by Peter Savich, ©2004 per Creative Commons License
I know, I know. This section is entitled "Corporate Harm". So why then am I starting this section with a posting entitled "Corporate Good"?
The reason is that I want to be clear that we People aren't completely insane. I mean, if you read the rest of the postings in this section, and if you more or less agree with the analysis of this section, you might wonder what we People were thinking in creating Corporations in the first place. Why would the People who came before us have created such deadly monsters?
As far as I can tell, the reason People created Corporations was to facilitate non-governmental collections of People to pursue projects that generate potential social benefits and social costs.
(Well, to be fully correct, it wasn't exactly "The People" who created corporations. Rather, it was a certain queen, 404 years ago next month. But that's getting ahead of ourselves.)
I know this is sort of a convoluted explanation for why Corporations were created. But the explanation may start to make sense when we pull it apart and look at its three key pieces: "facilitate", "non-governmental", and "social".
Let's start with the notion of "social" costs and benefits. These are in contrast with "personal" costs and benefits. If I head out for a walk in the Hindu Kush mountains of Afghanistan, the costs and benefits of doing so would be purely (or at least mostly) personal. The same would be true if you and went for a walk in those mountains. Most any benefits or costs arising from that would be solely between you and I.
But let's say that you and I decide, during our walk, to hunt down some Al Qaeda and "bring them to justice", or to put our hands to raising some poppies and selling the crop to the heroin industry. In either case, the benefits and costs of our project would include social ones. That is, the benefits and costs would go beyond you and I.
Next, there's the notion of "non-governmental" collections of people. Note that governments are collections of people too. In theory, governmental collections of people pursue projects only of a social nature. Moreover, they are supposed to pursue ones that maximize social benefits, while minimizing social costs.
Sometimes, circumstances exist in which it makes more sense for a non-governmental collection of people to pursue a social project, than for a governmental collection of people to do the same thing. Three such circumstances include lack of goverment manpower, lack of goverment competency, and political sensitivity.
For example, in the case where you and I decide to hunt down some Al Qaeda, that project might dovetail nicely with the current project of the U.S. government that, presumably, is presently pursuing the same end. Why might the U.S. government look favorably upon our project? The three reasons above could provide an answer. Given the U.S. has no military draft, and our armed forces are currently occupied with Iraq, the government may lack the manpower necessary for scouring the Hindu Kush. Moreover, maybe the U.S. government doesn't have and doesn't need many people -- like you and I after we've hiked those hills -- who know the Hindu Kush like the back of their hands (i.e. incompetency). Lastly, maybe the prospect of U.S.. government soldiers scouring the Hindu Kush en masse, crossing back and forth across the Afghani-Pakistani border, might generate undesirable political sensitivities with respect to the Pakistani government, not to mention the fragile Afghani government. So maybe the U.S. government would smile upon our little project.
Listen, if you and I got that far, we might as well gives ourselves a catchy title like "Warlords of the Hindu Kush" or something. Hey, don't laugh. Cheesy titles like that pay off big time in downstream merchandising opportunities. Use your imagination. Without even trying I can see an action figure, a video game. and a breakfast cereal somewhere in there.
But I digress. There's one more piece to this puzzle. That is the notion of "facilitating" our project. Chasing down Al Qaeda in the Hindu Kush would be no mere walk in the woods. This project would entail potentially large social benefits and non-trivial social costs. It would be rather convenient if, in exchange for generating these social benefits, we were "held harmless" by the U.S. government for any social costs potentially arising from our project.
Social costs might arise if, for example, in pursuing Al Qaeda, we seized some poppy fields along the way. Raised to "waste not, want not", we naturally might sell the poppy crop to the heroin industry. Some folks might be less than happy about that.
Or, for example, on the way to pursuing Al Qaeda, we might come across a village with young women. Being men with some measure of testosterone still percolating through us, we might, well, do what comes sort of naturally during wartime. Some folks might be less than happy about that.
In these cases, it would be highly convenient for us if the U.S. government "had our backs" on these human rights complaints. That is, if some people pressed the U.N. to bring us up on war crimes charges, it would be nice if the U.S. government threw its weight around a bit to keep that from happening.
At this point, you might be wondering what the preceding "Warlords of the Hindu Kush" allegory has to do with Corporations. This allegory serves to illustrate the origin of the modern incarnation of Corporations.
The above allegory resembles the "privateer" dynamic under Queen Elizabeth I of England in the late 1500s. Among the most famous of the English privateers was Francis Drake. This fellow led bands of non-governmental actors who generated social benefits and costs, and who were facilitated in doing so by the English government. Mr. Drake in particular was renown for helping save Elizabethan England during the Spanish Armada Crisis.
