Katz has an article at Slashdot focusing on a recent Business Week poll showing most Americans think corporations have too much power. At the end of his article, Katz notes with glee that 95 percent of the people in the survey agreed with the following statement,
U.S. corporations should have more than one purpose. They also owe something to their workers and the communities in which they operate, and they should sometimes sacrifice some profit for the sake of making things better for their workers and communities.
I am in the 5% minority who thinks it is a very bad idea to expect businesses to do things for the community. Corporations used to want to do a lot of things for their community, resulting in company towns where they controlled everything. More recently when corporations decide to do the “ethical” thing it usually involves caving in to predominant community standards.
When Wal-Mart and K-Mart announced they would stop selling violent video games to children under 17, they were sacrificing profits for a greater good. I’d personally prefer not to be subjected to that sort of corporate paternalism.
As usual Katz misses the really big issue which is whether or not we really need big corporations anymore. On the one hand, a lot of people seem to dislike working for large corporations. Plus it’s hard to tell whether or not the underlying economic basis for corporations will hold. Corporations have typically had an advantage due to economies of scale both in producing goods as well as contracting for labor. One of the main advantages of a corporation, for example, is reducing the transaction costs of managing thousands of employees.
But the Internet may undercut both of those since it undercuts the transaction cost advantage and allows very small businesses to compete on a relatively equal playing field with large corporations. We’re even beginning to see the first serious hints of the so-called virtual corporation, with some products quickly coming to market today that are designed by one firm, manufactured by a second firm, and then marketed and sold by several other firms under different brand names.
I don’t think we’re going to see the corporation disappear, but I do think we’ll see a gradual winnowing of very large corporations and are likely to end up with an economy dominated by even more small business and medium sized companies than today.