Wednesday, January 06, 2010

Housebreaking the Corporations

One obstacle to constructive change in the face of peak oil I didn’t discuss recently on The Archdruid Report is the role of corporate influence in contemporary society. That factor is of course real – the influence of large corporations has checked, and at times checkmated, quite a few useful reforms in recent decades – but it has been overstated fairly often; the same thing could be said with equal truth of nearly any other large and well-funded institution in American life, from the retiree lobby to the American Medical Association.

The principle behind that effect is simple enough to grasp. Whenever power has been diffused to the point that no one power center can carry out its agenda without the consent of many others, any well-organized faction becomes a power broker. It can drive whatever bargains it wishes in exchange for supporting the agendas of other factions, and use that clout to defend those positions it considers nonnegotiable.

A good deal of the stalemate that puts necessary reforms out of reach in Washington DC just now is a function of this process; it’s hard to think of any such reform that won’t step on the toes of at least one well-funded power center, and so business as usual proceeds on its merry way, even though almost everyone recognizes that the end result will be to nobody’s benefit. Consider, as one example out of many, the way that the retiree lobby keeps the single sanest response to America’s looming budget crisis – a simple means test on Social Security and Medicare – from ever coming up for discussion. The same logic, enforced by one or another power center, keeps every other effective reform out of reach.

This is not, to be sure, the way a significant fraction of today’s radicals describe the situation. Since I first started The Archdruid Report, and more particularly since economics began to move toward center stage in these essays, I’ve received a regular stream of comments and emails insisting that corporations play the role of Sauron the Dark Lord in an updated remake of Tolkien’s The Lord of the Rings. Another example of the species showed up in the inbox a few days ago; this one insisted that corporations had become the new dominant life form on Earth, and were ruthlessly squeezing out all the others, including us.

The Tolkien metaphor may not be quite on target in that case, as the author seems to have taken his metaphors from the Terminator movies instead. Still, the quest to identify somebody in today’s society as evil incarnate, and blame him, her, or it for the world’s problems, is much the same. (I ought to write a post someday on the way that a plot device Tolkien adopted for literary effect has been stood on its head and turned into one of our time’s most misleading metaphors, but that’s a job for another day.) The problem with such identifications, as I’ve suggested repeatedly in these essays, is that the root of most of today’s problems is the simple fact that most of the people on our badly overcrowded planet demand lifestyles that the Earth’s resources will not support for much longer. Until that changes, nothing else is going to change – and nobody has yet suggested a plausible way for that change to happen that doesn’t involve a vast number of deaths and the decline and fall of industrial society.

That being the case, we’re in for a rough future. Still, as I’ve also suggested here rather more than once, this unwelcome news doesn’t make constructive change pointless. Bad as the unraveling of the industrial age will inevitably be, there’s still plenty of room for choices that could make matters noticeably better, or noticeably worse, in the deindustrial age beginning around us. One of those changes, I suggest, has to do with the way corporations relate to society as a whole – for it’s not necessary to project mythic images of absolute evil onto today’s corporations to realize that there are significant problems with that relationship.

The core difficulty is simple enough to describe. Corporations, under the laws of the United States and most other nations, are legal persons; they have many, though not all, of the same rights that “natural persons” – that is, you and me – have under the law. Still, the most obvious difference between corporate persons and natural persons these days is that the corporate kind are noticeably more antisocial. They pursue their purposes – primarily, making money – with a single-mindedness and a lack of concern for consequences that, in natural persons, would be accurately labeled psychopathic; they’ve proven themselves consistently willing to lie, cheat, steal, and kill whenever the likely return on these acts outweighs the risk of punishment.

Any number of writers in recent years have pointed this out, of course. Some of them have simply turned up the rhetoric of moral denunciation, with the usual results – that is, a warm glow of self-righteousness on the part of the denouncer, and no effect at all on the denouncee. Others have proposed various means for forcing corporate persons to behave themselves. One popular proposal would subject corporations to regular review by some independent body which could annul the charter of any corporation that refused to be properly housebroken, forcing its dissolution. What would keep this body honest in the face of the fantastic potential for corruption, the proponents of this notion do not say, but there’s another issue here: we’ve actually got a tolerably effective way of responding to antisocial behavior; we just don’t apply it to corporate persons the way we do to natural persons.

