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Contrasting Views of the Corporation

by Christopher Chantrill
January 01, 2004 at 3:00 am

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JOHN MICKLETHWAIT & Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea, Modern Library, New York, 2003, 227 pp., $19.95
Naomi Klein, No Logo: No Space No Choice No Jobs,
Picador USA, New York, 502 pp., $15.00

IF YOU SURF to the website of Adbusters, a magazine devoted to the “unbranding” of America, you can download the “Brands and Bands,” a US flag in which the stars have been replaced by the logos of thirty multinational corporations. The corporations have taken over America. Get it?

Of course, the Adbusters are right. Corporations—limited-liability companies—are immensely powerful, and they certainly outshine the 50 states that adorn the Stars and Stripes. But the question is: what are we going to do about it? Two recent studies of the modern corporation approach, in different ways, this great question.

In their entertaining The Company: A Short History of a Revolutionary Idea John Micklethwait and Adrian Wooldridge, two journalists from the London Economist, remind us that the corporation has not always bestrode the world like a colossus. In the early nineteenth century, the limited-liability company was considered obsolete. “‘They are behind the times,’ thundered one governor of Pennsylvania.” Yet by 1862, when the British Parliament passed the landmark Joint Stock Companies Act that allowed limited-liability companies to be formed without special license from Parliament, limited liability was all the rage from Berlin to Washington, D.C. In 1893, Gilbert and Sullivan produced their Utopia Limited in which a promoter travels to the South Seas and turns the inhabitants and the government into limited-liability companies. The Companies Act is celebrated in song: “All hail, astonishing Fact / All hail, Invention new / The Joint Stock Companies Act / The Act of Sixty-Two.”

The Company begins with a quick prehistory of the corporation, introducing the crude trading arrangements of the ancient Sumerians, the societates of Rome, the trading partnerships of Venice, and the immediate ancestors of the modern corporation, the “chartered companies” of the sixteenth and seventeenth centuries.

The meat of the book is contained in “A Long and Painful Birth,” a chapter that describes the century of political and corporate maneuverings that culminated in the Act of Sixty-Two and the global emancipation of the limited-liability company. The chartered company of 1750 “represented a combined effort by governments and merchants to grab the riches of the new worlds opened up by” the age of exploration. As government-licensed monopolies, they were political creations and were owned by the great and the good. But their owners held shares that could be bought and sold on the open market, and they were protected by limited liability. “Colonization was so risky that the only way to raise large sums of money from investors was to protect them.” Then in the early eighteenth century the governments of France and England thought that they would restructure their war debts using the chartered concept. The result was the first great modern bubble: the John Law fiasco in Paris and the South Sea Bubble in London. In England, the South Sea Bubble sired the South Sea Bubble Act, a punitive law that required each limited liability company to secure a charter from Parliament. It took a century before legislators would again look at the bright side of limited liability companies. When Parliament found itself approving dozens of corporate charters a year during the railway mania, it was time for a change.

After its painful birth, the corporation commenced a childhood as Peck’s Bad Boy. Neighbors never tired of gossiping about the latest corporate escapade, and The Company does not shrink from passing on all the shocking details. But it also tells of the achievements, “producing society-changing products, like the Model T or Microsoft Word” and also changing the pace of daily life and “the way that people behave.”

To some people, the gentle seduction of society-changing products felt more like a forcible rape that put an end to the romance of ancient idyllic relations and substituted as a sole nexus for social interaction none other than callous cash payment. Instead of a world of corporations, they wanted a world community. Thus was born the great secular religion of socialism, a movement to purge the world of the evil corporation. Part political movement and part religious crusade, its message proved irresistible to millions, and for a century it grew like wildfire. Then it collapsed in a ruin of mass graves and unspeakable oppression.

Comes now revivalist Naomi Klein to awaken a new generation to the enthusiasm of left-wing activism. Dutiful daughter of the welfare state and of hippie parents who went to Canada in the 1960s to dodge the draft and provide for their children the “benefits of Canada’s humane social services, public health-care system and solid subsidies to the arts,” she attempts to create in No Logo® (yes, a registered trademark) a manifesto for a new generation of “activists.” She is shocked by the megabrands, the brand bombers, and the category killers of the modern consumer society. For in the blaring public space of the brands there is No Space for artists and creativity, in the ravenous appetite of the Wal-Marts and Starbucks there is No Choice for consumers, in the new world of temporary jobs and contract workers there are No Jobs for workers. Fortunately a new movement of left-wing activism has arisen to oppose and harass the new predators, and to raise high the chalice of No Logo

Historian John Lukacs has written that you can tell a lot about a writer by the moment he has chosen as Year Zero, the moment at which history begins. The value of The Company is that its Year Zero is not 1850, 1800 or 1750, the years chosen by most historians of modern commerce, but 3000 BC. It develops a narrative to paint in the empty centuries of industrial prehistory and set the scene for what might be called the Axial Age of the corporation, from about 1750 to 1850.

