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Blowing Socks from the Poodle Fuss

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Douglas Rushkoff’s servings of word salad are indigestible.  If you can make sense of the title of this post, then you might be able to make sense of Rushkoff’s work.

Here’s another howler from his new book, Throwing Rocks at the Google Bus [2]; it appears on page 131:

When monarchs and their favored merchants founded the first corporations, the idea that they would be obligated to grow didn’t look like such a problem.  They had their nations’ governments and armies on their side – usually as direct investors in their projects.  For the Dutch East India Company to grow was as simple as sending a few warships to a new region of the world, taking the land, and enslaving its people.

If this sounds a bit like the borrowing advantages enjoyed today by companies like Walmart and Amazon, that’s because it’s essentially the same money system in operation, favoring the same sorts of players.

WHAT??!!!??!!

The operation of the Dutch East India Company as described by Rushkoff doesn’t sound to me anything like – not a bit like – not remotely like – not even in a drunken stupor would it sound like – “the borrowing advantages enjoyed today by companies like Walmart and Amazon.”

One can only guess what fantastical fictions Rushkoff has in mind when he pecks out such a string of words.  Does he believe that Uncle Sam threatens to torpedo banks if they don’t lend money to Amazon at below-market interest rates?  Is he saying that Wal-Mart uses the state to enslave people to work for it and that this system of slavery gives Wal-Mart “borrowing advantages”?  Is Rushkoff arguing that Amazon and Wal-Mart are successful only because, or chiefly because, Uncle Sam is a direct investor in these companies?  Is Rushkoff aware that neither Amazon nor Wal-Mart enjoys a government-granted exclusive privilege to ‘serve’ its market?  (Indeed, because both are retailers, Amazon and Wal-Mart compete against each other for consumer patronage!)  Who knows what Rushkoff means?

Rushkoff carelessly equates the general corporate form – which evolved into existence in the 19th century [3] – with government-created and subsidized monopolies.  And absurdly he alleges that the success of corporations such as Wal-Mart and Amazon is based upon theft and slavery.

While some corporations today do receive special, unjust government favors, these are not typical.  Since the 19th century, the creation of a corporation required no special governmental act.  And incorporation today does not come along with monopoly privileges of the sort that were enjoyed by the Dutch East India Company.  Incorporation certainly doesn’t entitle the corporation to deploy, or to have deployed on its behalf, the government’s armies or warships.  It is historical ignorance of unacceptable magnitude for Rushkoff to conclude that the origin, nature, and operation of government-created incorporated monopolies such as the Dutch East India Company inform us today of the origin, nature, and operation of companies, such as Amazon and Wal-Mart, that are incorporated under general incorporation statutes.  The two sorts of corporations have almost nothing in common.

I need not say it, but I’ll say it nevertheless: neither Amazon nor Wal-Mart enslaves workers or has Uncle Sam enslave workers for these companies’ use.  (Employing low-skilled workers at low pay – employing workers who perhaps have no better employment options than at Amazon or Wal-Mart – is emphatically not slavery.)  And while perhaps these companies have sometimes benefitted from the unjust use of eminent domain, the successes of Amazon and of Wal-Mart are not based upon such land-grabs.  The success of these companies is based upon the successful innovations that they’ve each made in reaching and in serving retail customers, and in managing their supply chains and inventories.  None of these innovations was done with government force deployed specially for their benefit.

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