Power and Exploitation: Governments Vs Corporations


I’ve had a lot of great conversations with Larry Liu, a socialist-leaning scholar at Oxford University.  He and I have gone back and forth a number of times discussing the concept of freedom. Our conversations have largely centered around the philosophical ways to propose solutions to the problems that plague society, and represent what could be considered the fundamental debate that should be had among the two largest philosophical groups: socialists and libertarians.

Where We Agree

Naturally, there are things on which we agree. Foreign militaristic interventions must come to an end. Healthcare is increasingly expensive and too few have access to the medical services they need. Poverty and hunger are still too widespread and affect too many. The gap between those who have and those who have not seems to grow larger by the day. Those who have not are seeing their opportunities and their potential for social mobility diminish. These agreements lead directly to what I view as the primary disagreement between our two groups.

Where We Disagree

Our primary disagreement centers around two things: power and exploitation. We both see that illegitimate power allows those who possess it to exploit those who don’t. While libertarians maintain that legitimate power and the ability to exploit lies with the state, socialists assert that illegitimate power and the ability to exploit lies with rich business owners. Our conclusion is that the state must be abolished, while theirs is that businesses need to be taxed and regulated by a central authority.

Governments Vs Corporations

Libertarians will concede that there is a modicum of truth to the socialists’ position. Some large businesses and corporations do have illegitimate power and the ability to exploit. Because of the way society is currently structured, business owners who are successful and make large profits are able to use their riches to purchase influence in politics. With that influence, they lobby the state to pass laws and regulations that will directly help and/or insulate their business from market competition. Clearly, this should not be an indictment on business and free markets, but rather a cause for eliminating the institution that makes this behavior possible.

Socialists commonly confuse the present societal structure with free market capitalism. They fail to see that a truly free market economy does not have any mechanism through which successful business owners can purchase and wield illegitimate power. As such, no business owner is able to force consumers to purchase their product, nor are they able to force employees to work for them.

A Monopoly on Power

The state is quite the opposite. Since the state holds monopoly power on so many necessary things including security, justice, and water distribution, people are forced to partake of their services with no other available options to turn to when the state fails. Further, the state does not have to worry about people choosing to take their money elsewhere due to their illegitimate power to take money violently and coercively through taxation.

The Freedom of Choice

When a business does something wrong, a free market is able to correct the problem through actions of the people. Customers will choose to no longer partake of its services and will encourage others to do the same. When this happens, the business must change its ways or risk losing more customers and potentially their business altogether. This fact provides incentive for the business to do right by its customers. The threat of being undercut and of loss of market share to competition provides additional incentive for businesses to increase quality and decrease cost – a win-win for consumers.

With the state, there is no such mechanism to deal with wrongdoing, and there is no incentive mechanism to force it to provide quality, cost-effective services. Presently, and throughout history the state has used violence and the threat of violence to maintain its illegitimate power and ability to exploit. To make matters worse, the state is easily corrupted as those who possess the power to create laws can be bought off as discussed in the fourth paragraph of this piece.

Without the state, it is true that successful business owners who earn large amounts of wealth would still have power, as socialists will argue. However, that power would be illegitimate and benign. The business owner’s power would be only that of purchasing power. Their power would not be guaranteed because at any moment the market could change, consumers could stop purchasing their product, or a competing firm could undercut their market share by being more efficient and offering a similar product at lesser cost, higher quality, or both. The business owner must always be working to please his customers. Because of this, in a free market, the ultimate power lies with the consumer.

Humanity’s Long Struggle for Freedom

Illegitimate power is the power to use force, violence, and coercion with impunity. Only the state possesses this kind of power. The history of humanity is that of a struggle between power and freedom. Between feudal lords and serfs, between kings and subjects, and between governments and citizens. All of the greatest increases in human prosperity have come during times and in places where there existed the greatest amount of freedom. If the state were to be abolished, true freedom could exist, and the prosperity of all people could increase unfettered.

Foreign military intervention is a great opportunity for cooperation between our two groups. We both see that this is a great evil that permeates our world. Nothing should keep us from coming together to focus on this issue politically. That being said, there is a huge disconnect among socialist thought when it comes to this issue. Their willingness to use government as a means to an ends necessarily will result in policies with which they do not agree. When one gets in bed with government, one must expect the diseases it spreads.
The primary disagreement between Larry and I, and between socialists and libertarians on a larger scale, contains the key to peace and prosperity. Historically there have always been people like the two of us. Those fighting to eliminate the state and bring an end to its illegitimate powers will always have to work against those intellectuals who continue to provide excuses for the existence of a state. This is a fight that is and will always be worth fighting.

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