5) THE RISE OF BIG BUSINESS NEVER IMPOVERISHED AND ALWAYS ENHANCED THE LIVING STANDARDS OF ORDINARY WORKING AMERICANS. In their 1998 book, “The History of the American Economy” Gary Walton and Hugh Rockoff summarize the progress of the working class. From 1820 to 1860, wages grew at a 1.6% annual rate, while the purchasing power of an average worker’s paycheck went up between 60 [SPACE] and 90 percent (depending on the region of the country). Between 1860 and 1890 (that genuinely gilded age) real wages (adjusted for inflation) increased by a staggering 50% in America. The average work week shortened at the same time, so that the real earnings of the Average American worker increased more like 60 percent in just thirty years. As Thomas J. DiLorenzo points out in his illuminating book “How Capitalism Saved America,”: “Capitalism improves the quality of life for the working class not just because it leads to improved wages but also because it produces new, better and cheaper goods…When Henry Ford first started selling automobiles only the relatively wealthy could afford them, but soon enough working-class families were buying his cars.” The efficiency and productivity made possible by corporate organization gave typical Americans a range of choices and an economic power unimaginable for prior generations. As Federal Reserve Board economists Michael Cox and Richard Allen made clear: “A nineteenth century millionaire couldn’t grab a cold drink from the refrigerator. He couldn’t hop into a smooth-riding automobile for a 70-mile-an-hour trip down an interstate highway to the mountains or seashore. He couldn’t call up news, movies, music and sporting events by simply touching the remote control’s buttons. He couldn’t jet north to Toronto, south to Cancun, east to Boston or west to San Francisco in just a few hours. He couldn’t transmit documents to Europe, Asia, or anyplace else in seconds.

He couldn’t run over to the mall to buy auto-focus cameras, computer games, mountain bikes, or movies on videotape. He couldn’t escape the summer heat in air conditioned comfort. He couldn’t check into a hospital for a coronary bypass to cure a failing heart, get a shot of penicillin to ward off infection, or even take aspirin to relieve a headache.” In this context, jeremiads about the “horrifying” gap between rich and poor miss the point that poor people in America’s 21st century enjoy options and privileges that the wealthy couldn’t claim a hundred years ago. Far from oppressing the working class, the corporate system brought about a vast improvement in purchasing power for all Americans. The 1999 book “Myths of Rich and Poor” by Michael Cox and Richard Alm indicates that a worker in 1900 worked two hours and forty minutes to earn the cost of a three point chicken; in 1999, a mere 24 minutes of toil could buy him the bird. If anything, the growth in rewards for working only accelerated in the last fifty years. In 1950, typical workers put in more than two hours to afford 100 kilowatts of electricity; by 1999, the cost had dropped to fourteen minutes. A three minute coast-to-coast phone call cost 104 minutes of labor in 1950, but by 1999 that was down to two minutes (and it’s no doubt even less today).

6) THE INDUSTRIALIZATION THAT DRIVES PROSPERITY RESCUES RATHER THAN ENSLAVES THE WORKERS IT EMPLOYS. Adam Smith, who defined capitalism more than 200 years ago in “The Wealth of Nations,” described the essence of the system as a series of mutually beneficial agreements: “Give me that which you want, and you shall have this which you want.” This captures the essential fairness and decency of the free-market system, which relies on voluntary associations that enrich both parties. Concerning the process of industrialization, which saw millions of workers engaged in powering the mighty, productive engines of major corporations, the great economic Ludwig van Mises (cited by DiLorenzo) trenchantly observed: “The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them. It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation.” The same process applies to newly opened factories throughout the developing world today, despite the efforts by “anti-globalist” and “anti-corporate” activists in the United States to obliterate the only jobs that keep suffering millions from a return to misery and destitution.