A glance back into the history of law may help clarify the matter. I’m not sure how many people these days know that the earliest version of English common law, from which our American legal system descends, operated entirely on the basis of fines. The principle of wergild, as it was called, gave each person a cash value; if a murder took place, the murderer had to pay the family of the victim that cash value as wergild for the death. Lesser injuries and insults called for lesser fees. The same thing was true of nearly all the old Indo-European tribal law codes. It didn’t work very well, not least because anyone who had enough money could act the way mainstream economists think we all ought to act, on the basis of a simple cost-benefit analysis. If you could afford to pay the wergild for killing somebody, and decided it was worth the expense, why not?

So as the Dark Ages gave way to less chaotic times, legal codes in England and elsewhere replaced wergild with punishments that were a good deal less easy to shrug off. This is why natural persons who are convicted of felonies, by and large, can’t get away with just paying a fine; they go to jail, or if the crime is heinous enough and it happens in a jurisdiction with capital punishment, they die. While it has its failings, this approach to antisocial behavior generally works a good deal more effectively than the wergild principle.

From this perspective, the problem with corporate persons is simple enough: the only risk they run in breaking the law is that they have to pay wergild, and that doesn’t constrain antisocial behavior any more effectively now than it did in Anglo-Saxon times.

My more perceptive readers may be wondering at this point whether I’m seriously proposing that corporations should be thrown in jail or put to death. Yes, that’s what I’m proposing, with the adjustments needed to account for the differences between corporate persons and natural persons. What’s the essential nature of imprisonment for a crime, after all? The criminal ceases to be a free person; for a specified period of time, he is a chattel of society, and society has the right to profit from his labor during that period. And capital punishment? The criminal, having proven that he isn’t willing to abide by even the most minimal standards of social existence, ceases to exist by act of society. Both of these can be applied to corporations easily enough.

Imagine, then, that a corporation – we’ll call it the Shyster Company – has just been caught selling worthless securities to widows and orphans. The district attorney files charges of felony fraud and theft. The trial date arrives, the lawyers bicker, the jury finds the defendant guilty as charged and the judge sentences the corporation to the equivalent of ten years in the slammer. The judge appoints a trustee, who takes control of Shysterco and all its assets. For the following ten years, Shysterco is a wholly owned subsidiary of the state government. Its stock pays no dividends and has no voting rights, its directors have to find something else to do with their time, and if the trustee decides that the CEO and other overpaid office fauna get to find new jobs, they get to find new jobs – assuming that they’re not doing time themselves, as they probably should be. All profits earned by Shysterco during its period of imprisonment go to the state government, subject to set-asides that pay restitution to the victims of the crime.

Meanwhile another conglomerate – we’ll call this one Dirty Rotten Scoundrel Inc. – has been caught knowingly selling food products tainted with deadly bacteria, and a dozen people have died. This time the district attorney files charges of aggravated first degree murder. The trial date arrives, the media has a field day, the lawyers bicker, the jury returns a verdict of guilty as charged, the judge sentences DRSI to death and the appeals court upholds the sentence. On the scheduled date of execution, DRSI ceases to exist. Its stock becomes worthless, its assets are sold off in an auction in which no former shareholder is allowed to bid, its name and trademarks can never again be used by anybody under penalty of law, and its creditors get whatever scraps are left once the victims’ families receive their settlements.

It’s crucial that the stockholders in both cases, and the creditors in the latter case, suffer for the behavior of the corporation. The stockholders of a corporation are its owners, in fact and law; they profit from its activities, and therefore should pay for its crimes. The laws governing corporations limit the liability of stockholders to the value of their investment, and there’s no need to overturn that principle; it simply needs to be applied to criminal cases in the same way that responsibility is applied in cases involving natural persons. Notice that under this system, if word gets out that a corporation is pushing the limits of legality, the stockholders have a very strong incentive to sell, driving down the value of the stock. Notice also that if lenders become aware that a corporation is engaging in really egregious behavior, they have a very strong incentive to charge higher interest rates or even to stop loaning money to the corporation. Neither has any such incentive under the current system, which is one reason why corporations act as though their quarterly profit statements are the only things that matter; to their stockholders and creditors, this is essentially the case.

Finally, notice that the government has a powerful incentive to enforce the law, which current corporate regulation schemes generally lack. Governments always need money; raising taxes is unpopular, but catching a crooked corporation that has violated the law and making the rascals pay for their crime will make excellent press, and five or ten years of corporate income in the state treasury is likely to gladden the heart of even the most unregenerate corporate stooge in the state legislature.

