A few months ago, I was turned on to the phrase “corporate lebensraum” by James Healy, an L.A.-based artist and founder of the Museum of Death (which I wrote a story about). Healy had used the term to title an exhibit in the early ’90s where he juxtapositioned cereal boxes with serial killers.
The exhibit, which eventually spawned the museum, was meant to show how companies expand into the public’s consciousness, often in dangerous and destructive ways. “Lebensraum” is, of course, a German word meaning “living space” that is forever linked to Hitler’s effort to take over Europe. “Corporate lebensraum” was a perfect take on the idea that, as the L.A. Times put it, was meant to evoke similar horrific feelings of revulsion. Through the exhibit, Healy and his partner visualized and expanded their “argument that food manufacturers are turning children into monsters, seducing them into a deadly consumerist trap right at the breakfast table.”
Serial (and cereal) killers aside, it occurred to me the other day that corporate lebensraum can have other interpretations as well – and one of them is in fact unfolding before our eyes through the actions of Canadian telecommunications companies.
As I mentioned in my post on the joint purchase by supposed arch-rivals Bell and Rogers of the Maple Leafs NHL team (and other properties, including the Toronto Raptors), it’s unfortunate that these firms continue to look inward to Canada rather than thinking about international expansion. But at the same time, in the context of corporate lebensraum, what else are they to do?
We’ve been warned of this inevitability, which is happening because of the laws that prevent foreign ownership of such companies. In presenting the findings of the Competition Policy Review Panel back in 2008, Lynton Wilson said that keeping the walls up around Canada not only prevents foreigners from coming in, it also heavily discourages Canadian companies from stepping out.
“The best way to ensure that successful Canadian businesses are not simply absorbed by international consolidators — to avoid being ‘hollowed out’ — is to take the play to the other end of the rink,” he said. “Canadian firms must become more savvy and determined global players.”
Bell and Rogers certainly aren’t doing that. Instead, they’re “filling in” by buying up everything they see in Canada – whether it’s electronics stores, television broadcasters, magazines and newspapers, sports teams, or even starting banks – because such operations apparently create synergies for their main telecom businesses.
Perhaps, but where do the synergies end? With hefty profits continuing to flow from captive customers and no real pressures to step outside Canada’s borders, the big telecom companies will continue acquiring “synergies” until there isn’t much left to consider as such. As I joked to Global News on Friday, Canadians might eventually have to buy their shoes from Bell and groceries from Rogers.
It’s an exaggeration, but it’s also an unconsidered side effect of the government’s refusal to lift the foreign ownership restrictions. The longer the walls stay in place, the larger these companies will grow and the more they will become conglomerates with businesses that touch every aspect of Canadians’ lives. It’s another kind of corporate lebensraum, where the companies will expand until they overwhelm everything.
Is that a good thing? There are certainly benefits to conglomerates – they have size and money, which obviously come in handy. But they are also uniformly recognized as being inflexible and inefficient, which is ironic given my recent posts regarding the telecom companies’ lack of efficiency.
Inflexible conglomerates have sunk many a ship, from precipitating Japan’s prolonged recession to Sony missing the boat on digital music players (In his biography, Steve Jobs said company’s inflexibility is what allowed Apple’s iPod to take over). It seems rather risky, then, to allow them to grow within Canada, especially at a time when the global economy is shaky.
Once again, the question becomes: Are these growing telecom conglomerates efficient? I tried to answer that the other day by looking at revenue versus employee figures, but in the end the numbers aren’t even required to come to an answer. Can a single company efficiently run telecom services, magazines, retail stores, virtual banks, sports teams and who knows what else? It hasn’t been done yet, so there’s no reason to believe Canada will be a special case.
Foreign ownership restrictions are not just keeping telecom prices high and customer choices low, they’re also contributing to the building of giant, inefficient companies that will inevitably place a weight on the nation’s economy. The issue of foreign ownership, therefore, isn’t just a consumer issue – it’s increasingly becoming one of national importance.
Unless we want a handful of companies providing us with every product and service under the sun, this particular brand of corporate lebensraum desperately needs to be stopped. That can best be done by refocusing the energies driving it outward, onto an unsuspecting world.