But for Naomi Klein, Year Zero seems to occur about 1980. Before then, North America was a paradise of good jobs for good wages, responsible corporations, strong unions, and comprehensive public services. But since then things have gone straight down hill. Huge budget deficits, ruthless privatization, and school budget cuts [sic] have shredded the public services that once protected us, and the megabrands and big box stores have gutted once flourishing Main Street stores and businesses, particularly independent bookstores and coffee houses. Never mind that a generation ago, the left was railing at the Man in the Gray Flannel Suit and the stultifying conformity of his big company loyalty, and that two generations ago the left was railing at the hypocrisy and vacuity of Main Street boosterism. All is forgiven: just keep out the megabrands and the category killers.

Klein’s lament reminds us that the last two decades of the twentieth century have not been happy times for the left. The great compromise that the left had imposed upon the middle class and had thought would last forever unexpectedly fell apart. Suddenly progressive tax rates were slashed, public services were privatized, and once great industries downsized and moved offshore. In the aftermath, if you want to shop you go to Wal-Mart; if you want a cup of coffee you go to Starbucks. It is all too bad and a profound disappointment to the messianic hopes of the 1960s.

As The Company makes clear, the rot started well before the evil 1980s. Branding started in the late nineteenth century when the new railroads made it possible to attempt nationwide distribution of goods. And Sears, the prototype Wal-Mart, went into business in the 1880s to undercut the mom-and-pop general stores of nineteenth century rural America. But to push Klein’s Year Zero back a century would dilute the scandal of 1990s globalization, and make it into just another episode of routine capitalistic creative destruction.

Still, Naomi Klein has a point. The seismic shift in the workplace has broken up the old working culture of good jobs for good wages that the left labored for a century to build. In the aftermath of that earthquake liberal arts graduates find themselves working as coffee counter-jerks and Filipino teenage girls leave the stoop labor of the farm only to end up in urban sweatshops assembling garments like New York City immigrants a century ago. Something must be done. But what?

To fight the evil corporations, Klein recommends a “raiding” strategy of guerrilla war: adbusting, culture jamming, brand bombing, and blooding the odd corporation to provoke a media feeding frenzy. Significantly, this strategy for opposing the corporations is not the Marxian persisting strategy of invasion and conquest but a raiding strategy of hit and run. It is a sign of the strength of capitalism that it seems now, like China, too big to invade.

Klein’s favorite target for anticorporate activism is the evil Nike, worldwide purveyor of athletic equipment. Nike epitomizes everything that lefties hate about the new economy. First of all, Nike’s Swoosh is the quintessential “überbrand,” and lefties hate all brands except their own: the Hammer and Sickle, the Raised Fist, and the Socialist Rose. Nike also markets its products in the inner cities, and that is bad because the single mothers of inner city kids can’t afford Nike prices. Then Nike has pioneered the idea of outsourcing manufacturing. It designs, brands, and markets athletic equipment, but often doesn’t manufacture it. This is annoying to lefties because they want to be able to force corporations to create “good jobs for good wages” for their workers, and it isn’t fair if the workers that assemble Nike’s athletic shoes in Third World sweatshops aren’t actually Nike employees.

No Logo avoids the epic sweep of The Company. It carefully avoids placing the modern economy within a broad social and historical context. Its purpose is not history but to instruct the reader in the catechism of left-wing protest. Klein leads her readers on a tightly controlled tour of Corporate Exploitation Theme Park. She stops the bus at the Cavite Export Processing Zone in the Philippines, and we all recoil at the squalid sweatshops and applaud the plucky union leaders and the frightened teenaged girls they are trying to organize. She stops the bus in the inner city and we shake our heads over a young black kid whining at his mother to buy some Nikes and cheer the adbuster high above our heads who is altering the message on a billboard. She stops the bus at a corner Starbucks, and we frown when she tells us that Starbucks snatched the lease away from a long-established mom-and-pop coffee house. She stops the bus at a Reclaim the Streets event and we chuckle at the colorful rebels partying the night away. But readers are never allowed to admire the view from an overlook or to wander around unsupervised. So we never learn from tour guide Klein, as we do from Johan Norberg in London’s Spectator, that what the workers really want in a Nike factory in Vietnam is for Nike to expand the plant so that they can get jobs for their relatives. What they really appreciate is not the wages, but the escape from working outdoors on the farm. Is that why New York City’s streets seemed to be paved with gold a century ago? Because it offered indoor work?

The birth and rise of the corporation remains an epic and frightening experience. It is as if a great bear suddenly appeared in town. What should we do? Should we kill it? Should we cage it? Or should we keep a wary eye upon it and see what happens? A century ago, the left said: Kill it! Half a century ago, it said: Cage it! Now Naomi Klein says: Poke it in the eye!

How about we step back and marvel at it, warts and all, as Micklethwait and Wooldridge do, while keeping a two-by-four handy, just in case we need to get its attention?

Christopher Chantrill blogs at americanmanifestobook.blogspot.com.

Buy his Road to the Middle Class.

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E. G. West, Education and the State

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presented by Christopher Chantrill

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