December 29, 2005

'Tis the season for grand furors over corporate actions: over Walmart's attempt to redefine all its job parameters so as to require some degree of physical labour (and thus render unqualified anyone with a physical disability, and thus possibly "high maintenance" medically); over Verizon Communications' abrupt across-the-board pension freeze, "breaking a decades-old promise to its own people;" even on an inter-nation scale, where the promise by Orange Revolution Ukraine president Viktor Yushchenko to establish international relationships based on market principles has suddenly veered back to bite him.

Are pensions sacred? but within this market-driven governmental structure, why should they be? To what extent can an "understood" contract possibly be considered inviolable, within a structure where it is shareholders who have the last word? As long as a government -- and the people who elected that government -- tacitly support hidden government subsidies to private enterprise, why shouldn't private enterprise take full advantage of what is made available? Still, if this kind of thing continues (and I see no indication that might serve as a controlled braking mechanism), employees cannot but stop trusting contracts -- and employers -- altogether. Why should any employee loyalty be expected? where there is none on the side of the employer? Loyalty became an outdated value with the first corporate downsizing. Nor can any entity stand clear once the first has taken the plunge: the more companies that break implicit "promises" in the interest of bettering dividends, the more pressure on the rest to "remain competitive".

In a market-driven economy driven primarily by civil contract law, growth of corporation is inevitable. Why should we be upset because a corporation allows itself to be shaped by the structure we ourselves have created?

you are exactly right. OUR LAWS shape corporations.

OUR LAWS grant monopolies.

OUR LAWS must change.

There's a saying, if you keep doing what you've been doing, you'll keep getting what you've been getting.
Markets are simply media of voluntary exchange. The economy isn't "market-driven"; the economy is driven by consumers in search of value, which they find through markets. Voluntary exchange is hindered by government when it restricts market transactions through laws that require union membership, licensing, and government-granted franchises (e.g., utility companies). Corporations, when left to their own devices -- but restrained by law from engaging in force and fraud -- are subject to competition (directly and through substitutes) and must deliver value in order to survive.
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