The De-Humanizing Effect of Mega-Corporations

Lately I have been working on a crew that installs above ground pools. It’s a great summer job for college kids! The other day as we were driving between job sites, a thought occurred to me. There are a great many jobs that exist that are not things anyone would aspire to be.

Think about kids dreaming of what they want to be when they grow up: either something glamorous, like an astronaut or a movie star, or something "noble," like a doctor or a teacher. We can think of lots of other vocations that fit under those categories, and as we get older, we often expand our definitions of these categories and add new ones of "aspired-to" vocations.

Yet there are a number of careers that we would never aspire to. We might end up working in such a career, but never because we set out to do that. We simply fell into it and never got out. Careers like working on an assembly line or as a greeter at Walmart. But why do we consider these to be careers that are undesirable, things we would never set out to do? What makes other careers more honorable, things we would aspire to?

This may be one of the great ironies of capitalism from a philosophical viewpoint. Capitalism begins with the idea of ownership- if we own our own means of production, we are going to work in "creative" ways to promote our livelihood. The idea is that we have a vested interest in our own success, and so we are willing to put forth effort to achieve that success, especially when driven by competition. The theory of capitalism is that individuals driven to succeed will develop new ideas, new means of production, and the most efficient use of resources and thus create the most robust economy. But this theory developed in a day when markets where much smaller and more localized, when the internet and mega-corporations were not even on the horizon. I think in a twist of irony, the progression of capitalist economics, built on the idea of ownership, has in effect destroyed that idea.

Lets say I own a local shoe store. Or that I work for a locally owned shoe store, either will work. I have a vested interest in the success of that store, I have "ownership" by which I mean a stake in its success. So I work to make the store succeed (per capitalist philosophy). But lets paint a different scenario. I work in the shoe department at Walmart. I find it hard to argue that I actually have any stake in the success of this store. The store is simply too big for me to make an impact anymore. If I do poorly, I loose my job and the store moves on, not even feeling a bump in its progress from my failure. Even if the particular store I work for does fail and close, the corporation is so large it will hardly notice. Likewise, if it does well I cannot claim any sort of responsibility for that really. My contribution is simply insignificant. So the concept of ownership is completely meaningless in this scenario. I don't have a stake here, I am just a meaningless "tool" in the eyes of the corporation.

In both scenarios, we might argue that I have a concern for my own personal success, but I think in each case this means something completely different. In the first, my personal success and the success of my business go hand in hand. So things like efficiency and competitiveness and ingenuity will mark both. In the second scenario, however, my personal success is something completely different from the success of the company I work for. My personal success becomes a matter of mere survival- do I still have a means of sustenance?

This is not meant to be a rant against Walmart, by the way. I will admit I am not particularly fond of the place, but I'm not a Walmart-hater.

Here is what I am really getting at- the reason the concept of ownership is so important to capitalist economics is philosophical. Capitalism developed out of enlightenment philosophy, which is particularly humanist. Self-determination is at the heart of the capitalist system. We are more likely to take the initiative in our own lives if we feel we have self-determination, and for capitalism this is derived from the concept of ownership. If we own (or in the case of the worker in the local shop who doesn't actually own it, have a significant stake in) the means of our own success, we will work to bring that success about.

So the loss of the concept of ownership in the wake of corporations too big for the individuals who are part of them to matter is ironic on two levels. First, on a purely economic level it undermines the very foundation of the system that brought these corporations about. But secondly, on a philosophical level, it attacks the self-determinism and humanism of the very philosophy that brought that system about. It in essence erodes the role of individuals as real "humans" in the sense of having control of the shape of their own lives. They are instead merely pawns swept along in the wake of a much larger creature.

Economic Irony?

Let me say at the outset of this that I am not a communist. Keep that in mind, it will be important in a minute.