Less than a decade following the successful (for England) conclusion to the Spanish Armada, Queen Elizabeth chartered, on December 31, 1600, the first modern Corporation: The British East India Company. Like the privateers, this primordial Corporation comprised non-governmental actors who generated social benefits and costs, and who were facilitated in doing so by the English government. The projects of the British East India Company included ruling India and ruling the territory that later became known as "America."
So, put simply, the "good" of the Corporations is that they are one means for generating social benefits outside of government. Specifically, they are a particularly useful means for pursuing risky social benefits, the pursuit of which may generate social costs.
Corporate harm and Corporate good spring from the same source. If we're talking about Corporate good, we refer to this source as "limited liability." If, instead, we're talking about Corporate harm, we say that "limited liability" is just a euphemism for "irresponsibility".
At the close of 2004, in the United States, a Corporation is a group of people engaged in a particular activity, with the peculiar characteristic that no member of that group bears any personal responsibility for the actions of the group. Put simply, a Corporation today is a mob.
But it's a special kind of mob. It's not a disorganized, disorderly crowd. Corporations are highly organized and orderly.
Nor are Corporations equivalent to the mob. The mob is an organized criminal enterprise that pursues explicitly illegal ends. Corporations are not allowed to pursue explicitly illegal ends.
But despite these differences, Corporations are similar to these two other kinds of mobs in that the members of these mobs bear no personal responsibility for the actions of the mob. Basically, a Corporation is a mob that pursues money in legally permissible ways.
But even if so, where's the harm in that?
The harm comes when Corporations inevitably and legally lie to us People, and we foolish People fall for the lies. The harm comes when desperate Corporations inevitably and legally take away our rights, and we sleeping People let them. The harm comes when Corporations inevitably and legally cheat on their taxes, and we incompetent People let it slide. The harm comes when Corporations grow so powerful that they write and execute the very laws that define what they can and cannot do, while we irresponsible People watch Survivor. The harm comes when Corporations inevitably and legally poison us daily, and in response we fat and sick People say "thanks".
The harm comes when all that the Corporations want from us People is our money, yet we foolish People entrust the Corporations with our survival.
I entitled this section "Corporate Harm". I could have called it "We Stupid People". Or, more accurately, "We Fat, Sick, and Irresponsible People".
The old proverb reads: "Fool me once, shame on you; fool me twice, shame on me." Corporations have been "fooling" us People not for a day, nor for a year, nor even for a decade. It has been decades, and in some respects, it has been 404 years. Shame on us People.
But what of the People that make up the Corporations -- the employees, management, board. and shareholders. Are they all desperate liars, cheaters, and/or killers? No. They themselves are not necessarily bad People. They're just doing their small job for an organization that happens to lie, cheat, and/or kill. Similarly, People who consume the products and services of these organizations are not necessarily liars, cheaters, or killers.
Bottom line, a Corporation is a way of organizing People such that the organization, by its very nature, lies, cheats, and/or kills to make money, but the People in the organization don't think about all that, and in any case, they're certainly not responsible for any of it.
I realize this may sound like science fiction to you. It makes it sound like we People are a bunch of Stepford Wives. Hey, all I gotta say is that if they made a remake of that movie, it must have struck some kind of human chord.
But although this may sound strange to you, saying it this way hints at a way out for the People. The problem with Corporations is not the Other People that make up these Corporations. The problem is the way that the Other People are organized. The problem is with the Corporate form itself, and the harms to which that form of organizing People inevitably and legally leads.
Before we get to those harms, it will be useful to understand the second half of the source of these harms. The fist half is irresponsibility, as this posting has discussed. The next posting discusses the second half. This second half is a dynamic that, coupled with irreponsibility, make Corporations the most dangerous threat today to the survival of the human species.
You think I'm kidding. Or maybe you think I'm exaggerating. "Corporations are Alien Life Forms. Yeah, right! Tell me another one."
No, really. I mean it. Let's take the two notions -- "alien" and "life form" -- separately. Let's start with "life form".
You've probably heard of "Brown v. Board of Education" or maybe "Roe v. Wade". Know what they are? They're famous Supreme Court cases.
Brown v. Board was a 1954 landmark decision that ultimately led to the current Weiner Nation phenomenon. Michael Weiner is an angry Jewish fellow who calls himself Michael "Savage" on a reactionary AM talk radio program called "The Savage Nation". As far as anyone can tell, part of Mr. Weiner's anger dates back to the 1970s when he found himself on the short end of the affirmative action stick in his fruitless search for a job as a college professor. Mr. Weiner is the champion of all who have tried and lost, and need someone, anyone, other than themselves to blame.
