October 10, 2011

The Eminently Real Free Market (XL): Sketchy Stories (28): The Corporation as “Sociopath” (5)

Toward the end of his fifth sketchy story, Mr. Ferrara declares rather arbitrarily that
Whatever good corporations have done in the relentless pursuit of their own ends is not the result of the corporate form as such, which invites and protects a thousand abuses. (26)
One would think that the corporate pooling of capital bears some causal relationship to the good of higher living standards, itself an effect of the greater productivity that that pooling makes possible. Not a word about that, of course.
The unlimited liability corporation—the sole logical alternative to the LLC Mr. Ferrara reviles—would be formed only rarely, if ever, for few investors would care to put not only their own well-being but also that of their families at risk just because they went into business with others.
Since Mr. Ferrara brought up the topic of abuse, we remind him that the Catholic Church seeks that corporate form of protection so that liability for millstone-meriting abuse committed by some of its officers is confined to corporation assets and does not ensnare every Catholic who ever donated money to Her.
If what bothers Mr. Ferrara is an organizational form that “invites and protects a thousand abuses,” then he should direct his animus against the state as such, whose income stream is predicated on a squishy reading of the Eighth Commandment. The state is a moral hazard, if there ever was one. If one does not like the partnership between the taxing state, which is intrinsically rights-violating, and limited liability corporation, which is only accidentally so, it is not rational to abolish the latter in favor of the former. Or at least we’d like to see an argument for that preference.
Mr. Ferrara should consider that if there were no attractive helm of state for them to influence or seize, all LLCs would be utterly exposed to the rigors of the free market with no Sugar Daddy Fed to bail them out should they fail. There would, for example, be no non-market regulatory burdens and taxes at all, let alone of a magnitude that only the biggest market players can afford to comply with and pay. But if those barriers to market entry were lifted, “expiration dates” on the dominance of those larger firms would begin to materialize on their backsides.
Anarcho-Catholics join Mr. Ferrara in supporting the separation of corporation and state. We part company, however, over the probability of success as long while the state exists. There was never a time when the wealthy and the powerful did not form a symbiotic relationship, with members of each group morphing into members of the other, perverting both into social parasites. If anyone is more hopeful about the future on this score, we’d like to understand their reasons.
People who, like Mr. Ferrara, claim to favor genuinely free markets, as distinct from today’s hampered markets, should join our effort to “hamper the hamperer” and, frankly, phase it out. For as small as it was a century ago (in comparison to today), the Federal Government was not then so small as to be overlooked by the financiers who conspired to form the Federal Reserve System, a story that Mr. Ferrara will tell more or less accurately in his tenth sketch—and then, like the drunk who, sick after ten consecutive cocktails, swears, “That’s it! No more ice for me!,” fails to draw the anti-statist moral therefrom.
If certain large LLCs that benefit from the State are the mainstay of the State, then they will never keep their mitts off it. And they will resist with all their might the formation of any State they do not control. The only remedy, as we see it, is cold turkey: “No more State for you guys . . . ever!”
We must also remember that the State is effectively an LLC—“on steroids,” so to speak: it is a Hellmouth that recognizes no limits to its appetites. In the end, however, it is but a configuration of imperfect men, one which other imperfect men can, and will, disband once they set their mind to it.
Mr. Ferrara closes this section with an hypothesis about the moral breakdown in society, one that cannot wait for the appropriate time and place for hypothetical expression:
The publicly held corporation thus involves the same morally deadly disjunction between “public” and “private” morality exhibited by the secular State of political modernity—the disjunction that underlies the Austro-libertarian “ethics of liberty” and post-Enlightenment.
The corporation and the “free” market, as the Austrians call it, are perfect together. In one sense the “free” market of corporate activity, which has never been without its coercive partner, the secular State, is indeed free: free from all moral constraint, as any viewing of television for a few house will demonstrate with sickening impact. (26-27)
Still in his arbitrary mode, Mr. Ferrara just asserts that that disjunction is “morally deadly” without specifying the fatal ingredient. Perhaps he expects his readers to just nod their heads in unison when he writes this way, and perhaps most of them do as expected. But such throw-away lines come under the microscope here.
Now, there is a sense in which Austro-libertarians deny that disjunction: the moral quality of an action does not depend on whether State personnel engage in it. If A may not steal, then B may not steal, not even if B claims he’s ordained by God to steal. Not even if A and C, and D, and . . . n buy B’s claim to have the right to pick their pockets.
But that is probably not Mr. Ferrara’s point. He says he looks to the limited liability corporation for the source of televised moral degeneracy (among other species). If only agents of the “public”—preferably Catholics—would subject the “private” to moral constraint! But would Catholics get to do the subjecting? (Should they even want to, in the light of Matt. 20:25?) And since that has been tried before, one hopes that Mr. Ferrara would tell us why things would be different the next time. (We charitably assume he does not think the last time left nothing to be desired.)
The non-secular State of yore, after all, the one whose personnel often professed Christ with their lips and betrayed Him with their deeds—no shortage of that discrepancy today!—has at least an ambiguous record on this score. The professedly Christian monarchs and princes of those confessional states may have been restrained in their behavior, but we suspect that their comparative restraint was mostly a function of technological limitations.
Mr. Ferrara does not, at least here, essay an account of the role of philosophical ideas in moral decline, but it is hardly obvious that there is a simple answer to the question of why his late, lamented Christendom fell apart, with the help of both friend and foe. The Protestant revolt? Against what was it in revolt? The scientific revolution? What role did the Church's favoring of mechanism over Aristotelianism and hermeticism play in that episode?
Mr. Ferrara will not go there. He’s content to blame the LLC. Or the Enlightenment. Or greed, as the sign-wielding bipeds near Wall Street bleat. And this is supposed to pass for Catholic social analysis.