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July 13, 2004



Might be helpful whenever you use "Progressive" as synonymous with Taylorism and management by objective and results, if you also think about business management by objective and results, as in the paper by Charles Koch you lent me on The Science of Liberty. What you are creating, I think, is a critique of MBA-Logic, and you may find yourself in a whole new set of friends. Many of us are engaged in this task. To critique the rise of Progressive "command and control," without critiquing corporate models of command and control is, surely, to be blind in one eye. See Dave Pollard and Jon Husband at Wirearchy for "the rest of the story." http://blogs.salon.com/0002007/
"Eco-systems," "Self-organizing systems," "networks," and "emergence" might be among the countervialing terms, in contrast to hierarchy, command and control.

Lenore Ealy

Thanks, Phil.. Indeed. I think the Koch's pioneering work on market-based management takes us in positive directions, without throwing the baby out with the bath water.

My problem with a lot of the critique of the modern corporation emerging from little "p" progressive circles today is that it doesn't seem to offer much in the way of constructive alternatives for how people organize to conduct business. It's a nuance, I suppose: Corporations are BAD, which is where much of the rhetoric takes us. VS Corporations can be better. My take is the latter.

Corporate forms of organization have done tremendous good for us. Corporations and the people in them have also done bad things. We need more discrimination in the way we use these terms. What are most nonprofits if not corporations!?

If the critique is really about profit-taking, we should cut to the chase and discuss that. My work with Dick begins from the premise that even our favored Austrian economists such as Hayek and Mises didn't see beyond command and control in examining the internal affairs of firms. I think we are in a better position to do so today, but that creating the constructive alternatives will be obstructed if we don't find ways of dealing with the core issues of property and profits.

I think, by the way, that Jon Husband is very thoughtful on these issues, and my goal would be to increase the number of folks with whom he can engage in these conversations. The conversation is the thing..


The difference between engineering and design is about the same as the difference between the kind of values or wisdom centered philanthropy that is part of Phil's GiftHub vision and what the tax and legal advisors do to conform to the law (ideally) and preserve capital. It's about what and why as apposed to how.

On the corporation, we can leave aside for now whether corporations have been a net good or bad, and just talk about their improper influence on the political process. Corporations are not people, they are not citizens and do not have the rights of citizens. With the way our elections are financed, corporations buy access to the polititians and get all the legislation money can buy. Our constitutional system was never intended to work this way. Maybe you should watch "The Corporation" (Jon has references to the video and reviews, I think) and then tell us what you think about corporations.

Lenore Ealy

thanks, Gerry! In all seriousness, I look forward to better understanding design as an alternative to engineered "planning."

On the issue of corporations, this is helpful. So at the core of the complaint is our campaign finance laws rather than the usefulness of the corporate form of organizing collective enterprises or coordinating plan fulfillment in the market place? If that's what we're really discussing, then I think we are closer than we expect in our assessments.

My libertarian friends have serious critiques of these very phenomena under the terms "corporate welfare" and "rent-seeking." See here for example. {I tried to manually make that a link, but it didn't work it seems} http://www.cato.org/pubs/pas/pa241es.html

We don't say, however, that corporations are bad. We say rather that "corporate welfare" must be avoided. And to the extent that "Big Business" diverts funds into rent-seeking political activities, I can stand in equal critique.

The economics glossary at The Economist website defines rent-seeking like this:

Cutting yourself a bigger slice of the cake rather than making the cake bigger. Trying to make more money without producing more for customers. Classic examples of rent-seeking, a phrase coined by an economist, Gordon Tullock, include:

• a protection racket, in which the gang takes a cut from the shopkeeper’s PROFIT;

• a CARTEL of FIRMS agreeing to raise PRICES;

• a UNION demanding higher WAGES without offering any increase in PRODUCTIVITY;

• lobbying the GOVERNMENT for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or consumers or some other rivals.

Whether legal or illegal, as they do not create any value, rent-seeking activities can impose large costs on an economy.


It seems to me, then, that what is REALLY at issue here is not our economic forms of corporate organization but our political arrangements that reward rent-seeking. FREE markets to me do not mean that corporate welfare prevails. They mean that corporations must be disciplined by the unimpeded forces of profit/loss. The regulatory answer is a legitimate, but essentially unworkable answer to the problem, since increased regulation exacerbates rather the rent-seeking behavior that initiates the vicious circle.


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