If power corrupts through bigness, why cannot I pose the point that power corrupts Corporate America because of its size? And, I pose the additional point that Corporate America is as incestuous in its conduct as we blame Big Government. Big Government is bad; Big Corporate America is bad.
Wow, you may say. Sam, I thought you where for free enterprise. Sir/Madam, You would have difficulty finding another as strong as I am for free enterprise. My beef about Corporate America falls along the theoretical lines of enumerated powers discussed in government. It goes like this.
Microsoft was started in a garage, so the story goes, and look at its size. I have no problem there. Hewlett Packard, somewhat the same story. Now, these are broad-brush illustration, so let’s not counter with any small deviations within these two companies. My “stretch” here is that these two companies, although huge, operate within their enumerated “business” – computers. Until they show evidence of monopoly, another form of “power Corrupts,” I would leave them alone.
Just slightly beyond the turn of the 1900′s, General Electric hailed itself as the “Largest Electrical Manufacturing Company in the World.” But,what took them from the enumerated “electrical” and “manufacturing” nature of their company to buying Kidder, Peabody & Co., a securities house? What took them to ownership of a foreign Turkey-based bank? What took them to the amusement business in Orlando, Universal Productions? Answer is, corrupting power under the guise of investment.
Up until about 1969/70, banks were owned by “people.” Then, it passed that banks could be owned by a “one-Bank” parent corporation. That could make raising capital easier, they said. Then, if that worked, “Why couldn’t a bank’s parent buy a Travel Agency?” And they did, plus securities companies, life insurance companies, and on and on. The bank conglomerates got huge. Why? Corrupting power under the guise of investment.
I don’t know about now, but the S.E.C. accounting rule used to be that if you owned 25% or more of an entity, “you controlled it.” That still is a good rule. If GE bought Peabody Kidder & Company as an investment, would not, placing the corrupting power aside, the need to control, . . .would it not have helped all free markets if GE bought 24.9% of Kidder, and 24.9% of some other company, and 24.9% – you get it. They didn’t do it because of the need to control it all.
So, what is the answer? I don’t have it. However I do know that Big Corporate America is like a newly diagnosed pox. We now learn of it, but the vaccine to heal it isn’t here yet. I say this, CP-USA needs NOT to be on the side of Big Corporate America. What is so apparent today is how Big Corporate America is feeding Big Government and vice versus.
24.9% buys more jobs!
Sam Gallo
