The Lilliputians’ new ropes

There’s a dirty old joke about an ant and an elephant (#6, and another version), in which the ant grossly overestimates the elephant’s awareness of his, um, efforts. Until recently that’s been a pretty good model for the relationship between activists and large corporations. Big companies have been feared and loathed since the beginning, but the web is giving more heft to the rancor.

Big Business is Bad

I’m getting a first-hand sense of the antipathy towards large companies now that I’m outside the corporate cocoon. It’s very noticeable at universities, particularly in Humanities departments. (Engineering departments have a shot at raising money from corporations, so they’re more polite.) It’s a given that Big Business is Bad. Academics see themselves as fighting the good fight against behemoths that are immoral by nature, and amoral at best. Companies are heartless, ruthless, exploitative, and hostile to individual values and freedom. The ideological underpinnings for this animosity range from paternalism, to progressive/populist activism, to neo-Marxist suspicion of capitalism as such.

This is a broader phenomenon, of course. NPR fund raisers argue that the public should support their radio stations because they’re “not beholden to corporate interests”. Hostility towards Wal-Mart, Microsoft and now Google is a staple of the chatterati.

The population at large is ambivalent, and attitudes seem to be swinging against corporations. Take this conclusion from an October 2005 Pew Research Center study:

“Public opinion about business corporations has taken a nosedive, and favorable ratings for corporations are 20 points lower than they were in March 2001. The decline is seen across most groups in the population, with favorable views falling about as much among conservatives as among liberals. Indeed, in the current poll, just half (50%) of conservatives say they have a favorable view of business corporations.”

In 1985, favorable/unfavorable opinions about business corporations were divided about 60/30; in 2005 it was evenly split at 45/45.

A Pew study of the 2004 political landscape reports:

“There has been a small rise in the percentage of Americans who believe corporations make too much profit (62% vs. 58% in 2002). A declining number now say corporations strike a fair balance between making profits and serving the public interest (38% say that now, compared with 45% in 1999). And while there has long been overwhelming agreement that too much power is concentrated in the hands of big companies, a growing percentage completely agree with that statement (40%, compared with 33% in 2002 and 31% in 1999).”

From ambivalence to abolitionism

The ambivalence arises because most Americans work for corporations, but don’t enjoy the experience. It’s hard to run one’s own business; fewer than 10% are self-employed. Given an alternative universe, though, people prefer to work for themselves. Edward Castronova points out that there are few if any corporations in massively multi-player online games:

The economy consists of thousands of one-person firms, each with its own stock of capital and one laborer. It doesn’t have to be this way – one could very easily have explicit firms where one person or a group of shareholders hires groups of avatars to do work for them. But it seems that one of the attractions of the synthetic economy is that it can be designed so that everyone can be independent, can be their own boss. There is most likely a strong latent desire to do this. Certainly, Earth’s economy is not very strong on that point; there are too many risks to being an entrepreneur, and so most people work for others. Synthetic economies don’t need to operate that way and, in practice, such an arrangement has not been a popular design choice. [Synthetic Worlds : The Business and Culture of Online Games (2005) p. 186]

The antipathy might come from the work environment, but the animus comes from a legal construction. The notion of a company as a legal person is a 19^th Century innovation. And yet as a matter of fact, it’s a group of people, not a person… I often find myself switching between referring to a company as “they” and “it” in a single paragraph. The ambiguity is rooted in the very words we use; sometimes we talk about “a company” (literally, a group of people), and sometimes “a corporation” (from the Latin corpus, a body).

This makes it easy to criticize companies as immoral, heartless etc., and easy for executives to dismiss such claims. We feel that since a company claims some of the benefits of personhood, it should bear similar ethical burdens, whereas executives can argue that personhood is simply a legal fiction. (An extreme response to this tension is the movement to revoke corporate personhood.)

The elephant’s view

Most companies see the world in terms of suppliers, customers, and competitors. Those in retail see the public as actual or potential customers; others don’t see them at all. Companies usually don’t think of the public as antagonists. When companies do get into conflict with civil society, they denigrate their opponents as naïve, immature, unrealistic, idealistic, and irrelevant – a set of epithets no fairer than describing companies as heartless, ruthless, exploitative, and hostile to individual values.

While patronizing civil society may have been a viable strategy in earlier decades, it’s a dangerous stance these days. The Internet has given the public better information, and more ways to organize. It is undermining power structures, as when people out car shopping have already researched their purchase on the web, and know the dealer invoice price before they walk onto the lot. At the other end of the spectrum, SMS has helped topple governments, and global broadband enabled the Open Source movement which is reconfiguring the computer industry.

The contest

Political blogs, Napster, bittorrent, Craigslist and Linux represent some successful forays by “the edge” against “the center”. One can see the tussle as tension between two world-views that can be approximated by a variety of contrasts (thanks to Jon Pincus for these ideas):

• Structured vs. ad hoc
• Elitist vs. inclusive
• Commercial vs. non-market (or $$-market vs. new-market)
• Control vs. freedom

So in the end it’s not about an ant and an elephant – it’s Gulliver in Lilliput. And the Lilliputians have some strong new ropes: the web.