How about "Santa Clara County v. Southern Pacific Railroad Company". Ring a bell? Need some time to think it over? OK, cue the Jeopardy music ... doo-doo-doo-doo, doo-doo-doo-doo, ... bzzzzzz. Time's up!
The question is: Which Supreme Court case declared Corporations to be "persons"? [1/26/06 Note: Actually, the situation is a bit trickier than that.] Don't feel bad. Even Ken Jennings would have flubbed this one too.
This is because this 1886 case is highly obscure. Although obscure, it is, if the thesis of this blog is anywhere near correct, among the most important Supreme Court decisions in the history of the United States. This is because what that case held was that, as far the U.S. Constitution is concerned, Corporations are People too.
For example, you probably know that the First Amendment says "Congress shall make no law ... abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances". See that part about "the people peaceably ... petition[ing] the Government"? In your wildest dreams, did you ever imagine that that language means Corporate lobbyists who stick Congressmen in their back pockets are simply exercising the First Amendment rights of their employers? Bet you didn't learn that one in your civics class back at Jefferson High.
So there you have it. According to the U.S. Constitution, you, a Person, are recognized as a particular life form protected by the terms of that document. But in 1886, the Supreme Court said that we are not the only life form protected by that document. In the United States, since 1886, Corporations are People too.
The U.S. Declaration of Independence contains these famous words: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." Although the Declaration is not the Constitution, it did precede the Constitution, and it gives the flavor of what the guys who started up this country had in mind.
One thing they seemed to have had in mind is that, well, it's a man's world, baby! In 1776, these fellows said "all men", not all "men and women" nor "all people". It would take another 200 years for women to join men in exercising the Constitutional rights of contracting and spreading venereal disease, racking up debilitating consumer debt, and getting fat, sick, and outsourced. Welcome to America, gals! I've got your R-E-S-P-E-C-T right here.
While it took women 200 years to crash the party, Corporations made The Leap in little more than a 100 years. But there's something weird about that. I mean, women can experience life and liberty, and, praise be to Prozac, they can even pursue happiness too. But what about Corporations?
There's a reasonable argument that Corporations can experience life and liberty. Incorporation is sort of like birth. And Corporate dissolution is sort of like death. Moreover, during their lives, Corporations in this country seem quite at liberty to foment all forms of chaos and despair. So it's fair to say that Corporations are indeed a "life form".
But what about "the pursuit of happiness"? Can a Corporation be happy? I don't think even the reactionary Supreme Court of 1886 would have said that. They didn't need to, of course. All they said was that the Fourteenth Amendment, passed in 1868, amended the Constitution to make Corporations People too.
The fact that Corporations can't experience happiness brings us to the second major topic of this posting. That topic concerns "aliens".
The definition of "alien" I am thinking of here is the following: "A person who is not included in a group; an outsider." Yes, Corporations are People too. But they're not included in "our" group. Those Corporate People are "them". We human People are "us".
The key difference between us and them is the critical resource that keeps us alive. What is that resource for humans? It is food? Nope. Humans can go on hunger strikes and live for weeks and even months without food. (Given the size of some People I saw last week at Costco -- a.k.a. The Land of the Fat People -- we might have to amend this to "years".)
Is it water? Nope. Humans can go for days, maybe even weeks, without water.
What it is is oxygen. Try killing yourself by holding your breath. It doesn't matter if you're on the most wicked suicidal Prozac relapse. Your body won't let you die this way. Automatic reflexes kick in to force us to gulp some air. There are no analogous reflexes for food or water.
Humans would last only a few minutes without oxygen. Oxygen is the critical resource that keeps us alive. When we go into diabetic shock from consuming our fifteenth Snickers bar, and they put us on life support, that mask they strap on our face is giving us the oxygen we need to stay alive.
It's not just us. Most non-plant life forms also need oxygen to survive. That includes your cat and your goldfish. Plants are symbiotic with us. While we breathe in oxygen and breathe out carbon dioxide, plants "breathe in" carbon dioxide and "breathe out" oxygen. It's a wonderful ecosystem, full of all manner of teeming life forms exchanging oxygen and carbon dioxide. Its kind of like the EBay ecosystem in which EBay addicts endlessly circulate the refuse of postmodern consumerism.
But some forms of life are not part of this great EBay cycle of oxygen and carbon dioxide exchange. These are the anaerobic life forms. "Anaerobic" organisms are ones that don't require oxygen to survive. Examples of anaerobic organisms include certain kinds of bacteria and, to the extent they can be considered "life forms", viruses.
Another example of an anaerobic organism is Corporations. Like certain bacteria and viruses, Corporations don't require oxygen to survive and prosper. But the big difference between bacteria and viruses, and Corporations, is that the latter are Constitutionally protected, while the former couldn't even get into court. At least not through a summons.
