September 28, 2011

The Eminently Real Free Market (XXXVII): Sketchy Stories (25): The Corporation as “Sociopath” (2)


No sooner does Mr. Ferrara acknowledge that the “very existence” of multinational corporations “would be impossible without government support” (25-26)—which inspires an anarchistic thought or two—than he reveals his grasp of economics by declaring that corporations
do not passively abide by “market forces.” Rather, they direct them with State assistance. (26)
It is hard to know what to make of this. He is saying either that there are market forces that corporations can and do direct as, say, a cop directs traffic; or that corporations direct only so-called “market forces,” which strips the assertion of content and interest.  But which does he mean?
Of course, market forces—shorthand for “the totality of trades being made right now, followed by the totality of trades to be made immediately thereafter, etc.”—are beyond the ken of human beings, whether organized as governments or corporations, to direct.
Perhaps he meant to write that market players are not above trying to influence market events in the short term (often foolishly unmindful of the consequences). That is, they seek advantages over the rivals in the market that have nothing to do with improving the intrinsic appeal of their products or services, whether by way of higher quality or lower price. They may, for example, seek to restrict supply or entry into a market “with State assistance.” 
(Sort of the way the Church can influence, and historically sometimes has influenced, the religious choices of its citizens “with State assistance.” The Catholic confessional state of Mr. Ferrara’s longing can’t actually direct such behavior, but it can influence it.)
But Mr. Ferrara didn’t say the corporations with State assistance seek to influence markets. He said they direct them.
To Be Continued