Antifragility and Ethics of Large Corporations

THE ANTIFRAGILITY AND ETHICS OF (LARGE) CORPORATIONS

Have you noticed that while corporations sell you junk drinks, artisans sell you cheese and wine? And there is a transfer of antifragility from the small in favor of the large—until the large goes bust.

The problem of the commercial world is that it only works by addition (via positiva), not subtraction (via negativa): pharmaceutical companies don’t gain if you avoid sugar; the manufacturer of health club machines doesn’t benefit from your deciding to lift stones and walk on rocks (without a cell phone); your stockbroker doesn’t gain from your decision to limit your investments to what you see with your own eyes, say your cousin’s restaurant or an apartment building in your neighborhood; all these firms have to produce “growth in revenues” to satisfy the metric of some slow thinking or, at best, semi-slow thinking MBA analyst sitting in New York. Of course they will eventually self-destruct, but that’s another conversation.

Now consider companies like Coke or Pepsi, which I assume are, as the reader is poring over these lines, still in existence—which is unfortunate. What business are they in? Selling you sugary water or substitutes for sugar, putting into your body stuff that messes up your biological signaling system, causing diabetes and making diabetes vendors rich thanks to their compensatory drugs. Large corporations certainly can’t make money selling you tap water and cannot produce wine (wine seems to be the best argument in favor of the artisanal economy). But they dress their products up with a huge marketing apparatus, with images that fool the drinker and slogans such as “125 years of providing happiness” or some such. I fail to see why the arguments we’ve used against tobacco firms don’t apply—to some extent—to all other large companies that try to sell us things that may make us ill.

The historian Niall Ferguson and I once debated the chairperson of Pepsi-Cola as part of an event at the New York Public Library. It was a great lesson in antifragility, as neither Niall nor I cared about who she was (I did not even bother to know her name). Authors are antifragile. Both of us came totally unprepared (not even a single piece of paper) and she showed up with a staff of aides who, judging from their thick files, had probably studied us down to our shoe sizes (I saw in the speakers’ lounge an aide perusing a document with an ugly picture of yours truly in my pre-bone-obsession, pre-weight-lifting days). We could say anything we wanted with total impunity and she had to hew to her party line, lest the security analysts issue a bad report that would cause a drop of two dollars and thirty cents in the stock price before the year-end bonus. In addition, my experience of company executives, as evidenced by their appetite for spending thousands of hours in dull meetings or reading bad memos, is that they cannot possibly be remarkably bright. They are no entrepreneurs—just actors, slick actors (business schools are more like acting schools). Someone intelligent—or free—would likely implode under such a regimen. So Niall immediately detected her weak point and went straight for the jugular: her slogan was that she contributed to employment by having six hundred thousand persons on her staff. He immediately exposed her propaganda with the counterargument—actually developed by Marx and Engels—that large bureaucratic corporations seized control of the state just by being “big employers,” and can then extract benefits at the expense of small businesses. So a company that employs six hundred thousand persons is allowed to wreck the health of citizens with impunity, and to benefit from the implied protection of bailouts (just like American car companies), whereas artisans like hairdressers and cobblers do not get such immunity.

A rule then hit me: with the exception of, say, drug dealers, small companies and artisans tend to sell us healthy products, ones that seem naturally and spontaneously needed; larger ones—including pharmaceutical giants—are likely to be in the business of producing wholesale iatrogenics, taking our money, and then, to add insult to injury, hijacking the state thanks to their army of lobbyists. Further, anything that requires marketing appears to carry such side effects. You certainly need an advertising apparatus to convince people that Coke brings them “happiness”—and it works.

There are, of course, exceptions: corporations with the soul of artisans, some with even the soul of artists. Rohan Silva once remarked that Steve Jobs wanted the inside of the Apple products to look aesthetically appealing, although they are designed to remain unseen by the customer. This is something only a true artisan would do—carpenters with personal pride feel fake when treating the inside of cabinets differently from the outside. Again, this is a form of redundancy, one with an aesthetic and ethical payoff. But Steve Jobs was one of the rare exceptions in the Highly Talked About Completely Misunderstood Said to Be Efficient Corporate Global Economy.