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Capitalism corrupts all that it touches

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Feb. 25th, 2004 | 10:21 am

The Corporate Stooges who Nobble Serious Science.

For instance: "A study of research papers examining the side-effects of a class of heart drugs called calcium channel blockers found that 96% of the researchers who said they were safe had financial relationships with the manufacturers, as opposed to 37% of those who raised concerns. "

Although I was reading The Collapse of Complex Societies which pointed out that corruption occurs so frequently in complex societies, that for all intents it's part of the cost of complexity.

The author did point out a detail which I suspect is true. Free market ideologues love to point out the inefficiencies of government, but I had never heard of an actual evaluation of the efficiency of corporations. The theoretical efficiency of the market is provided as a justification with corporations are inherently more efficient.

However, in 1956 Bendix compiled efficiency measures for industry in several nations. He was able to show that a pattern of increasing hierarchical specialization characterizes the private sector as strongly as Parkinson has demonstrated for the public. Clearly the private sector, where economic success depends on efficiency, this pattern cannot be attributed to self-serving inefficiency. The reason why complex organizations must allocate ever larger portions of their personnel and other resources to administration is because increased complexity requires greater quantities of information processing and greater integration of disparate parts. (The Collapse of Complex Societies</a>, pg 107)

As any organization gets larger, an increasingly large fraction of its resources are spent on administration instead of productive work.

It seems like eliminating government sponsored work in a capitalist society provides new opportunities for corruption to take root. Of course socialist countries also rife with opportunities for corruption. The ideal case seems to be some form of separation of powers where the different groups check each other.

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Comments {10}

[you'll find a light, find a friend, find a way]

(no subject)

from: artemii
date: Feb. 25th, 2004 10:25 am (UTC)
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well, i think a decent part of corruption with regards to governments is allowing privatization of public spheres, and allowing government employees to appoint the private companies which benefit.

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Diane Trout

(no subject)

from: alienghic
date: Feb. 26th, 2004 12:10 am (UTC)
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It certainly seems to be the most common form of corruption these days.

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Josh

(no subject)

from: irilyth
date: Feb. 25th, 2004 10:50 am (UTC)
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The ideal case seems to be some form of separation of powers where the different groups check each other.

Indeed, and this is a consequence of the most correct conclusion about corruption: Power corrupts, whether public or private. Checks and balances on power lead to less corruption, and checks and balances are a feature of both liberal democratic governments and free markets.

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Diane Trout

(no subject)

from: alienghic
date: Feb. 26th, 2004 12:13 am (UTC)
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One of my frustrations is it frequently seems like the pro-free market types act as if markets are nearly magical in their abilities to solve problems and that command driven solutions are always inferior.

This seems to me to be untrue. Sometimes markets work better, sometimes command driven works better.

Though I think that command driven has a better chance at providing equality between societal members, while markets provide better chances at having more stuff.

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Josh

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from: irilyth
date: Feb. 26th, 2004 07:36 am (UTC)
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Markets don't particularly care about providing equality of results, so sure. On the other hand, a command-driven system concentrates a lot of power in the ones doing the commanding, whereas market power tends to lie with consumers, who aren't as good at abusing it (because they each only have a very little bit of it). An awful lot of market corruption happens when forces outside the market start intefering with things...

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Diane Trout

(no subject)

from: alienghic
date: Feb. 27th, 2004 12:41 am (UTC)
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Though the larger corporations are very good at exercising their power in ways that the consumers and workers have difficulty with limiting.

I think the typical libertarian view, claims that if a corporation is selling an unsafe product that well informed consumers will take their business elsewhere. However with the current ownership of the media by large conglomerates are news isn't that much more independent than say pravda. For instance Fox squashed the rBGH story because it upset monsanto.

thedward pointed me to a proposed economic system called parecon. It has the freedom of choice of capitalism without the centralization of power of either capitalism or command socialism.

It'd be nice if some reasonably sized population would volunteer to run the experiment of actually seeing how well this system might work.

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Josh

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from: irilyth
date: Feb. 27th, 2004 08:21 am (UTC)
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Many libertarians are wary of corporations as a concept, actually. They're not fundamental to capitalism, and I've seen arguments that things like limited liability (a concept added and enforced by the government) are detrimental to freedom. I haven't thought about this as much, but it doesn't seem obvious to me why corporations should have any special legal protections at all. (I don't really have a good sense of the current state of corporate law, though.)

I've only glanced at the parecon stuff, but it seems to be more about efficient economics and social happiness than freedom per se. I personally value freedom a lot higher than economic efficiency; made the trains run on time and all that. (And I suspect that the justification for legal protection for corporations is economic rather than libertarian.)

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the Edward

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from: thedward
date: Feb. 29th, 2004 09:34 am (UTC)
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    I've only glanced at the parecon stuff, but it seems to be more about efficient economics and social happiness than freedom per se. I personally value freedom a lot higher than economic efficiency; made the trains run on time and all that. (And I suspect that the justification for legal protection for corporations is economic rather than libertarian.)
If that was your impression, I suppose you take a another, perhaps deeper glance. Parecon is an economy imagined as a complement to anarchy so it really is more about freedom and equality. Though I imagine it is possible there is more than one thing with such a name, the one of which I write can be read about at http://www.parecon.org/.

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Diane Trout

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from: alienghic
date: Mar. 1st, 2004 09:06 am (UTC)
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I read the most recent parecon book. I think the author spent most of the time talking about efficiency to counteract the argument that capitalism is the best possible economic system.

The author did also spend some time talking about how much freedom a parecon would have. The first example was the "kinky underwear problem", since consumption requests have to be forwarded up the chain something needs to be done to protect the kinky persons identity, so the default parecon design requires that anonymous consumption requests be honored and that all requests that a person can afford be granted.

Though later he does provide an example where consumption requests shouldn't be granted. What should an evaluation board do to a request for an excessive amount of alcohol? A sufficiently excessive request is likely to indicate alcoholism which can cause a sufficient societal disruption to impact those around the alcoholic.

Should those requests be granted? The default system would probably allow it, though perhaps there should be some small roadblock to discourage harmful requests?

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Josh

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from: irilyth
date: Feb. 26th, 2004 10:00 am (UTC)
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http://www.reason.com/0403/fe.js.confessions.shtml has a wide range of examples of how command-driven interference in the market leads to corruption. None of the idiocy described there would be possible in a pure market economy.

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