Two Cheers for Large Corporations

Large corporations help those of modest incomes by selling low-cost goods to the many. They help employees by providing relatively stable jobs, by offering a discipline that many workers cannot impose on themselves, and providing career opportunities that small businesses frequently do not.  Walmart to me is the paradigm example. It has been partially responsible for the happy fact that the cost of living has been going up more slowly for the those lower on the income scale than those higher. It has employed over a million people and not generally those who have backgrounds in prestigious education or other evidence of high human capital endowment.

But some commentators have doubted whether such large corporations are good for our republic and our civic culture generally. This concern has deep roots in American history, harking back to the Jeffersonian vision of a nation of sturdy and independent yeoman farmers.  Before the modern era some even thought to make the antitrust law the legal means to sustain an economic world of “small dealers and worthy men.” 

Nevertheless, on balance large corporations are good for our civic culture, at least given the kind of modern government we have. First, these corporations do indeed still promote a work ethic, particularly in a culture where government schools do such a bad job of this. Even modest jobs at companies socialize people into work and get them started on productive life.

Second, large corporations offer the closet approximation many people will have to civic associations of the kind Tocqueville celebrated.They assemble a diverse group of people to serve a cause larger than themselves—helping others with a product or a service they need. As such corporate employees have to subordinate their individual desires for the welfare of group and follow rules even if in some cases they think they could do better without them. In this sense, a corporation, like any civic association, is good training to be in a constitutional republic where we should follow our original charter, even if we personally believe we have some better rules to add or subtract.

Third, large corporations provide social capital.  Many contribute to cultural institutions. Today, some focus on offering ways to improve K-12 education, even if they are not in that business. To be sure, their charity is not wholly altruistic. A better culture in the city of their corporate headquarters can help recruit employees, and better education can create students who are worthy of recruiting. But these actions at scale have positive effects on society as a whole.

Fourth, large corporations provide a counterweight to big government.  The Business Roundtable and Chamber of Commerce are forces for lower, not higher taxes. To be sure, businesses also create a danger of crony capitalism in which they will lobby for special privileges for themselves. But given that big government is not going away, we would still be worse off without their balance to the bureaucracy and the scribal class. And even their lobbying on behalf of their own narrow interests is somewhat useful. In its absence, most information would be generated by the scribal class and bureaucrats, who are hardly disinterested either.

In a subsequent post, I will address the complaint that large corporations more generally corrode our culture, in arguing for racial and ethnic preferences or in being hostile to religious liberty. But I hope I have shown here why they deserve two cheers from the friends of republican liberty.