This Ruthless World

Adventures in absurdity

Run It Like A Business, Part 2: The Myth Of The For-Profit Democracy

Mikhail Kostin, "In Stalin's Factory" (1949)Part 1

One of the justifications that Trump supporters invariably offer for putting a bunch of business executives in charge of the country is that the US needs to be operated like a for-profit business.  Who wouldn’t like America’s governance to resemble the Trump Organization?  I suppose your average well-to-do Trumper dreams of the days when this whole land will be a Trump golf course, and assumes he’ll be among those who tee off in goofy outfits, and not one of the grossly underpaid, ill-treated staff.

So in this analogy, America is a private company, and the Trump family owns it.  It’s their property; Donald Trump himself certainly seems to think so.  The only question is: who are the citizens in this scenario?  Small shareholders? Customers?  Employees? The real problem with running a country “like a business” is that there is no free market.  As shareholders, Americans (at least those who aren’t rich) can’t just sell their shares if they don’t like this “business” and invest into some other “business”.  If Americans are “customers”, then America-as-a-business is Comcast.  It has a 300-million captive clientele that can’t fire America’s ass and sign up with a competitor.  If Americans are “employees”, they can’t just quit and go work for someone else. I know, lots of folks in middle management talk of moving to Singapore, Belize or Chile to escape regulations, but let’s be realistic:  unless you have a lot of money, this isn’t happening.  (Chile, bless its clever heart, will give you a residence permit to “retire” if you can demonstrate a certain net worth.  In other words, they will take your money, but they won’t let you work, let alone operate a business, and they won’t make you a citizen, always keeping the threat of unappealable deportation hanging over your head.  You can live there for decades, be fully integrated in the community, and all it’ll take is one electoral shift for your entire life to come crashing down.  But I digress.)

What is known today as the Rust Belt was once a land of company towns.  The company town still exists today, but it’s a shadow of its former self. During the Gilded Age, it was an industrial latifundium, a state-within-a-state, with its own laws, its own police force, its own currency, and, when needed, its own professional army.  Under this system, imported from Britain, the employer acted as its workers’ landlord, grocer, book merchant, clothier, postmaster, school master, doctor and religious advisor.  Many businesses not only required workers to live onsite and charged them rent, but also took to paying the balance in vouchers redeemable only at the company store, instead of real money, thus ensuring that every penny the workers earned went back to the employer.

Some companies doing this, though admittedly not all, were motivated purely by greed: they charged exorbitant prices for basic necessities and kept jacking up the rent at a much greater rate than raising salaries (if they raised them at all).  Thus, most workers ended up being perpetually in debt to their employer.  In this system, almost entirely free of regulation, industrial labor turned into de facto slavery, since workers — being always in debt to the employer — couldn’t leave except at the risk of being arrested for theft.

Some company towns, in contrast, were operated with the best of intentions.  They had comfortable housing, good schools, subsidized healthcare, adult education and reasonable prices at the company store.  Tycoons who founded and ran them saw themselves as reformers, and envisioned a kind of a city-on-a-hill, with the millionaire a God-like father figure, and the workers his grateful and obedient children.  (Incidentally, there have been slave owners throughout history, in various cultures, who saw themselves and their estates exactly like that.)

The common denominator for both “good” company towns and “bad” company towns, however, was control.  These big corporations exercised a tremendous degree of power over their workers’ lives — they  determined what the workers ate, what they drank, if they drank, what they wore, what they read; and, since the company store also acted as the post office, the company could also monitor, and even open, workers’ correspondence.  It had complete control over recreation; it could require workers to go to church and subject them to a religion of its choosing. Whether this was motivated by greed or paternalistic benevolence, the fact remains that living in a company town was pretty much like living in a totalitarian state.

To today’s Conservatives, the death of these traditional company towns through labor regulations and civil rights laws represents an intolerable assault on freedom — the freedom of the powerful few to enslave the undeserving many.  In their fanatical hatred of the government, they neglect the simple fact that what constitutes “the government” is a matter of circumstances, not official labels.  In an old-timey company town, the company was the government for all practical purposes.  Privatization of governmental functions is an incredibly dumb and anti-democratic idea, because when the private sector acquires governmental powers, it becomes, simply, the government — except one that can’t be criticized, scrutinized, subjected to limits on its officials’ expenditures or voted out of power for corruption or incompetence (or anything, really).  That’s why the Trump administration is so incredibly grifty, and it’s also the reason why Trump is so outraged to be mocked and criticized, or that opposition to his rule exists at all.  After all, that’s not the way things work in the Trump Organization.

