About a year ago I was reading a blog post at Dry Creek Chronicles and had a conversation with two friends about why I don’t shop at Wal-Mart anymore.
I explained to my friends that it’s about community. When I shop at Walmart, I am not encouraging the local economy. My products are made in China or shipped in from Chile, and the employees that are serving me are making minimum wage (if I get served at all—you can get in and out of many stores now without having to interact with a person with the “self-check� lanes). Very little help to the local economy.
I contrasted that with my own vision of how a local economy used to work (as I understand it) and how it could work again. I would like to open a restaurant when my boys get older. A restaurant is one of those businesses that depend upon local business. People rarely drive 100 miles to come to your restaurant—no matter how good the food is. If I go into the local hardware store where I’m waited on by the owner or one of his workers that gets paid well above minimum wage, I am investing in my restaurant. These guys now have more money than that Wal-Mart employee to spend, and more incentive to spend it locally (because they survive the same way—from local business). If they choose to buy their groceries from the last independent grocer in town instead of the big chain, they continue the chain of dollars and interdependence that makes for a community.
If all of these workers decide to “save money� by shopping at Wal-Mart they may someday find that Wal-Mart and those companies like it are the only employers left in their city.
There are other reasons I don’t shop at Wal-Mart, but they are not germane to the topic today.
The blog at DCC, however dealt with the other side of this. We have very few self-owned businesses left in our nation. What we have is joint stock corporations, predominately made up of passive investors. Saenz traces the history (in brief) of this development and ends up being unsure of what he should think of it. He references two books, Ideas Have Consequences by Richard Weaver and The Company: A Short History of a Revolutionary Idea.
I don’t want to repeat the content of Rick’s post here, but I wanted to add something to it. The key to the joint stock corporation is the limited liability of the investor. The investor doesn’t have control over the corporation and so his liability is limited to his investment. Meaning if the corporation commits a great crime due to negligence of the managers or whatever his other personal assets cannot be touched.
I am convinced that this is unethical. At present, I can form a Limited Liability Corporation (LLC) that only is me, or a few investors who do have control over the corporation. That means if I open a restaurant as a LLC and then food poison several hundred people in a given night all I can lose is the restaurant. None of my own assets can be touched, no matter whether that is just or not. The litigiousness of our society notwithstanding—I find that to be over the top. I do something wrong and the person to whom I did it wrong has little to no recourse against me, the person who did something wrong. That’s because it’s not actually the person me who “did the wrong� but the corporation me who “did the wrong.� And the “corporation me� has a special get out of jail free card from the government called LLC. I file chapter 7 and I go home and my house and savings are untouched by my negligence.
This too, works against community. If I am not responsible for the consequences of my actions then my incentives to run my restaurant well are diminished. The system also favors heavily the giant corporate structure of the fast-non-food restaurants rather than the local guy who is running the restaurant in order to feed his family and to serve his community.
Businesses should exist, not merely to make profit, but to serve. And when one provides a legitimate service that people need and are blessed by then making a profit comes easily.
As Christians we need to reconsider this recent innovation called the corporation. And as we strive to form communities we need to think about how to depend upon one another rather than big corporations whose self-interest is not tied to the local community.