Some interesting points, erl, but I think you may be missing an important issue in the debate whether business regulation should be partly the domain of government or left entirely to workers and consumers. Namely, government does what consumers and workers can’t do, which is to make regulatory laws that are applicable to businesses in general. Unless you want to give that power to workers and consumers directly (how?), you are setting up a situation where every single infraction by every single employer/producer has to be countered with a separately initiated strike and/or boycott, organized and maintained by people who (as noted earlier) are mostly not compensated for it and are often risking a great deal in order to do it.
You personally may feel that government is completely impotent in regulating businesses; however, businesses themselves, judging by their complaints about bureaucratic interference, don’t seem to think so. There is certainly room for improvement in citizen oversight of government, but I don’t think we should kid ourselves that we the public will find it easier to monitor many thousands of individual businesses than to oversee several hundred representatives and a couple dozen regulatory agencies. Your suggestion of eliminating the contemptuously-named “babysitters” simply means that we citizens would have much less power than we do even now.
- [Frank:] The logic of business is coercion, monopoly, and the destruction of the weak, no “choice” or “service” or universal affluence.
This is on page 87 of the book. I think it is very important to the discussion at hand, which is more or less the idea of how we think about economics, and it certainly demonstrates that Frank comes at the subject with a huge chip on his shoulder. The “logic” of business is no more fascist than the “logic” of redistribution is socialism. There is absolutely no reason why a business couldn’t be philanthropic and redistributive on a medium or even high scale.*
I agree that the statement is pretty one-sided, and that there are often plenty of logical market-based reasons for businesses to provide things like “choice” or “service”: if providing consumer choice or good service will make a profit, that’s a powerful incentive for a company to provide it. But if the company can make more money with worse service and anti-competitive practices, the market incentive shifts to that strategy instead. Individual businesspeople and companies may still prefer to put the customers’ or workers’ needs first in such cases, but if they choose to do so, then they are making decisions based on extra-market values. The sole market incentive is the maximization of profit.
Recall that Frank is taking a deliberately combative stance to provide what he sees as a needed corrective to massive corporate PR efforts to portray the market as naturally democratic, intrinsically beneficial, innately a force for good. It isn’t; it is a completely socially-amoral engine for maximizing profits, and if “coercion, monopoly, and the destruction of the weak” will maximize profits, that’s the strategy the market will adopt. I agree that we need to bear in mind that the market incentive sometimes encourages useful corporate activities rather than destructive ones. But I think Frank’s point is that we’re in no danger of forgetting that aspect, because corporate PR is blaring it into our ears 24/7; what we need to remember is that markets in general are perfectly willing to reward destructive behavior too.
*I think the labor movement lost its power because it gave it up, flat out. It demanded everything and didn’t really provide much in return. *
I don’t dispute that greed, corruption, and indifference to quality have been big problems in a number of unions, and I don’t think there’s anything wrong with pointing that out. However, I think you’re overlooking other important factors in the decline of American unions, such as deregulatory efforts beginning in the 1980’s and increased capital mobility that shifted the balance of power further in employers’ favor. Businesses have always been in favor of the destruction and decline of unions—not because they evilly relish “coercion and the destruction of the weak”, but simply on the basis of the bottom line—and they have never ceased to push for it. Perhaps they could never have succeeded so well without labor’s own failures and betrayals, but that doesn’t mean they haven’t always been trying.
Is the threat of legal action so much more worrying to a CEO than the threat of a strike? Perhaps it is, it just doesn’t seem like it to me.
Well, considering that only about 10% of private-sector workers are currently unionized, while all businesses are (at least technically) subject to the law, legal actions are likely to affect more businesses than strikes will. Also, US labor law and regulatory oversight are notoriously weak, as noted in the article I linked to above; there are very few serious legal penalties that employers actually suffer for illegitimately retaliating against workers who attempt to organize or attempt to strike. So it’s quite rare that collective worker action actually gets far enough along to pose a real threat to an employer’s profitability. Perhaps if we had a stronger “social wage” system including income supports, basic services, continuing education, retraining, etc., workers would be less completely dependent on their existing jobs and would be less economically vulnerable in negotiating with employers.
*I think unions have dropped the ball, watched it deflate, and kicked it into the sewer. They became corrupt some time ago, and many corrupt branches still remain (unless the “right-wing” media is lying to me, too, which I supopse I must accept as fact within the context of the thread). *
Oh, we won’t demand that much of your liberal orthodoxy. 
But I do wonder, how much of what you think about unions is based on following their current activity, and how much is just part of a general cultural impression that is, naturally, partly mediated by business? For example, do you know who John J. Sweeney is? What do you think of his recent decisions? Do you know what the acronyms HERE and SEIU stand for, and what those organizations have been up to lately? In short, do you have actual evidence that would cause you to trust unions less than businesses, or is it mostly just a hazy impression?
In fact, it seems almost obvious that unions based on self-interest motivation (job security, higher wages, better benefits, more vacation time, etc etc etc) must fall prey to the same things that businesses do.
True 'dat.
*Are we to say, then, that we must rely on the good will of a small subset of men (the government) to perform the babysitting? But why couldn’t the government fall prey to the same thing as they scuffle to get reelected? Isn’t this a common critique of politicians? […] Corruption, lying, and scheming will poke their way into every venue. *
Egg-zackly. That’s precisely why, IMHO, it’s so important to maintain a reasonable balance of power between the different economic sectors: business, government, and citizen organizations such as unions and activist groups. Since they’re all scheming for different things, if they maintain reasonably equal relationships then they can police one another reasonably effectively. Also, I think there’s a lot to be said for various kinds of formalized power-sharing, though I think the current level of coziness between business and government is going too far. But I think it makes sense to include union leaders and citizen representatives on company boards of directors, and to have business input into local government, and so forth. That way, the broad groups can still check and balance one another but individuals can be less adversarial and gain a “stakeholder” sense.
*When businesses go bad we blame the CEOs, when governments go bad we blame the voters. *
You think?? I have never noticed people being too shy to criticize the specific politicians who were directly responsible for the decisions they don’t like.
Just because we live in a democracy does not mean a priori that our politicians are serving our interests.
Yup.
*That being the case, why would we rush to consolidate economic power in the hands of the political power? Especially when we take it for granted that “most folks” aren’t taking an active interest in the big picture? *
I don’t think anyone’s suggesting that economic power should be consolidated in the state; that would be to regress to a “command economy” of the sort that failed so badly under communism, and as I said earlier in this thread, I doubt anybody’s seriously arguing for that. What many of us—and, I think, Frank in particular—are deploring is that instead, the reverse seems to be happening: we’re consolidating too much political power in the hands of market interests, under the carefully-fostered delusion that markets are intrinsically, inevitably democratic and progressive and beneficial, and so we’re crippling the other sectors of society that should be exercising a restraining influence.
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It seems in both cases the fault is with the people who interact with this specific power set, or the fault is with the specific politicians as much as it is the fault of the CEOs. Just because we live in a democracy does not mean a priori that our politicians are serving our interests. That being the case, why would we rush to consolidate economic power in the hands of the political power? Especially when we take it for granted that “most folks” aren’t taking an active interest in the big picture?