I have to say, your arguments about whether or not capitalism is an efficient system to produce and fairly distribute wealth is much beside the point of my piece. I cannot say that I am well versed enough in economics to judge the veracity of your statements, however I can speak to your flippant dismissal of the central theme of this article.

The article is about how information availability forces corporations to acquire something like a conscience. The idea is that in a transparent society, shame is a more powerful motivating factor than heavy handed (and, I know enough of economics to say this: inefficient) government regulation. There are many examples I could give to illustrate my point, but consider these two:

1) Computer companies increasingly offer end-of-life recycling services for their machines. Apple Inc., however, does not. Apple is currently facing a growing wave of criticism over this lack of environmental stewardship, and will be forced to alter its practices quite soon.

2) Terrapass, a company that I’ve discussed at length in these pages, is overseen by another corporation whose purpose is to verify that the services promised are actually being rendered.

So, here we have two examples of the power of a transparent society. In the first, grassroots movements will eventually shame Apple into changing its ways because a negative image will affect its brand, and thus its bottom line. In the second, corporations provide oversight for other corporations. One could, of course, ask who is overseeing the overseers? Well, at some point that accountability falls upon the populace, just as it does in a democratic government.

Again, thanks for your comments, I wish I was better able to address the meat of them. I believe that perfect transparency would change corporate behavior, just like it does governmental behavior. I don’t think the day when the need for government oversight will disappear is near by any means, I just think that it is theoretically possible that it may someday.

Moreover, your rather apologetic summary of the case for laissez-faire amounts to “voting with dollars” and has all the known problems - it gives more market power to the unethical to begin with, including those who are in effect fencing for others who commit overt crimes, and who profit from a race to the bottom of labor, health and environmental standards worldwide, it doesn’t accurately assess the sociopathic legal pressure on a publicly traded corporation not to do harm if it won’t be punished adequately to offset profits, it reflects multigenerational wealth, etc.

Indeed, on the one hand capitalists like to create simple models that show things like coops and worker-controlled industry and socialism can’t work, and ignore the fact that every disincentive in their model has an analog in any capitalist venture. For every worker in a coop who has an alleged incentive to shirk individually and do the minimum because the individual rewards aren’t enough, even though the group would benefit collectively from the best work, there’s a corporation that won’t follow ethical standards because the immediate tangible benefits of defecting and being a free rider are too great. In both cases, however, a trusted outside coordinating authority can spell the difference between mutual cooperation and general benefit. That’s why American liberals mention regulated capitalism so much.

Contrariwise, capitalist apologists ignore the fact that the information-gathering and disseminating prowess of an unregulated market is not as good as that in a partly or largely regulated market if planners have modern data acquirement and processing facilities and a reasonable staff. The proof from ignorance people like von Hayek and von Mises pushed is actually no longer tenable, if it ever was. Even in their lifetimes there was never an observed trend of governments or the masses going to corporations for reliable data and away from government sources, even for labor or econometric data. One good reason is that capitalism as an ideology pretends that advertisement is part of a process that reflects needs but not one that alters them or even creates them, and models society accordingly. That wouldn’t even pass muster at journalism school. It’s exactly why capitalism, with its nondisclosure agreements and tendency to pay for results that are what the buyer wants in advance, is a poor source for the bulk of our basic science research. Even monarchs had issues like religion and prestige that kept them from focusing on the bottom line as a corporation does. There’s no incentive for a corporation to cooperate and help the general level of information become more accurate, no matter what Milton Friedman said, and we see signs of that everywhere in our increasingly privatized (and legislated by corporation-driven agendas) world, particularly in education.

*The perfect information thing is laughable. If you want to focus on the US, where a lot of the supercorporations are still nominally based, people are more busy than ever, and the amount of market disinformation is greater than at any previous time.