From the Notebook

What about Corporate Take Over?

blogqz01 | 04 January, 2010 17:18

In the discussions regarding policies responding to the economic crisis and the health care debate, people often talked about the danger of government take over of the businesses. But here I like to talk about the danger of some corporations and special business interests take over the government.

If you are paying attention, you would agree this danger is actually real. In a democratic society, the government should be representing the people. Although there are imperfections in the system (that I will talk about in the following portion of this post), the system is set up that generally speaking, if the government is taking over the businesses, no particular person will be benefited from it.

So, if government take-over actually happened, it would most likely be based on the belief that it will benefit the public, not to benefit particular group of people. In the currently situation, the argument about government take over actually is lack of factual support. Government on behave of tax payers rescued banks, financial institutions, insurance companies and auto industry at risk, while not necessarily share the benefit if these entities becomes profitable. Actually, there are signs that many are making huge profit but tax payers would not be benefited. So, in actuality, it is not government take over, but government hand out or government care taking.

About health care reform, the representatives for private insurance companies acted as if that there is a fundamental rights for them to operate as is that have to be protected by the government. I will write more about the rights of corporations below in this post, here I like to say that health issue is first and foremost a public issue. For instance, the swine flu vaccine are administrated by the government, and government are currently responsible for the health and safety related issues in general. So, the government as the representative of the people has the right to be involved more into the health care related businesses if it will benefit the public.

The danger of special business interests take over the government is real because there could be certain people that will benefit personally by influencing the policies of the government. With this incentive, it would more likely that some people will try to stire the policies in the ways that will benefit them even if it will harm the interests of the general public. If fact, it is possible that certain people will ignore the tremendous harms to the public in order to obtain relatively modest benefits for themselves. Needless to say that there is no justification for them to do so.

However, there is no effective way to prevent them from doing so in the current political system. In my view, as a general policy, special business interests have been elevated above the interests of the general public. So, the danger of corporation take over the government is not a potential threat, but is a danger that already produced harmful results (take the entire episode of health care reform legislation, the influences of various corporations and industries are not so invisible).

I like to say here that as a business owner myself, I am not against business interests. But I believe that as a business owner, the basic principle is that the business should benefit the public, otherwise, there is no reason for the business to exist in the first place. In other word, if the business benefits the public, then it is in the interest of the public to protect the business, so there is no real conflict between the public and the businesses.

The conflict only exists when the business owners forget about this fundamental principle and focus on the short term gain. In the market economy, the earning from the business is general the reward from the public for the useful contribution to the society, so doing good to the public is not just a moral issue, it is a prerequisite for the actual survival of the businesses. In the long run, business cannot survive if they are harming the public interests, sooner or later, either there are new market mechanisms to correct the mistakes, or the public will be feed up and change the policies that generated the unjust results.

Most large corporations are publicly traded companies. As I stated in my earlier post, there is a disconnection between representation and ownership similar to the disconnection between government and the general public. As publicly trade companies are still considered as private companies, there are even less transparencies in these companies than the government. So that there is a danger that some people will focus their own interests first that they will do something to harm the public and the companies solely for their personal gains. We saw many examples of this kind recently. This is basically the reason that leads to the financial crisis.

Focusing on protecting short term business interests is not just lack of vision, it is basically in violation of basic principle of the business. As people emphasis on the survival of the fittest, it is those that are paying attentions for the needs of the society and working to fill those needs that will be successful. Trying to use undue influence (as I will write in the following paragraphs, most of influences on the political system by business are undue) on political machine will often lead people to forget about the principle, and will lead to deterioration of the health of the business and possibly lead to downfall of the business.

The influences of businesses on politics and most of the related activities under the current political system are based on the right to petition of first amendment of the constitution. But I believe this interpretation of the first amendment rights is wrong first because there is a clear distinction between business entity and nature entity (i.e., human).

Fundamentally, business entities are fictional entities as they are defined by their activities. A nature person is defined by physical existence. Rights for the natural person are based the person’s rights of survival and condition of the survival. A business exists for one basic purpose, to make money for people involved in the business. But it is obvious that not all activities that can make money are allowed by the society (for example, the assassin for hire business would never be a legitimate business in any society), so there is no fundamental rights for such business to exist, let alone enjoy the protection of first amendment rights.

For example, can an assassin for hire businesses insists that they have a right to exist and use their money and influences on politics to change laws to legalize killing and even go further to make laws for it be easier for people to hire them? It may seem as far fetching, but in real life scenarios, there are things happening that we may well make this analogy.

There are many attempts to reduce the influence or effects of the lobbyists. But I think the target is mislead and not to the core. Yes, gifts or sponsored events will make the job of lobbying easier, but access alone make the lobbying act an unfair act above the public.

It is obvious an average private citizen would not have the chance to talk to congressman or senator in person and in private about their concerns, so why the lobbyist are allowed to do so?

In Justice Sotomayor’s confirmation process, there are questions about whether judges are allowed to make law. I think judges are making law at least collectively as common law system is the supplemental system to the legislative laws. But no doubt legislators are making sweeping policy decisions that often have more significant effects on the society.

I think most people know that judges are not suppose to have ex-party contacts in the cases that they preside on, so why legislators making sweeping policy decisions are allowed to have behind the scene, close door meetings with special interests?

Even if we assume that corporations enjoy the same type of constitutional rights as natural person, the right to petition does not necessarily protect the right to lobby. Would any and every citizen be given the right to have face time with the legislation member? Then why are corporations given this privilege?

I am not suggesting that businesses do not have legitimate concerns regarding legislative policy, and I am not suggesting that businesses cannot have their opinions heard. They can provide their inputs regarding legislations in writing (that will be part of the public record that anyone can see), and can talk to legislative members in public gathering, just like the average citizen.

You make think this will make the legislators’ offices more like judges’ chambers. But isn’t it what they should be? Do you prefer their offices be more like private clubs, or market places?

During his campaign, President Obama promised to change Washington. In order to do that, he needs to make fundamental changes that can fix the broken system, the kind that I wrote in this post. I believe it is the time for him to lead the legislative body to do so.

**Please look for my other posts regarding the modern life, politics and economics, and legal system, about discussions related to issues in this post.