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Democracy and Corporations

Democracy and big corporations

In a previous article I spoke rather harshly about big corporations and the effect they had on South Korea. So what I am going to say in this article might seem surprising, but I will do my best to explain my logic.

I believe that the big corporations are the most democratic institutions in the world. This sounds a little crazy, especially considering how special interest lobbying distorts politics away from the needs of citizens towards the “needs” of massive corporations. But here is my logic.

In the previous article, I talked about how small swing voter blocs have a lot of political power. I also mentioned how slim the margins are for election results. But also, I talked about how the politicians are trying to get 51% of the votes. On one hand, it makes sense to try to get more than 51% of the votes because you may construct a perfect plan to get 51% of the votes and figure out all the different voting blocs you need to get that number, but then your opponent or just reality can throw you a curveball and your plan won’t be a reality. But on the other hand, there really is no point to get more than 51% of the votes, because if a President or a Prime Minister has a majority government, then their party can pass whatever laws and resolutions they want.

But big corporations work in a different way. A big corporation doesn’t just want 51% of the market reach. A big corporation wants 100% of the market reach. This is because each percentage point translates into millions of dollars. This is especially true because big corporations have such slim profit margins. The most profitable corporations usually top out at around 20% of their earnings being profit – the rest goes to cover expenses. So a company expanding it’s market share and earning a million dollars more means that “only” about $200,000 of it is profit, which is split between the share-holders as dividends.

So corporations doesn’t play the same game as political parties do. A political party can disregard the interests of their opponents’ core group, and it can act against those. But a corporation is always trying to increase it’s reach and get everyone’s money. Which means that a corporation is always trying to make decisions that make everyone happy.

This is why despite Jews being a very small percentage of the population, you will find the “kosher/pareve” symbols on almost every food item – because it’s easy to certify a food as kosher, and it brings in enough money to cover the cost and create a profit.

If corporations are so democratic, then why are they so awful? The real answer is that we allow them to be awful. Amazon for example is notorious for having awful working conditions in their warehouse – for example, it is one of the most dangerous places to work in the US. Many people know about this and agree that it’s awful But they still will use Amazon for their purchases, and in the end, that’s the only thing a corporation like Amazon cares about is if it makes more or less money.

Every time we open up our wallets, we are making votes – votes that really matter and which really count

Adopting the mentality of voting with your wallet is important step towards reigning in corporations. Of course, just one person doing this isn’t enough. But our attitudes and behaviors are contagious. Not only that, but we have the power to organize and to send out a message to the corporations, and declare boycotts. This is one of the more important aspects and I will be covering examples in future articles. It’s not enough just to “vote with our wallets” but we must also make sure that the big corporations understand what is happening and why, and it must be made clear for them what will end a “boycott” as well.

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