When Corporations Get Too Large

by Jim Moss, The Seminal, 29 Nov 2008

In the midst of all the bailout madness, we keep hearing the same mantra from those who defend the trillions of dollars that are being laid out by the federal government: We have no choice. If we don’t prop up the Citibanks and the AIG’s (and possibly the GM’s and the Chryslers, too), then the consequences will be devastating for the American work force and for the entire world economy.

And therein lies the crux of the problem. Corporations like these have become so large and so powerful, they simply cannot be allowed to fail, even if free market forces dictate that they should. Paradoxically, our economic system has promoted the growth of these giant companies to the point that the laws of capitalism are being superceded by the necessities of corporate welfare.

Imagine if a locally-owned five and dime store hit hard times because a Wal-Mart moved into town and undercut all its business. Would the government rush in and bail it out? Of course not! That would put maybe a dozen people out of work, and it would be chalked up to the realities of doing business. We like to glorify small businesses, but we’re also used to them coming and going with regularity.

But just imagine if Wal-Mart was in trouble. What if they were in the position that the Big 3 auto makers are in today? Do you think they’d be allowed to fail? Do you really think the government would let the corporation that represents 1.6 million employees, 13% of the nation’s productivity, and 20% of all US grocery sales go under? Not a chance! They’d have no choice but to prop up a company that has made itself indispensable through its sheer size.

The government has no choice. But we, as consumers do. The often untold beauty of the capitalist system is that it depends on the choice of the consumer. And if we are collectively aware enough, we can see the danger in letting corporations get too big, and we can prevent it. We can refuse to give our money to the largest corporations. I call this practice “Shopping Small.”

“Shopping Small” means favoring smaller companies over larger ones when you have a more or less equal choice. Go to a locally-owned pharmacy instead of Walgreen’s. Buy a regional soft drink such as Cheerwine instead of Coke or Pepsi. Purchase toys that were handcrafted by a domestic mom and pop operation instead of by some large corporation in an overseas lead-paint producing sweatshop. If needed, make a sacrifice and pay a little bit extra in order to favor a smaller company. And if nothing else, never darken the doors of a Wal-Mart again.

Of course, “Shopping Small” is only one piece of a larger effort that is needed to reduce the size and influence of our corporations. There will also need to be some serious work done in our legislative and corporate cultures as well. But we as consumers play a big role. Perhaps the biggest is just to sound the alarm and to let it be known that we won’t stand for corporations so large that they can’t be allowed to fail when, in all fairness, they should.

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