I spent a good amount of time studying economics before I moved to Birmingham to study theology. I was a pretty strong advocate of the modified classical/monetarist economics employed by the Federal Reserve under Chairman Greenspan and now Bernake. However, the more I have seen about the current economic crisis the more I am questioning the traditional models and ways of viewing economics.

In the classical system, the economy manages itself by money-flow. This is supply and demand at work- if more people demand a good, then more money flows to that market and the supply increases to match the demand. So the greatest way to encourage economic growth is to expand the amount of spending that is going on. This has to be carefully monitored though- we can't just dump money into the system, all that will do is create inflation with little or no growth. To keep this balance, the Fed plays a back and forth game with the money supply by buying and selling bonds to the major banks, thus controlling how much money they have on hand to loan out.

And there lies where the irony begins. Our managing of the economy has been based very largely on the credit industry. We depend on banks to give out loans that stimulate growth. If inflation is getting out of hand, we try and cut back on the amount of loans banks make. If the economy is slowing down, we try to encourage them to make more loans. So our growth is sustained by credit!

What we seem to be realizing now is that this pattern isn't sustainable in the long-run. What has happened in our economy is that we have had a huge "credit bubble" that has collapsed. The bubble was sustained not just by lots of housing loans, but by loans from bank to bank and credit agency to credit agency. Then, to make things really complicated, we turned those loans into "securities" and sold them to other agencies, who bought them using more loans. Now the bubble bursts. My company fails because others can't pay back their loans, which means I can't pay back my loans, which means another company can't pay back theirs, and the cycle goes on. Since all this growth was based on money that no one actually had, the current collapse creates a massive domino effect in the order of a few hundred billion dollars!

So why is this ironic? The very thing that we have been relying on to sustain our economic growth is now the very thing that is causing a massive economic fall-out.

Now, in a sense, that's how a bubble usually works. An industry booms for a while, and then something goes awry and that industry collapses. What makes this especially interesting, though, is that its not a single industry. Its our whole economic system that is being shaken.

Now is where what I said at the beginning is going to be important again. I see basically two options on the "capitalist" system: The first is the classical option- do nothing and let the economy fix itself. The Great Depression is the main counter-example to this method. And, if we did opt for this method, my prediction is the economic collapse would become very wide-spread (remember, this started in the finance sector, which is what the rest of the economy depends on. If it goes, it will take down every other major industry with it), with the end result being a revolution that will probably transform the west into a communist society. In other words, if we do nothing, we will see exactly what Marx predicted come about.

The second option is to try and salvage the economy through a "bail-out" (what we have been doing)- following the New Deal model, in other words. The problem is, in the long run this just perpetuates the problem. This problem exists because our economy is built on credit, which means it can't absorb the shock of a market failure. Dumping more money into the system to try and stimulate more growth is only adding to that problem. So in the long-run, we haven't gotten anywhere. We may temporarily avoid catastrophe, but then we still have the same root problem- an economy built on credit with no shock-absorbers and no way to sustain growth without more credit.

I'm not sure if this second option eventually leads us back into the first. I think that is the worst case-scenario: we get to the point where we literally cannot do anymore, so we have to do nothing. I don't foresee that happening in the major Western powers anytime soon, but there are concerns it might happen (or already be happening) in developing nations that are taking a hit from all of this.

The ultimate solution is going to require some sort of radical change to the underlying economic structure of our system, I think. I'm not sure how we get there (at least without it being a very painful transition). But we have to move away from a dependence on credit and adapt to a more long-term sustainable system. I am not saying we do away with all credit. Credit is important in a lot of ways. People generally buy a house or a car via credit. I (along with most other students I know) am at least partially financing my education through credit. However, what this economic crisis is showing is that we cannot depend on credit, so we have to adapt our system in some way to not be dependent on it (which may mean a fundamental change in the way we manage the economy). What that probably looks like is a much smaller economy on a whole and maybe much more simple life-styles. And for a lot of industries that simply cannot be sustained without credit (for instance, in a lot of ways, the medical industry), there may be a need for socialization.