• Choose a category
• All
• Classic-Fiction

By Root 618 0

turnover of firms is accelerating so much that most criticism of corporations is out of date already. Large companies not only fall more often these days – the disappearance in a month in 2008 of many banking names is merely an accelerated case in a particular industry – but increasingly they fragment and decentralise, too. As islands of top-down planning in a bottom-up sea, big companies have less and less of a future (the smaller the scale, the better planning works). AIG and General Motors may have been kept alive by taxpayers, but they are in corporate comas. The stars of the modern market economy are as different from the giants of industrial capitalism, eBay from Exxon, as capitalism is from socialism. Nike, born in 1972, grew into a huge company merely by contracting between factories in Asia and shops in America from a relatively small head office. Wikipedia has a paid staff of fewer than thirty and makes no profit. Whereas the typical firm was once a team of workers, hierarchically arranged and housed on a single site, increasingly it is a nebulous and ephemeral coming together of creative and marketing talent to transmit the efforts of contracting individuals towards the satisfying of consumer preferences.

In that sense ‘capitalism’ is dying, and fast. The size of the average American company is down from twenty-five employees to ten in just twenty-five years. The market economy is evolving a new form in which even to speak about the power of corporations is to miss the point. Tomorrow’s largely self-employed workers, clocking on to work online in bursts for different clients when and where it suits them, will surely look back on the days of bosses and foremen, of meetings and appraisals, of time sheets and trade unions, with amusement. I repeat: firms are temporary aggregations of people to help them do their producing in such a way as to help others do their consuming.

Nor can there be any doubt that the collective brain enriches culture and stimulates the spirit. The intelligentsia generally looks down on commerce as irredeemably philistine, conventional and lowering in its taste. But for anybody who thinks great art and great philosophy have nothing to do with commerce, let him visit Athens and Baghdad to ask how Aristotle and al-Khwarizmi had the leisure time to philosophise. Let him visit Florence, Pisa and Venice and inquire into how Michelangelo, Galileo and Vivaldi were paid. Let him go to Amsterdam and London and ask what funded Spinoza, Rembrandt, Newton and Darwin. Where commerce thrives, creativity and compassion both flourish.

Rules and tools

Even if the world is indeed becoming a more trusting and less violent place as it becomes more commercial, that does not mean that commerce is in itself either the only way to make the world trusting, or enough on its own to create trust. As well as new tools, there had to be new rules. The innovations that made the world nicer, it may be argued, are institutions, not technologies: things like the golden rule, the rule of law, respect for private property, democratic government, impartial courts, credit, consumer regulation, the welfare state, a free press, religious teaching of morality, copyright, the custom that you do not spit at the table and the convention that you always drive on the right (or left if in Japan, Britain, India, Australia and much of Africa). These rules made trustful, safe commerce possible, at least as much as vice versa.

The aborigines of Australia or the Khoisan of southern Africa lacked not only steel and steam when they first met Westerners; they also lacked courts and Christmas. Certainly, the imposition of a new rule has often enabled a society to capture the benefits of exchange and specialisation ahead of its rivals, and to better the lives of its citizens in moral as well as material ways. Looking around the world, there are plainly societies which manage their citizens’ lives well with good rules and societies which manage their citizens’ lives badly with bad rules. Good rules reward exchange and specialisation; bad rules