Monday, November 21, 2011

Do Corprations Have Too Much Power?

Many people (like many in the Occupy Wall Street movement) think so. If they do, a good question to consider is why?

An interesting story on Tech Ticker should give one pause before swallowing the line that corporations are powerful to control consumers. They document 15 disastrous product introductions that were quickly killed. The list includes the infamous new Coke and most recently Netflix's abandonment of Quickster before it even began.

If, as people like John Kenneth Galbraith used to claim, corporations do have tremendous power to force people to buy their products by shaping their demand, it is hard to explain such flops. Perhaps corporations are not all-powerful after all. In a free society, the only way for corporations to reap profits and maintain market share is to more successfully satisfy customers.

If, however, a corporation receives special privilege from the state, it is clear that we are not in a free society. In such circumstances, a favored firm would be able to reap profits without serving others. The root of this problem is the granting of state privilege, not the existence of the corporation per se.

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