[extropy-chat] Depressing Thought. from Laurence of Berkeley

[Brett Paatsch]

Spike writes:

> > On Saturday 08 November 2003 18:49, Rik van Riel 
> > wrote:
> > >
> > > Still, I wonder what "the real power lies with corporations"
> > > means for libertarian beliefs.
> 
> Corporations are collections of people making a living,
> creating wealth by making things, creating jobs and
> wellbeing. 

This is true is a sense and false in another. Its true how Spike
sees it above but its false in that incorporation is a legal device
designed to reduce accountability. Mistakes can be walked
away from and perhaps repeated without wearing the full
measure of accountability unless the veil of incorporation is 
lifted - which of course it rarely is. 

> Corporations are our friends!  

Corporations are not people. They are legal constructs. A strange
choice for friends.

>If real power lies with corporations, then real power lies with
> people working together to create wealth, which sounds good
> to me.

Real power is distributed in 2003 between corporations, and
democracies both of which are hopelessly blind beyond a 3 years
or so horizon. Corporations work for their shareholders in a multi-
national competitive context which includes taking advantage of 
closed societies and the disadvantages of the people therein. On 
the other hand democracies tend to opporate within open
societies to preserve good places for those who have incorporated
to actually live and to raise their families. The wealthy in the closed
societies have tax havens outside their open society that they can 
use. 

Neither corporations nor democracies are all good or all evil and 
neither can run too long without being checked by the other. The
planning cycle of corporations is lucky to be longer than 3 to 5
years as set by capital and the planning cycle of governments to 
get re-elected is also similarly short. 

> Far better this way than with real power being wielded by
> those who create nothing but merely redistribute the wealth 
> that corporations create, while destroying much of that 
> wealth in the process.  This seems to me to be perfectly 
> compatible with libertarian ideals.

War is a great source of creative destruction though for organisations
that only think in 3 - 5 years. It is easy to see that materials and
consummables destroyed will have to be replaced. And the closed
economies of open societies can replace them and keep the jobs 
coming for a few more years. This guarantees a sort of progress but
its progress with an upper speed limit because of the planning
horizon. 

The problem with governments and corporations both working on
3 - 5 year cycles is that progress can only happen in relatively small
increments because of the strong self-fulfilling prophecy effect and 
planning beyond the 3 - 5 year cycle is incredible difficult to do.
This is because changes in government policy make for very difficult
business planning. And governments get changed by voters. A global
corporation that has to plan for a change in US government or Chinese
government for instance has a huge amount of uncertainty in its market
projections and in calibrating its return on investment beyond 3- 5 years
- so they don't try to do it. They work on 3 - 5 year cycles and 
try and be adaptive beyond that.  Anything with a payoff beyond the
3-5 year timeframe - like molecular nanotech perhaps or medicines
finds it very difficult to get a look in - not because their wouldn't be 
demand but because the market conditions for things that far out in
terms of delivery times are almost impossible to predict.

Some of the above could be wrong. I'd like to see a good economist
say Robin take a crack at disputing or rebutting it though.

Regards,
Brett