My more perceptive readers may be wondering at this point whether I seriously think such a proposal has the chance of a snowball in Beelzebub’s back yard of being enacted. Yes, as it happens, I do. One of the repeated lessons of history is that the political power of business waxes during times of relative stability, and crumples in times of turmoil and crisis. The long European peace of the 19th century saw business interests dominate most Western governments; when that peace shattered in 1914, it took the power of big business with it, and by the time the rubble stopped bouncing after 1945, every Western country had either embraced some degree of socialism outright, or adopted radical economic reforms that would have been considered unthinkable before a flurry of bullets at Sarajevo tipped the world into chaos.

We are facing a similar age of crisis now, in case you haven’t noticed, and it’s worth noting that a number of countries have already seen governments square off against corporate powers and win. (Consider Russia, where the seizure of the nation’s fossil fuel reserves by local magnates backed by multinational corporations drew a brutally effective counter from the government once Putin took office.) When the power of money faces off against the power of violence, money comes out a distant second. As the Great Recession deepens, the peaking and decline of world petroleum production begins to bite, and rising world powers contend with declining America and each other to settle whose will be the next global empire, this equation is likely to play a major role in the balance of political power. I suspect that by the time the current mess gets any deeper, business interests will be facing organized efforts to do things much more drastic to them than simply hold corporations responsible for their crimes, and may be willing to bargain in the hope of survival in exactly the same way their predecessors did in that earlier time of troubles.

Yet there’s another factor that needs to be addressed. As I suggested toward the beginning of this essay, the power of corporate interests might more usefully be seen as a response to the general weakness of all other parties. That weakness is the product of a power vacuum at the core of the American political system, and this vacuum will be the theme of next week’s post.

50 comments:

averaging said...

I am puzzled http://www.tripzine.com/listing.php?id=corporate_metabolism is not more widely cited, being the whole elephant albeit from historical distance.

Glenn said...

Nice concept. It seems more practical than my wish to have corporations stripped of their "personhood" rights, such as free speach, association & etc. My idea was to force the owners, stockholders and CEO's act in their own names, rather than behind the corporat shield.
I like your idea much better.

Glenn

Sudi said...

JMG,

As someone who is a CEO of a small/medium sized company I would say there are lots of checks and balanances on things that would be illegal or unethical. In addition to being personally liable if there are any breaches on environmental standards or labor standards (the company is in manufacturing) there are consequences to actions that would cheat or misrepresent product attributes to our customers.

It would seem that the big financial institutes who donate heavily to both sides of the political aisle and government sponsored institutions are immune to the consequences, though.

-Mike

Tiago said...

In times of potential chaos or transition (like these), all proposals have a chance of being enacted. Surely more than in stable times. You do well in proposing it.

I've been spending around 1 month/year in the US for the last 3 years and, for what I see, my bet in not on proposals like these, but on some variation of Sarah Palin.

Kyle said...

Your post is very reminiscent of something I read some months ago about the ideas of Mancur Olson, which I managed to dig up after a little searching: http://blogs.law.harvard.edu/philg/2009/03/16/how-rich-countries-die/

The basic idea here is that special interest groups grow and become more parasitic on a society as a function of the amount of time since the last war devastating enough to unravel the infrastructure that keeps such groups secure in their positions. This is the first time I've thought about this article since I discovered your blog about two months ago, so now I'm beginning to think about other ways besides war that this could occur. I'm not quite in agreement with you on predictions about what the next 100 years or so will look like, but I'm much more convinced now that an economic crisis much more severe than the current one may be on the horizon -- but this post makes me more hopeful that there may be a silver lining in that it may present an opportunity to purge some dysfunctional aspects of the American political climate that have become entrenched in the last few decades.

The new sort of legal accountability for corporate crimes you propose sounds like it would help prevent the same group of crooks from simply reforming under a new name, but I can't help but think that corporations would find yet more ways to avoid taking responsibility. One thing that comes to mind is the Halliburton/KBR method of cleaning house -- concentrate all of your corporation's shadiest activities into the operations of a single subsidiary, then break it off into an independent company when it looks like the shit is about to hit the fan, so it can safely say on its corporate web site that "Halliburton and its subsidiaries have no employees or work in Iraq or Afghanistan"...

hapibeli said...

