An alternative theory posits that these massive corporations in fact depend upon the centralization of governmental regulatory and fiscal powers for their very existence. Regulatory capture is much easier to pull off when there’s only one central authority that needs to be captured.
This sort of claim seems to me fundamentally rooted in some specific ideas about large human organizations, specifically of the governmental kind. One of the key ideas it requires to be true is that the corruption endemic to small-scale institutions (think your local mayor, perhaps (depending on your state) even your governor) will automatically apply to much larger scale institutions (such as those administered by the federal government).
I'm not going to deny that this could be true - it clearly could. But the change in scale, the change in mechanisms of influence that are required, the change in the possible side-effects of such corruption being uncovered ... these all point in the opposite direction, in my opinion.
Amazon and Walmart are not the victors in a game of regulatory capture. They are the beneficiaries of the election of senators, representatives, presidents and the appointments of judges who explicitly do not believe in much regulation. Even so, they are subject to more oversight than one of my local ranching families in NM, who can get a (former) governor to re-route millions of dollars in state & federal funding to a road they would prefer.
As the organization increases, you are more likely to find people who can band together to collude to corrupt some small corner of it. Number of corrupt candidates increases, number required does not.
Amazon only needs to lobby one federal legislature’s members and only need to battle one federal regulatory body. If all of the power were at the state levels, it would have to scale that up 50x.
Example: greed.
There is such a thing as unorganized corruption. Example, in lots of third world countries where their infrastructure and systems are so bad it breeds corruption. No need for a top down version of it.
Yes, I agree that you can see examples in some parts of the world and in some time periods (including today) where even uncoordinate corruption is very damaging to a society. But - and this is important given the context in which I started talking about this - it does not appear to be a pathway to regulatory capture nor the formation of giant corporations in the sense that was proposed up-thread, in which a powerful "federal" organization is used to enable such organizations to exist.
Greed won't direct an organization in a unified direction, but that just exposes a vulnerability where an outside party can exploit the greed at an individual level to direct the organization in a unified direction of its choosing.
But yes in the context in which you have laid down you are correct I believe.
No such thing is required beyond the common stance of 'venal self-interest' regardless of organizational mandate. Without checks and balances (and penalties) you can get a loosely coupled "corruption" at all levels with little effort.
One answer here is a huge number of small governments. At the level of one for each largeish city, to make lobbying spend prohibitively high. That sort-of works, in that it creates incredible amounts of friction. It, however, also hobbles trade and innovation to an incredible degree.
I don't see that as a good answer. Neither, I think, is one humongous centralized government - while it has the resources to outspend corporations, it concentrates inordinate power in a small number of hands. And if you're willing to assume that corporations will use money to solve problems (because that's kind of their whole point), there's a very small step from there to just buying a sufficient set of politicians.
You need regulations somewhat unified to enable commerce at anywhere close to the level the world currently experiences. You need a decentralized system to deal with power concentration. This is an inherent tension that I can't see how to resolve in the face of corporations that are essentially the peers of nation states.
Very well said
I don't see what evidence there is of that. How does Walmart (specifically, since it was mentioned) benefit from federal government regulations in a way that gives them an advantage over other brick and mortars?
Is bigger government more able to do this? It already has the power it needs -- the legislature can outlaw undesirable corporate behaviors, the justice department can pursue litigation (including antitrust litigation), and federal courts can rule against unlawful behavior by these companies. I don't see how bigger further enables any of these goals.
The problem I see is that lobbying and corporate hobnobbing with government elites in Washington creates a friendship and unity between corporate elites and government that ought not to exist. (Exhibit A: Ajit Pai)
A merely bigger government concentrates unjust power at the top: power to dictate more of our lives and increase bureaucracy, not power to enact justice and protect liberty.
We need a better government, not a bigger one -- a government that enforces justice without corporate favoritism, enacts the will of the people through representation, and upholds and protects the US constitution.
Replace taxes with permission to pollute, or worker rights, or other regulations, if you don't see a problem with tax competition. The point is that competition in practice reduces the sovereignty of the population of smaller government units.
