Apple, Google, Telsa; they’re cool, innovative, forward-thinking, technologically savvy, most important of all; they’re trustworthy. Governments, meanwhile, are archaic, bureaucratic, and distrustful, everything those forward-thinking corporations aren’t. This view is strange when you consider the role of corporations and governments in society.
Corporations are designed to maximize profits by selling products or services to society. They merely see people as consumers they can profit from. Governments operating within well-functioning democracies are mandated to create social value and often create laws and regulations that protect you from profit-seeking companies.
This view of an inept government on the one hand, and the friendly profit-seeking corporation on the other, runs deep.
Companies get praised when the economy is working well; the government gets blamed when it’s working poorly. Governments get blamed when prices go up; when they are cheap, companies and the power of competitive markets get praised. When unemployment is high, governments get blamed; when it’s low, companies get praised.
Why is there so much disdain for the government when they are on your side?
The evil government
Lying at the heart of government bashing is the fact-free markets are associated with individual freedoms. In the West, freedom of speech, freedom of expression, freedom of thought, etc., are the political foundations’ society is built upon.
Less government control over people’s lives is considered a good thing. The free market, at face value, seems to be compatible with political freedoms.
As a result, whenever the government is seen to be intervening, supporters of free markets will scream that it’s nothing other than socialism or communism! Those devilish words have become weaponized by supporters of free markets who will often use them to justify non-intervention from the government.
The reality is that companies and their profit-seeking ways are the things that, more often than not, create social problems. Governments spend their time cleaning up the mess. And yet, as soon as people hear media commentators utter the words socialism and communism, they are immediately up in arms, fearing some kind of invasion from the Red Army.
The narrative is often blurred intentionally. There are plenty of reasons why, and they are all beneficial to corporations who want to you trust them while feeling distrust for the government.
Government bashing started to ramp up in the 1980s when Ronald Reagan came to power. Reagan began implementing an economic doctrine now known as neoliberalism.
Neoliberalism argues that it is free markets that deliver efficient social outcomes. The idea is that the less government’s influence on the economy, the better. Deregulation, lower taxes, privatization, cuts to the welfare state. All lead to a much smaller government that has far less influence on people’s lives.
This is great news because it allows private companies and rich individuals to thrive in the free market.
Free markets (so it is argued) lead to positive social outcomes because thriving markets stimulate economic growth. More growth leads to increasing incomes and a rising tide that raises all boats. It stands to reason then that when the economy is working well, governments are essentially taking a backward step and allowing markets to control themselves.
When the economy is doing badly, the meddling government has too much influence in the market—resulting in negative social outcomes like inflation or unemployment.
The thing about this argument is that it is totally untrue — if anything, the opposite is the case.
When myths become truths
Unemployment is a perfect example. Within free markets, supply (so it is argued) will always meet demand, so in theory, markets create perfect competition. If this were the case, unemployment would be impossible.
The reality is that, as we all know, unemployment is very much possible in free markets economies. The issue, argue the neoliberals, is the meddling government.
Intervention from governments implementing minimum wages or trade unions fighting for workers’ rights distorts the perfect competition there would be if these meddling forces had not intervened.
So what’s the solution? To lower wages, of course. Reducing wages will encourage companies to hire more people. But, while some companies may employ a few more people, those people may be worse off because they are working for wages that are so low they can’t pay the bills.
On top of this, profit-seeking corporations aren’t motivated by employing lots of people. Ideally, they want a small workforce, earning as little as possible. Fewer workers mean lower wages, which minimizes costs. Reducing costs helps to increase margins, which is the goal of all corporations.
Bizarrely then, neoliberals blame government regulation for unemployment, the very thing that protects people from profit-seeking companies. While the profit-seeking companies that will do anything in their power to minimize the workforce and reduce wages are not blamed at all.
On top of this, corporations aren’t big fans of unions. They go out of their way to union bust and make sure employees don’t unionize. The reason has nothing to do with the fact unions distort perfect competition. The reason is that unions provide workers with an element of power. The stronger the union, the more demands workers can make to have better working conditions, higher wages, better insurance coverage, more holidays, etc.
Again, the corporation wants the exact opposite. They want to dictate the terms they provide to workers. And, when they do, they will provide the bare minimum because doing more than the minimum increases costs, which reduces margins.
The bottom line is that corporations aren’t your best buddy. They don’t do what they do to benefit you. They spend millions on advertising, working hard to create a connection with you, all so you buy their products. You merely serve a purpose as a consumer.
This doesn’t sound like the sort of entity we should be trusting. Yet, time and time again, people place far more faith in companies who exist to extract money from you, than governments who exist to support you.
What makes the image of the friend next door even worse is that 69 of the 100 wealthiest entities globally are corporations, not governments. Their power and influence are enormous, and they use that power to lobby governments to make sure governments do what they want them to do.
This is a major problem because corporations are not democratic institutions. They exert their influence for their self-interests, not for the benefit of society.
In a healthy democracy, it should be illegal for corporations to influence the government. The fact they can have such a powerful influence over legislation means many countries, particularly America, have become corporatocracies. Government decision-making now serves the needs of corporations, not the needs of society.
And so government itself supports the narrative that it is useless while corporations are angels because it also suits the government that people believe this. After all, they get backhanders to encourage free enterprise.
What’s going on?
How on earth are they getting away with this when their motives are staring people in the face? Well, a significant reason is the ‘free’ press. In free markets, the media can’t be controlled by the government. Heaven forbid because the government would spread propaganda and distort the news to suit their own agenda.
Competition in the media means propaganda seemingly doesn’t exist. The media seek to reveal the truth in an unbiased way. Yeah, sure they do.
The reality is that in a free market, wealthy individuals buy media agencies and control what is reported. That’s why 15 billionaires own America’s news agencies.
Do you think these billionaires are neutral in their opinions and attitudes? No, either do I. They set the news agenda, and they heavily influence the views and opinions that are broadcasted and printed.
Wealthy individuals favour free markets because the conditions in free markets allow them to become so rich.
Inevitably the ‘free’ press is highly influenced to serve the interest of a rich elite who want everyone to believe the government is inept. While at the same time believing companies are your best friends; people who can be trusted. The government, meanwhile, lies, is evil, and is always out to get you.
The tragedy is that the mass media has done a brilliant job at pulling the wool over people’s eyes and getting them to believe anything positive is due to the market; anything negative is due to the government.
More often than not, the opposite is the case, but so long as powerful individuals control what people read and see in the news, they will continue to be fed the lie that companies have your best interests at heart. Remember the next time you see a corporation as a ‘friend’ they may be hiding a knife behind their backs, ready and waiting to stab you in the back.