30. Corporation: Delegated Socialism



Corporation: Delegated Socialism

Bob Komives
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I ask you to think back to when the Soviet Union had the archetypal large communist government and good-old Ford Motor Company was the archetypal large corporation. Though they symbolized competing ideologies, these large organizations were in many ways similar.

When it dealt with countries in a peaceful interchange of wealth, the Soviet Union competed and cooperated in many of the same ways that Ford Motor Company competed and cooperated with other businesses. At their edges they both competed with corporations, individuals, partnerships, and governments that sold similar goods and services, that wanted the same resources, and that recruited similar personnel. The marketplace determined the price they would pay or receive. At their edges, then, looking outward, capitalist corporation and communist country practice marketplace.

When Ford Motor Company looked inward to its own resources, it acted--and still acts--very much like the old Soviet Union. Executives allocated resources under policy set by a central committee or board of directors. Executives and board lead in the directions that they believe will most benefit their constituents--whether shareholder or proletariat. At their centers, looking inward, both capitalist corporation and communist country practice socialism.

The United States of America operates the same way. When we look inward, we set communal rules for wealth distribution, be they liberal or conservative. Our country allows more internal marketplaces than either the good-old Soviet Union or good-old Ford Motor Company. However, "allows" is the important word. Communally we create, enforce, and administer rules that foster and allow private marketplaces. Without communal enterprise private enterprise could not work.
Ford Motor Company would not allow the level of internal property and private enterprise allowed in U.S. America, or even the old Soviet Union. The very purpose for incorporation is to socialize risk among investors. Corporations require public charters. They seek such charters because a charter will protect their investors. Individual liability is allowed by charter to be socialized into corporate liability. Individuals can profit and recover their investment severalfold, but their liability for loss cannot exceed onefold -their investment.

Corporate employees experience socialism. Until hired, a job candidate at Ford Motor Company is an independent competitor-cooperator for the corporation to bargain with at its edge. Corporate resources and individual talents get weighed and bargained. Ford Motor Company can reject the applicant or make an offer. The applicant can accept, reject, or haggle over the offer. Once hired, however, she becomes an employee. Ford Motor Company tells her what to do and limits her discretion in making decisions. She is expected to work for the common good, which she hopes coincides with her own. Ford Motor Company pays her the same for Tuesday as for Wednesday, no matter her production on each day. Even if the company offers pay incentives or lavish bonuses based on her performance, higher officers of the corporation set the incentives. Ford Motor Company also supplies her work space and the tools of her trade. This would not be the case if somehow her employment were marketplace based rather than communally based. Her promotions would come from her own success at marketing her talents or products to several buyers. Her status today would not ensure tomorrow's employment.

In the corporation the employee is likely to strive to maintain her secure employment and climb the corporate ladder. Among those who wish to climb that ladder, competition is fierce, but promotions and salary increases come from corporate decision makers above. There are rules that govern job security and procedures which define the role of each worker. The corporate authority structure distributes corporate wealth among workers and share holders. Authority figures also decide whose ideas will carry the greatest weight. Corporations tend to prefer employees who accept this system rather than collective bargaining or individualism. This top-down decision and wealth distribution structure mimics family tradition, socialist tradition.

None of this is bad. We should expect a private corporation, like any organization, to be socialist at its core. What is bad and misleading is to champion corporations as the epitome of free enterprise. They are not. They epitomize delegated socialism -a societal attempt to organize centers of socialism where free enterprise or national enterprise might do poorly. If we have reason to look for the epitome of free enterprise, we do better to look among industrious individuals, sole proprietors and partnerships that owe less of their existence to delegated socialism.


:: Bob Komives, Fort Collins © 2006 :: Plum Local IV :: 30. Corporation: Delegated Socialism ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

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