishly want, though some will probably suggest that as the answer. Perhaps the issue is that they just never thought of these things as being related. But whatever the case, I thought I'd open the matter for discussion.

Why is big business good and big government bad? Why is everything business cranks out in response to markets defended as “what the market wants” and yet everything government cranks out not defended on that same basis (“what the citizens want”)? Commerce speaks of value and politicians of values, but aren't they both just selling stuff? Why is the treatment of these very similar things so very different?