Infernal Ramblings
A Malaysian Perspective on Politics, Society and Economics

Governments and Corporations: Two Sides of the Same Coin

Written by johnleemk on 2:15:24 am Jan 29, 2009.
Categories: ,

Corporations and government have been getting a pretty bad rap lately. Progressive commentators have vociferously blamed corporate greed for the ongoing recession; their conservative counterparts have drawn attention to government waste and oversight as equally important factors in mismanagement of the economy. But for all the ink spilled in this debate of corporations versus the government, is there really anything innately bad — or good — about either of these things? A corporation and a government are nothing more than different ways of organizing human beings for some form of collective action; there is nothing to suggest that by definition, one mode of organization is absolutely superior to the other.

In reality, both corporations and governments are actually fairly greedy and wasteful. If you are the head of a government department, you probably won't win any favors by consistently spending less than your allocated budget. If you are the head of a corporation, your board of directors probably won't be too happy if you let your workers spend 10% of their time at work on things which have nothing to do with business. But if this is the case, why rely on the corporate or public sectors at all?

Critics of corporate greed should ask themselves why we don't hand over all economic functions to the government instead. The reason we don't have a government baker or a government automaker is that at some point large organizations — like the government — are just too big to function well. Yes, life sucks when the execs at Goldman Sachs mess upóbut how much worse would it be if Goldman Sachs was the government? A well-known professor in my university's economics department once compared the Soviet Union, with its totalitarian government, to nothing more than a very large corporation — I hope the parallels are obvious.

Likewise, those who are against any government economic activity need to make a good case for handing over all of government's functions to the private sector. It isn't profitable to feed the poor or take care of the mentally disabled, so why should we expect the corporations of the world to take up these problems? Unless you really believe that letting people starve in the streets is a fantastic idea, you have to admit that we need some level of government action. Of course it is terrible that so much government money goes to waste on all sorts of unproductive things — but if we cannot disentangle the corrupt and wasteful from the uplifting and ethical, is that an argument for getting rid of government altogether?

What critiques of government and corporate wrongdoing often overlook is that these are nothing more than organizations. An organization is only as strong as its people are. If an entrepreneur makes toys in his garage, we call it a heartwarming story. If he hires a bunch of people and makes toys in his factory, we call it a heartless corporation. If the Salvation Army or the local veterans' organization asks us for charitable donations, we give without a second thought. If the government takes our money to pay for soup kitchens or body armor for the troops, we grouch about taxes and government waste. At heart of it in each case is a bunch of individuals doing what they love and what they think is right. It is no more accurate to say that Microsoft is greedy than it is to say that the federal government likes to wantonly spend money.

It is, however, quite accurate to say that people can be greedy, that people can like to wantonly and unnecessarily spend money. But because it is hard to stamp out the impulses we inherited from our ancestors living in the plains and jungles of Africa, we prefer to take the easy way out and blame simple organizations for our woes. Yes, it is hard to deal with the various vagaries of human behavioróbut when we deal with these problems head-on, and learn how to structure our organizations in productive and efficient ways, we create more effective corporations and a more effective government. And isn't that what we really ought to be doing?


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Infernal Ramblings is a Malaysian website focusing on current events and sociopolitical issues. Its articles run the gamut from economics to society to education.

Infernal Ramblings is run by John Lee. For more, see the About section. If you have any questions or comments, do drop him a line.


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