Here's an interesting article in the New Statesman, (via Arts and Letters Daily) giving us the history of the East India company, and recent interest in it as the pioneer of global capitalism. What I didn't know before reading it is that Adam Smith, the god of all capitalists, wrote that corporations must be tightly controlled:
In The Wealth of Nations (1776), Adam Smith used the East India Company as a case study to show how monopoly capitalism undermines both liberty and justice, and how the management of shareholder-controlled corporations invariably ends in "negligence, profusion and malversation". Yet nothing of Smith's scepticism of corporations, his criticism of their pursuit of monopoly and of their faulty system of governance, enters the speeches of today's free-market advocates.
Smith's vision of free trade entailed firm controls on corporate power. And, as did his own times, subsequent history shows how right he was. If it is to contribute to economic progress, the corporation's market power has to be limited to allow real choice, and to prevent suppliers being squeezed and consumers gouged. Its political power also needs to be constrained, if it is not to rig the rules of regulation so that it enjoys unjustified public subsidy or protection. Internal and external checks and balances must curb the tendency of executives to become corporate emperors. And clear and enforceable systems of justice are necessary to hold the corporation to account for any damage to society and the environment. These are tough conditions, and have rarely been met, either in the age of the East India Company or in today's era of globalisation.
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