One of the most disturbing revelations of our time concerns the close connections between major corporate providers of media/tech and government. Many people suspected this had developed over the decade, but court discovery and Freedom of Information Act requests have absolutely proved it. Government agencies are deeply entangled in determining policies and content at every level.
These are questions that should be answered decisively by the court. Quite simply, the answer is that government cannot do these things. To use its power to curate the content of media and tech directly contradicts the First Amendment. We hope that the court sees it the same way. If not, every government agency will have a license to trample on free speech all it wants, forever.
Now, let’s complicate the picture slightly. When Elon Musk took over Twitter, he found a company that was effectively acting as an arm of the state. It had FBI employees embedded everywhere. Many employees, even most, were working directly with agencies and third parties to deceive consumers. How so? The platform advertised itself as a place to communicate with others, but the algorithms were tightened daily to amplify government-favored views and throttle alternative views.
Was this a coercive system if the company was in full agreement with what it was doing? And how did that agreement come about? Obviously, a private business might agree to work closely with the mob, but if it had a choice otherwise would it still do so? The picture gets murky as the corruption grows. This is what happens under a corporatist system. Business and government become hand-in-glove, but which is the hand and which is the glove can be quite obscure.
The pharma industry is a paradigmatic example of this. It provides the revenue that the Federal Food and Drug Administration (FDA) relies on to fund its operations, and the administration pays back that benefactor by approving drugs that could never pass objective trials. These same companies concoct new positions, get patents granted for them, and then share royalties with government officials. And these same agencies closely consult Pharma companies on recommendations to the public.
This is an extremely nasty business. It is great for Pharma. It is great for government. It is terrible for the American people. The answer in this case is pretty simple. We need a complete repeal of all the legislation that enabled this: 1980, 1986, 2006, and so on, even going back to the founding of the FDA and the Centers for Disease Control and Prevention themselves, because history shows that this sort of thing goes back a long way. Pharma needs to be vulnerable to liabilities for the damages from its products. And I agree with Robert F. Kennedy Jr.: Until all this is sorted out, Pharma advertising needs to be restricted because every media organ is now working on behalf of these companies.
How can we build a wall between business and government so that we have free enterprise again and government sticks to its constitutional limits? That’s an interesting question. These days, most businesses rely on publicly traded stocks, vast leverage, and a cooperative banking system. The financial networks created thereby have woven an intricate web of corruption and mixed-up signals that have upended the very operations of capitalism itself.
A quick story in the process of rethinking all of this: Years ago, I became attached to a small barbecue joint in central Texas. It was managed by a man who learned the craft from his father. He is now gone from this earth, and his son, in turn, runs the place with the help of his younger brother and sister. They are training their own kids.
Every day, there are lines out the door at lunch. All afternoon people are lining up to buy barbecued sausage, brisket, and more. The customer base is intense and devoted. One day two years ago, I asked the son why he doesn’t open more stores because, quite frankly, his place would obviously make a great chain.
He immediately dismissed the idea. He said he was perfectly happy operating with one store. He has no debt. He can monitor quality. He gets satisfaction from seeing familiar happy customers. He doesn’t want change that would threaten what his father and his father before him built. I left thinking he was missing an opportunity. I’ve begun to change my mind on this point.
Just this past weekend, I was at a small farm with some cows that give milk and with a small store that sells that milk without pasteurization. By the time I arrived, it was all gone. The farmer explained that people start lining up for it an hour before she opens the padlock on the barn door. Then it all sells in an hour. She has none for the rest of the day.
I asked why doesn’t she expand the operation. Her answer was the same as the barbecue owner’s. She doesn’t like debt. She likes her steady customer base. And she likes to monitor the quality. Why expand if she doesn’t want to? To stay small is surely her right under the free enterprise system.
In the past couple of years, I’ve met many small-business owners who feel the same way. They are happy with their small operations. They don’t want websites. They don’t want to ship things. They don’t want to go into debt. They don’t want to become major operations. They like things as they are.
Neither of these institutions is corrupt. They do what enterprise is supposed to do. They operate for their customers and make money by providing excellence to them. This is enough. God bless them.
Two weeks ago, I spoke to the designer of a once-major clothing manufacturer that has since become far less known, even having reduced itself from global distribution to become a small boutique specializing in bespoke suits and shirts. I asked what happened. He said the venture capitalists once swooped in and gave a go at becoming the new Ralph Lauren, but they demanded all sorts of compromises in quality that the original owners did not want. After a few years, they pulled out, and the company went quickly from very large to very small again.
This is how it works. The “angel investors” are only called that. It’s a deployment of sarcasm. In fact, once they gain a controlling share, you lose control of the company. Then, once you deal with major leveraged finance, you have to chase revenue at an ever-increasing level. You turn over the management of the company to financial firms. If you take your stock public, the money is good, but to keep it that way, the business loses its original character.
Hardly anyone understands this when they first start with the entrepreneurship business. Every amount of VC funding, bank loans, and outside investor interest generally means a change in the way the business operates. This is the bane of so many large companies. So dependent are they on BlackRock, Fidelity, and State Street that they end up disregarding their customer base. One thing leads to another, and eventually, they find themselves caught up in a web of control that involves big government, high finance, and endless juggling of interest groups.
Honestly, who needs it?
I’m ever more sympathetic to those entrepreneurs who pursue a more principled route: service customers, make a clean profit, pay your own way, and provide excellence and quality first. This seems like a path that many businesses should follow. It’s not always about expansion. Sometimes just serving a great sandwich or selling a gallon of raw milk is enough.
The trouble, of course, is that such businesses always have their market share threatened by the leveraged firms, unless the customer base is aware of what is happening.
Obviously, the only long-term answer to the problem of corporatism is to abolish all government agencies not mentioned in the Constitution and restore sound money so that the whole of leveraged corporate America can wean itself from living beyond its means. Until that day, maybe we should all work on shopping small, getting to know honest merchants, and trading only with businesses that don’t find themselves embroiled with our oppressors.
Coda: I run a nonprofit organization. Everything I said above about the for-profit sector applies here too. We have zero interest in becoming Bill Gates Foundation, United Way, or one of those D.C. think tanks with palaces on Capitol Hill. We are happy being small and doing great work that makes a difference in the world. The whole point of a nonprofit is to make the world a better place, not pad our nest and institution-build. Fortunately, this does not reduce the influence—just the opposite. More and more, we can tell the difference between institutions with integrity and those that are merely serving the ruling class.