"The problem with corruption, inefficiency and stupidity in government is corruption, inefficieny and stupidity, not government."
Governments have the monopoly on the use of legitimate force on their territory (and the means that go with it). Isn't that enough heft to go after any corporation?
Could you elucidate what you mean by "heft"? Sometimes I think people want a feeling of power over them (or others) without a clear sense of the mechanism or implications of that power.
It could be any of:
- more taxes
- more government employees
- more laws
- more law enforcement
- more bureaucracy
- more regulations
- more enforcement of regulations
- more military power
- more domestic espionage
- more foreign espionage
- martial law
- less democracy
Some of the most efficient governments in the world also lack proper separation and limitation of powers, which degrades personal freedom. Democracy that leads to freedom is an extraordinarily tough balancing act; early US founders recognized that and publicly called on almighty God to help and aid them in their efforts.
(On reflection, what’s interesting about my question here is how it’s simultaneously metaphorical and literal through absolutely no effort of mine. The idea itself made that happen, rather oddly.)
What if the inefficiency, corruption and stupidity is due to the very nature of government?
So to answer the question of "who deals with the titans" the answer is "the federal government, but they do so because they are beholden to state and local governments/institutions/elites."
I'm not sure I see a path from where we are to making federal representatives more responsible to state institutions (my repeal the 17th amendment campaign never having gained much traction), but it doesn't mean it doesn't exist.
The distrust of large national institutions is, IMO, a result of more than a century (or two!) worth of campaigning by the capital class to try to limit the belief in the virtues of the federal government. I consider the mere existence of this campaign (both overt and covert) to be another piece of evidence that the capital class regard the power of a strong federal government as a threat to their wealth and power. I also find it notable that I never hear anyone arguing for a stronger state government, but not odd because it fits with the general theme: rich people should be left alone to do whatever they want with the assets they control.
I've said many times here on HN that back in the 1960s there was widespread interest in a part of what was then called "operations research" that focused on how to improve the behavior of large human organizations whether they were governments or private. Sadly, that interest faded, and now we just accept private organizational malfunction without saying much, and government organizational malfunction by repeating conservative, "small government" tropes.
Living in the south it's very apparent that a weak federal government was a bad thing. Civil rights have to be mandated top down, history is the proof.
And I believe there is still sufficient party interest and government design to protect "state's rights". Most federal programs are state/municipality implemented. Sure, the feds might stick rules to how money can be used, in order to prevent abuse, but that's a good thing.
Maybe reframe that to be federal constitution and courts.
What does this mean? Could a state not pass laws and then force Walmart to comply with those laws while operating inside the state?
Do you think individual US states wouldn't be able to organize like that?
Isn't that what a federal government is?
for example, state AGs band together in such a process pretty frequently.
I'm unclear as to why you're implying that the EU doesn't fit this definition, because the EU can be literally described under those terms.
as for litigation, i thought it was the individual member states that were suing Big Tech. i thought the only role the EU itself played here was that of explicitly stating the conditions under which members can do such things.
The tough part is that additional laws restricting actions tend to interfere with the laws preserving freedoms. So the two tend to be at odds with each other and result in circuitous and controversial judicial reasoning to determine if the restriction violates a right or freedom.
Why not? You can’t ban a specific company from operating but if you want them to act or stop acting in a certain way pass a law. If Australia can make Amazon pay Goods and Services Tax so can any of the states. Oh wait, they did that already.
If they want to target a specific company for actions or inactions that are not generally illegal they can amend the constitution to make bills of attainder legal.
Because the value of a large company, rich in either jobs or donatable cash or both, is too significant to most states to risk losing, and going up against them does risk that loss.
By contrast, large US-founded companies are extremely unlikely to quit operating in the USA if the federal government takes actions they do not like.
I'm theoretically in favor of this, but ... one of the reasons we need a bigger, more powerful federal government is to have a governmental entity that can take on the massively more powerful private entities (corporations) that exist. No state government can take on Walmart or Amazon. The federal government can (or could, if it chose to).
If you weaken the power of the federal government (which ironically is what i interpret "increased federalism and localism" to mean), who deals with the titans?