7) CORPORATIONS DON’T DESERVE BLAME FOR “PUTTING PROFITS OVER PEOPLE,” SINCE PROFITS INEVITABLY BENEFIT PEOPLE. Corporations don’t exist in order to provide welfare for workers, or cheap products for consumers, but rather to earn profits for investors and operators. If they succeed in earning such profits they can provide more jobs at higher pay, and better products at lower cost. If a company fails at bringing in those profits it will shed jobs and provide fewer products – ultimately going out of business altogether. The idea that laborers or customers somehow benefit if a corporation feels squeezed, or facing shrinking profits, remains one of the profoundly illogical legacies of discredited Marxism. In the free market system, the boss Peter can’t benefit long term at the expense of his employee, Paul. They either prosper together or fail together. Increased profitability brings increases in capital that allow increases in productivity – directly and simultaneously rewarding management and labor (not to mention the public at large). Political demagogues who rail against “immoral” or “obscene” profits need courses in remedial economics. For a corporation, only a lack of profitability counts as immoral and going out of business represents the ultimate obscenity.

8) THERE’S NO LOGICAL REASON TO FAVOR SMALL BUSINESSES OVER BIG BUSINESS. A recent Wall Street Journal poll showed that the public felt more approval of “small business” than of “big corporations” by a ratio of more than three to one. This makes little sense, since virtually every “big business” started out as a small operation before success brought growth, and virtually every small business dreams of getting bigger one day. Not far from my home stands the original Starbucks Coffee stand (still operating) at Seattle’s Pike Place Market: an unprepossessing shop that couldn’t accommodate more than twenty customers at a time. Did that quaint operation do a better job providing coffee to its patrons than today’s multi-billion dollar, globe-straddling colossus? Any coffee connoisseur can certify that one of the major improvements in American life over the past twenty years involves the now universal availability of strong, delicious, gourmet coffee (and innumerable exotic derivatives), as opposed to the watery, flavorless blandness of the old-fashioned “cup of Joe.” Could any sane observer honestly believe that a small business could do a better job than big international companies in providing us with the automobiles and computers and cell phones and medical supplies that do so much to enrich our lives?

9) CORRUPTION IS MORE OF A PROBLEM FOR BIG GOVERNMENT THAN BIG CORPORATIONS. Since the beginning of the 21st Century a series of tawdry and hugely destructive corporate scandals (Enron, Tyco, WorldCom, many more) led the commentariat to conclude that business ethics had been hopelessly compromised and we needed to turn to government for redemption and purification. This assumption ignores the long history of hideous corruption in every endeavor of flawed humanity – including religion, education, charities and, most spectacularly, government itself. Giving government greater power over corporations increases rather than reduces the likelihood of corruption, since so many of the prior business scandals involved existing entanglements of bureaucracy with the free market. When political office holders decide winners and losers in the business world, the temptations for bribery and favoritism become more acute, not less so. Moreover, the public enjoys greater and swifter recourse against an abusive or inefficient corporation than it does against an abusive or inefficient government. The customer can always decline to patronize a business, a product or a service he dislikes, but with a dysfunctional government you’re stuck till the next election – or long after that, in this era of entrenched and immovable bureaucratic power. A determined individual can escape the reach of even the most ubiquitous corporation (yes, even our Seattle neighbors at Microsoft) but the only way to choose for yourself a different national government is to flee the country. Yes, corporate power frequently corrupts government, and government power even more frequently corrupts and warps corporations, but the best way to avoid this mutually destructive influence is to bring about less bureaucratic involvement in the free market, not to insist on more.

Despite all the shortcomings and silliness, bureaucratic bungling and bankruptcies, foreclosures and failures, conniving and corruption, the big corporations that inevitably emerge in free and fair markets continue to perform remarkably well in terms of giving the public what it wants and needs. Our daily lives bear wondrous witness to the amazing achievements and efficiencies of the system. Any honest examination of the past and the present must lead to the conclusion that major corporations in their appropriate pursuit of profit will continue to bless, not oppress, the people of the United States.