Capitalism vs. the Second Commandment: Part II

The point of that long explanation of idolatry is that I think the role of capitalism in modern society can be thought of in terms of idolatry. The market is our golden calf. The problem is not the idol itself (the original calf was probably very pretty) so much as our relationship to it.

One common complaint about capitalism, and particularly about the multinational corporations that are the archetypal examples of capitalism in action, is that there's no accountability. In the extreme case, a portrait is painted of corporations running rampant over the world, with people and governments as little more than puppets made to dance by the propaganda, coercion, and dollars of Coke or Shell. However, I think even the most multinational of corporations is still critically accountable to at least three parties: the state, its stockholders, and its customers. The abdication of these parties' roles in holding corporations accountable is due in part to their idolatry.

Many of the excesses of corporations are due to collaboration with governments. The dominance of giant agrobusiness in the US is supported by agricultural subsidies. Deforestation in Brazil is made profitable for ranchers by government help. Corporations are able to exploit people and nature because the state creates spaces to allow that to happen, and in many instances specifically subsidizes capital's dirty work, or even directly carries it out. Corporations are greater than governments because governments made them that way. They engaged in idolatry by allowing capitalism to use the state, rather than the state using capitalism. Capitalism and development became ends in themselves, rather than means to making certain improvements in citizens' standard of living.

The most crucial accountability of corporations is to their customers. Classical economics makes this the foundation of the case for capitalism -- the market will favor enterprises that are socially useful because people will only buy products that are wanted. Corporations are powerful because they wield substantial chunks of money. But that money doesn't come from nowhere; it comes from millions of customers. To hear some critics tell it, corporations can easily produce all the demand they need through advertising propaganda, duping people into making purchases that are good for the corporation, rather than for the buyer or society as a whole. There is some truth to this, and it's important to remember that demand isn't an independent variable -- it's shaped by the process of production and marketing, just as voter preferences are shaped by the process of politics. Yet we should also not underestimate the importance of extra-corporate cultural forces in shaping demand, and hence holding the power of the market over corporations. Even the mighty Coca-Cola wasn't able to make people like the New Coke. Organized boycotts and publicity campaigns have pushed McDonald's to require higher animal welfare standards of its suppliers. Oil companies are starting to put on a green face for customers, grudgingly conceding the fight against the science of global warming. Obviously, such incidents are not common enough to set things right. There is idolatry at work here, too. Customers implicitly or explicitly surrender to the market, allowing it to rule them.

Saying that there's idolatry at work doesn't do much in the way of revealing where it came from, or how to root it out. There are a host of sedimented structural factors and collective action problems at work that unfortunately my latest brainstorm didn't untangle. Perhaps sometime down the road I'll have a part three in this series.