Let’s start with an excerpt from the recently published Ill Fares the Land by the renowned historian Tony Judt.
“What then, of the contemporary belief that we can either have benevolent social service states or efficient, growth-generating free markets but not both? On this, Karl Pepper, Hayek’s fellow Austrian, had something to say: ‘[a] free market is paradoxical. If the state does not interfere, then other semi-political organizations, such as monopolies, trusts, unions, etc. May interfere, reducing the freedom of the market to a fiction.’ This paradox is crucial. The market is always at risk of being distorted by over-mighty participants, whose behavior eventually constrains the government to interfere in order to protect its workings.”
Just as Lancaster has reverted from a diverse and democratic community of more than a score of important national corporate headquarters, several banks, and prominent local merchants to a community heavily influenced by a handful of forces (Franklin and Marshall, Fulton Bank, Lancaster General Health (LGH), Lancaster Newspapers, the High Group), power nationally has been consolidated into massive entities, more influenced by the financial goals of the stock market than the past commitments to innovation, growth, community service, and loyalty to customers, employees and suppliers. Rather than enhancing the vaunted competition of the economic market place, mergers and acquisitions over the past three decades have throttled it.
The argument is made that consolidation increases efficiency, but Judt throughout his book as does Barry Lynn in Cornered: The New Monopoly Capitalism and the Economics of Destruction contend that before long the institutions actually suppress competition, obstruct innovation, and lead to huge mal-distribution of family incomes.
No better example is at hand the LGH. Note how it has become the dominant hospital. It’s investment and often control of medical practices. It’s expansion into Urgent Care and just about every aspect of the medical economy in Lancaster County, with its sights set on replacing the Ephrata Community Hospital and expansion into Chester County.
Also note the extraordinary differential between the compensation of its CEO and a typical custodian worker, a multiple that would have been unheard of half a century ago.
What makes things worse, LGH is a Public Charity that conducts itself with less transparency than any corporation. It has no stock holders to challenge its actions in court. There is no contrary views to be expressed by its self selected board of trustees. Its vast profits are directed almost solely to empire building, with a sorry tiny percentage of funding for community needs in the realm of public health, education and social safety net.
Even more vexating, there is no government power to intervene, apart from future legislation, which is highly unlikely. LGH answers to no one concerning what it does with its excessive profits (resulting from market dominance)…not to the state, not to the city, not to stock holders, and certainly not to the public. It is a fiefdom to itself.
What can be done to generate transparency and public representation? Only public moral suasion. It is up to the newspapers, the medical community, and the public to voice its objections and to call for reform.
Don’t hold your breath!
Concentrated corporate power is a national problem that corrupts government and distorts the economy creating a wealth divide where the top 1% has 70% of the wealth. It is something that has been building for a very long time, every president since Reagan, including the current president, has made the problem worse.
It is going to take conscious citizens who are organized, agitated and persistent to challenge it. We cannot count on the traditional media since it is also dominated by concentrated corporatism. There is no quick fix, but it is a fix we have seen occur in other times in our history so it is one that is possible to achieve.
Justice Brandeis: “We can have democracy in this country or we can have great wealth in the hands of a few, but we can’t have both.”