The Problem of Creeping Corporatism

Posted on 03/02/2011 by


Wayne Allyn Root, Former Libertarian Vice Presidential Nominee and Chairman, Libertarian National Congressional Committee, wrote in a blogpost from 3 February:

The media has done it again. As usual, they’ve presented, the wrong message to the American people about the Egyptian crisis…

The media has chosen to sell the storyline told by the rioters and anarchists in the streets. They have chosen to interview only one side, those participating in these protests. But is that representative of the true storyline? Is there another side to the story? Of course there is.

I just got off the phone with a longtime friend- a successful Egyptian business leader. He believes that several hundred thousand people in the streets do not represent the 80 million citizens of Egypt. They represent anarchists, communists, and Islamic extremists- all with an agenda and axe to grind. He says if you polled the people of Egypt today, the majority would support Mubarak. He says that the backbone of Egypt- the business owners, small business community, and middle class still support Mubarak and the military. …

My friend asked a simple, but powerful question. “If several hundred thousand people rioted on the streets of New York and demanded Obama be removed, would that represent all of America’s three hundred million citizens? Would the media report this meant the end of the Obama regime?”

As a recovered former Libertarian, I find this stance disturbing, to say the least. At its heart, Libertarianism is very simple: it holds that the government’s business is to stay the heck away from the people’s business. To paraphrase Gilbert Chesterton, I liked Libertarianism because it is simple; I no longer like it, because it is too simple.

“Business”, in the good old days, did indeed mean what Mr Root quoted his Egyptian friend: “business” was sole-proprietors running store-front, craft-based shops. This is the economic model which Libertarianism was designed to defend, and it is the economic system which I support as well.

This is also a form of business which is economically extinct, or critically endangered at best. Instead, what really controls the economic system are corporations. These are creatures of a completely different stripe: they are not individuals acting in their economic self-interest for the good of their community. They are, rather, vast and faceless bureaucracies which command resources comparable to governments. They have ministers, private armies, intelligence programmes, perception management divisions; they take part in military invasions, economic warfare, and information control.

Here is the vast and mostly unremarked flaw of (non-Left) Libertarianism: because people are involved in corporations, well, the government’s business should be staying the heck out of corporate business, too!

There is no consideration given to the world of difference between corporations and sole-proprietors. To put it grandly, the mom-and-pop grocery store did not ‘retaliate’ against the EU because France didn’t like GM crops. Nor did the kindly family running the corner gas station infiltrate the Nigerian government for the purpose of ensuring their profit margin.

Rather, it was corporations which executed these acts which I described, not to mention others. These are real and actual offences done by corporations around the world, and they cannot be ignored or glossed over in the pursuit of an idealised world where everyone plays nice because the government does little-to-no regulation of markets.

Corporations are as dangerous a force in the world as the out-of-control US war machine. But to say that is to avoid the fact that corporations are incestuously intertwined with the war machine. Look at the US military in Iraq, where US soldiers buy their lunches at McDonalds and then help protect Haliburton engineers.

Because Libertarianism has its emphasis on economic liberty, it does not make qualitative distinctions between different forms of economic activity. That is the flaw in Mr Root’s reasoning about the “backbone of Egypt” being “the business owners, small business community, and middle class”. It isn’t, really.

It’s companies like Vodafone and the four big Egyptian internet providers (Link Egypt, Vodafone/Raya, Telecom Egypt, Etisalat Misr) that bowed to government pressure to cut service to Egypt. The top five companies in the Egyptian stock market, by market cap value, [source] are as follows:

Orascom Construction Industries
Telecom Egypt
Commercial International Bank (Egypt)
Orascom Telecom Holding
National Société Générale Bank

Together, these companies represent nearly 4% of the entire stock market’s value, which is a pretty hefty chunk of Egypt’s internationally marketable wealth. Additionally, wealth distribution in Egypt is quite horrible, ranking as the 90th most unequal country, according to the CIA World Factbook (the US, as an aside, is 42nd.)

The real economic backbone of most countries across the world are corporations, not small businesses. It is a very romantic but inaccurate myth to look out over the economic landscape and see mom-and-pops going about their business. Instead, there are huge and faceless corporations going about everyone else’s business, as well as their own.

This is the backbone which Mr Root is listening to, because he is not able to see the difference between economic reality and economic romance. That is the conceptual mistake which is inherent in Libertarianism; that is a backbone which must be replaced, not defended.

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