A business-cum-government is oppressive, undemocratic and contemptuous of the citizen by design — and nowhere is this more true than when a for-profit business becomes the government officially, with all the bells and whistles, including the army, the navy and the nuclear launch codes.

That was essentially the system in the Soviet Union — an observation that never fails to draw howls of outrage from right-wingers.  But this is true:  the USSR was, in most respects, operated like a Western-style for-profit corporation. As such, it functioned almost exclusively for the benefit of a handful of families at the helm, the “executives”, if you will.  Like any for-profit corporation, it cared only about the bottom line. Unrestrained by any oversight or higher power subject to democratic elections, it functioned according to the standards of the Gilded Age — polluting liberally, producing shoddy goods, exploiting its workforce, leaving those who were of no use to it — the elderly, sick and injured — to fend for themselves in a heartbreaking display of callousness, suppressing dissent and, most importantly, imposing pervasive control over its “employees’” lives.  The country’s population was used as a resource — disposable workers whose purpose in life was to create wealth for the few individuals at the top. Things had a tendency to get very bad for those who were not useful to the management, and worse still for those who dared to oppose it.

For the ordinary citizens, Soviet Russia was one country-sized company town.  As such, it combined both good and bad elements of capitalist-style latifundism.  The Company — that is to say, the Communist Party — was everyone’s employer, landlord, doctor, teacher, grocer, fashion designer, entertainer, librarian and provider of every other available good and service. It is not difficult to guess why that was hugely problematic. There were, without question, attempts at benevolence: everyone had basic health coverage, everyone had a roof over their head, everyone was fed (though not necessarily to their liking), there was meaningful sponsorship and support of the arts, and the school system was top-notch.  But the Company ruthlessly exploited its “employees”, ravaged the environment, treated those who could not generate profit like garbage, cultivated an atmosphere of adulation and unquestioning obedience towards the management, and erected virtually insurmountable obstacles in the path of those who were maybe thinking of seeking “employment” elsewhere.  This was the reality of living under a government operated like a business — that is to say, an unregulated business monopoly whose management  was motivated only by profit and answered to absolutely no one.

As I said in the previous installment, for-profit businesses are inherently undemocratic.  Their management has no interest in free speech, civil rights, intellectual pursuits, or anything else that does not improve the bottom line. And that’s fine, as long as business remains just business — after all, the whole purpose of a for-profit business is to, well, generate profit. What’s not fine, however, is when civil societies apply that model to governance.  Nothing good comes of it. And, if you need a picture of what it’s like to live in a country that’s operated like a business, look no further than a totalitarian regime.

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4 thoughts on “Run It Like A Business, Part 2: The Myth Of The For-Profit Democracy

  1. I don’t agree with all aspects of your comments n businessmen in part 1 but the point that business is not sufficient for governing is certainly true. I’d cite Michael Bloomberg as a rare exception. I’ve also thought that the swamp the Trump supporters want to drain has a lot more to do with the influences businesses have on government than it does with the “deep state”. Good posts! They were fun to read.

  2. Libertarian Tibor Machan specifically argued that we have too much democracy, which allows the peons to have too much of a say in how things work. What we should do, in his opinion, is privatize everything (roads, schools, etc.) and then the people who own everything will lay down the rules (do you teach evolution or creationism? Do we pave all the potholes or not? Who can march in parades on their streets?), and it will all be neat and efficient without democracy mucking everything up.
    Ironically Machan came from Eastern Europe and sees himself as a fighter against oppressive authority.

  3. Pingback: Run It Like A Business, Part 2: The Myth Of The For-Profit Democracy — This Ruthless World | Cochran Consulting

  4. ivorybastard on said:

    “Privatization of governmental functions is an incredibly dumb and anti-democratic idea, because when the private sector acquires governmental powers, it becomes, simply, the government — except one that can’t be criticized, scrutinized, subjected to limits on its officials’ expenditures or voted out of power for corruption or incompetence (or anything, really). ”

    That effectively what Google, Facebook, Twitter, and YouTube are doing. They have assumed dictatorial control over access to information. Free speech was the first casualty. It’s all downhill from there.

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