Would The World Be Better Off Without Corporations
* If You Think Corporations Are Bad, Try Living In A Country Where They're Illegal
January 18, 2001
by Dennis T. Avery
THE BridgeNews FORUM: Viewpoints on farming, farm policy and related agricultural issues, January 12, 2001.
CHURCHVILLE, Va.--While Florida was recounting its presidential votes, I was in Canada debating the merits of biotechnology for agriculture.
My opponent, anti-biotech activist Brewster Neen, bashed corporations so harshly I thought I'd been transported back into the presidential debates, with Vice President Al Gore promising to save us from Big Oil, Big Medicine and Big Business.
Now President-elect George W. Bush is being criticized for being too "corporate." Neen claims corporations will use biotech to enslave farmers and make health care too expensive for the poor.
Silly me, I thought farmers were free to buy whatever inputs they choose; I hoped biotech vaccines and gene therapy might cut the cost of staying healthy.
Frankly, I have a hard time taking corporate-bashing seriously, but it's enjoying a new surge of popularity among the activists who oppose modern farming and farm trade.
Part of my problem is that I've seen countries without corporations, such as Kenya and Ghana, which are beautiful but starkly poor.
Corporations avoid Kenya because President Moi and his government ministers demand lavish amounts of graft. The president of Ghana used to prosecute even market women for "profiteering" on their trays of vegetables.
Cuba doesn't allow any corporations. Everything there belongs to the government, including your food rationing coupons.
North Korea has no corporations. Instead, it boasts the world's only recent famines. The biggest problem for the food-aid folks there is making sure the North Korean army doesn't steal all the food aid.
Russia may have things labeled corporations, but many are front organizations for criminals. Russian pensioners sell apples and what remains of their furniture on street corners to get by. The Russian government seems to get a lot of its income from selling weapons to Third World dictators.
The countries that welcome corporations are a sharp contrast: the United States, Canada, Europe and Japan, all of whose citizens have gotten richer, freer and are living longer than any people in history.
The Asian Tiger countries also welcome corporations, and they've been raising their incomes faster than any people ever have. The economic growth that took 150 years in Europe has taken only about 40 years for places like Taiwan and South Korea.
Mexico used to hate corporations, and most Mexicans earned about $100 per year growing scraggly corn with burros and hoes. The new Mexico welcomes corporations and the country's per capita purchasing power is now at $8,000 and rising fast. (They've now got better things to do than hand- hoeing scraggly corn, so they're importing more corn from the United States.)
Is there a pattern here? China is still a Communist country, but it now permits both Chinese corporations and foreign joint ventures. The corporate activity has helped transform China from near-starvation in 1978 to a country where a large portion of the people have refrigerators, color TVs and modern health care.
The first reason corporations are successful is that they're forced to be. They can't make you pay for things you don't want, or declare themselves monopolies, as governments routinely do.
John Deere makes green tractors, but they know other companies make blue ones, red ones, white ones and orange ones. Either they deliver quality for the money, or they're out of business.
Even a biotech company with the only product of its kind is one competing experiment away from being obsolete. (Microsoft is in exactly the same position.)
Corporations can't afford to reward counterproductive behavior, such as staying in an old coal-mining town after 90 percent of the jobs have left.
Or trying to raise kids in a welfare-funded urban ghetto where the prevailing role models are dope dealers and prostitutes. Governments encourage such behavior all the time.
Corporations don't exactly create wealth, but the evidence says they help people create wealth. Without corporations, a business investor might lose his house if a customer sued the business.
The corporation's limited liability encourages investments in machine tools and other technologies that make possible the abundance we enjoy today.
Come to think of it, that's what the opponents of agricultural biotech seem to be really against the technological abundance we enjoy today and the prospect the whole world can share it tomorrow.
Why are they against people living well? It's certainly not to protect the environment. All over the world we can see that poor people abuse the environment, clearing forest for low-yield crops and fouling streams with wastes they can't afford to treat.
Rich people protect the environment. The wealth generated through corporations helps us do it.
Dennis T. Avery is based in Churchville, VA, and is director of the Hudson Institute's Center for Global Food Issues.