But if Corporations don't require oxygen to survive, what do they require? In a word, it's "money". Upon incorporation -- Corporate birth -- the parents of the infant must pay a registration fee, and they must declare the shares that define the infant. The shares represent the financial assets (i.e. money) that comprise the infant. So at birth, a Corporation is just an embryonic puddle of money.
During its life, a Corporation breathes in money in the form of sales revenue, equity issuance, debt issuance, and so on. Corporations breathe out money through costs of labor, costs of capital, costs of sales and marketing, costs of lobbyists, and so on. If the Corporation runs out of money, or threatens to do so, it goes on life support. In the Corporate world, this is called "bankruptcy". The whole point of bankruptcy is to stem the outflow of money that is draining the life from the ailing Corporation.
Finally, when even bankruptcy can't save it, the Corporation dies. This is called "dissolution". In dissolution, the carcass of the dead Corporation -- a carcass consisting purely of money -- is picked clean by vultures known as "Corporate lawyers".
Whereas we oxygen-breathing humans can live at most 80-110 years or so, those money-breathing Corporations can live for centuries. In fact, the very first modern Corporation -- the British East India Company -- lived a full 284 years. This is 3-4 full human life spans.
Summing up, Corporations are alien life forms that can live for centuries, and that breathe money, not oxygen. In fact oxygen, happiness, love, anger, food -- all the things that make us humans human -- mean nothing to Corporations. They breathe in money. They breathe out money. Oxygen, happiness, love, anger, and food have meaning to Corporations only insofar as they can be exchanged for money.
Put this together with the conclusion of the previous posting. That posting concluded that the People who act on behalf of Corporations comprise mobs the members of whom bear no personal responsibility for these acts.
So a Corporation is a Constitutionally protected irresponsible anaerobic organism that feeds on money. If that's not an alien life form, I don't know what is.
The next few sections address the "crimes" of the Corporations. They talk about the Corporations "lying", "cheating", "stealing", and "killing". But I want to caution that these are just human notions. They mean nothing to Corporations. As I said, Corporations are simply irresponsible anaerobic organisms that feed on money. Crime, lying, cheating, stealing, and killing are concepts that have no meaning for such organisms.
So as you read the next few sections, try not to get mad at the Corporations. They're just doing what they were born to do. It's like an avian influenza virus that mutates to become transmittable among humans, and leaves behind an indiscriminate swath of human misery and death. The virus wasn't "thinking" about any of that. The little bugger was just doing what its RNA programmed it to do. It was nothing personal. The same goes for Corporations, and the "depraved behaviors" you will be reading about in the next few sections.
But before we wade into the swamp of these depraved behaviors, one further issue remains: Why would Corporations engage in depraved behaviors?
Corporations engage in depraved behaviors for the same reason that any life form engages in depraved behaviors. That same reason is, simply, to stay alive.
If you believed your survival depended on it, would you lie? Would you steal? Would you cheat? Would you kill?
You probably can't answer any of these questions. This is because either your life has never been at imminent risk, or, even if it has been, lying, stealing, cheating or killing would not have helped in those situations. So we have to use our imaginations.
Imagine yourself as an American citizen in present-day Mosul, Iraq. You're dressed as an Iraqi because the townspeople are more or less hostile to Americans. Let's say you haven't eaten in a few days, and you're starving.
Now let's say you're walking down a street and the only other person is an Iraqi. He stops you, and says, accusingly: "You're an American are aren't you?"
If you tell that person the truth, you figure you're as good as beheaded. Without your head, you couldn't breathe in any oxygen. No oxygen, no life. So, faced with the imminent prospect of losing your life, do you tell him the truth?
Well, unless you're suicidal, the answer is: Hell no! You'd lie, and say you were an Iraqi just like him. If you had the chance, you'd also cheat him or steal from him to get some food since you're starving. And if he didn't believe your answer, and he started to call out to the Mujahideen, you just might kill him. I mean, if you were able to.
The point is, if our lives depended on it, ain't no telling what we'd do to stay alive. That's because we're all life forms with a survival instinct.
Corporations are no different. If they perceive that their very survival is threatened, they, like any life form, will "stoop to" lying, stealing, cheating, and killing, just to stay alive.
What threatens the survival of a Corporation? Anything that would cut off the money supply to the Corporation. What might threaten that? Consumer backlash.
That is, the survival of Corporations is threatened when consumers (i.e. we the People) come to see those Corporations as more harmful than helpful. Like any life form, to prevent that from happening, Corporations would do just about anything.
Starting with lying ...