We can only hope that you're vision of corporate comeuppance will be the wave of the future, at least until such time as the foundations of western civ begin to crumble in earnest. It looks possible that there are movements in the US Congress to address just such corporate malfeasance beginning with Dodd's retirement from the Senate and his and other retiree's longing for "legacy". It's too bad more so called, progressive politician's don't view EACH DAY of their tenure as "legacy" building.

David S said...

Excellent, original thinking. Thank you for hosting this useful blog.

The notion that corporations are psychopathic, which gained notoriety in the movie "The Corporation" of several years ago, seems to be overstated. While I agree with the analysis that wergild is inadequate social restraint, the fact is that the vast majority of corporations appear to operate entirely within the law. It would be interesting to know, from analysis of crime statistics, whether the prevalence of psychopathy is higher in corporations than it is in individual persons - as yet, I haven't seen that case made.

Be that as it may, the argument for introducing more serious punishments to corporations stands on its own merits, and I support it.

Antony said...

I beg to differ on the point that English Common law operated "operated entirely on the basis of fines", or wergild. Historically, if a court determined that a crime had been committed that was so egregious that no amount of wergild could right whatever wrongs were committed, then the defendant could be outlawed. Under Common Law, outlawry would remove the defendant from civilized society by taking away all civil rights and protections that he had under the law. He could quite literally be hunted down and killed in the streets like a mad dog. Of course, this penalty wasn't applied lightly, as it was in effect a death penalty. However, in the case of an individual or group who behaved as if they were wealthy enough to kill with impunity, I am fairly certain that a Writ of Outlawry would have been applied.

Scott C said...

I agree with the general principle of your proposal. However, I see at least one major weak point. Any trustee appointed during the "jailing" period of a guilty corporation would more than likely destroy a corporation instead of seeing it turn a profit. An alternative to this type of punishment would be a fine system that was more appropriate. Natural persons are essentially fined the complete earnings of some amount of time while in jail. The same principle could be applied to a corporation. If a company is found guilty of some non-capital crime, it is fined a multiple of the last, say, five years average revenue (not profits). The multiple would be the equivalent number of years an individual would be incarcerated for. In this way, corporations are punished at the equivalent rate as natural persons, but there isn't a reliance on there isn't a reliance on government stewardship to manage the punishment.

Dr. Pangloss said...

Mr. Greer. I cant thankyou enough for what you do. You (and James Kunstler) have totally changed my life these last few years. I just finished your excellent book "The Long Descent". I am pleased to tell you that I am already doing all 12 of your sustainability steps. (downsized twice, super insulated house, heat and hot water from wood I cut, grow most of our food in huge (half acre) permaculture, organic gardens, orchards, cut energy usage 60%, SUV to volks diesel, building strong community, etc). Thankyou so much, especially since the most valuable gift you gave us was the idea that collapse will be slow, that we may have some time to prepare.
The ONLY thing I would like to take issue with is your statement (p.143) that "for many years now, medical care has been the leading cause of death in the U.S." You blame iatrogenic illnesses/hospital infections/drug side effects/risky elective surgeries/simple malpractice as killing more that heart disease or cancer or anything else."
What I think that you are overlooking is the deaths that were prevented. In 1789, in Massachusetts and New Hampshire the average woman lived about 32 years. Around 1900, the average American woman lived to be about 45, and now lives to be almost 80. In the mid 1800's about 25% of infants died, (30% in some cities, higher for slaves and indians).
They died of cholera, typhoid fever, diphtheria,T.B.,small pox, scarlet fever, etc. Childbirth was the leading cause of death for women, (probably about 2.5 to 5%, still 1.2-1.8% today in Afganistan and Congo). In 2004, U.S. had 4,112,052 live births/ 1,222,100 abortions and 20/1000 pregnancies we in the tube/ectopic...almost all fatal.
So if you consider the women who didn't die as infants because of 'medical care'/vaccines/antibiotics/etc, the women who didn't die in child birth, who didn't die of their appendicitis it becomes a huge number. Then consider all the heart attack/cancer/accident/etc. who would have died with the excellent medical care in this country....the number becomes huge.
Thankyou so much for what you do and just hoped you would see this from a different angle. Best wishes and bless you.

Irrational Athiest said...

Even if you were to enact laws that would make a corporate person as liable for a crime as a normal person, what is to stop a corporation purposefully committing a crime and then 'go out of business' and disappear? The way I see see it the main problem is the legal equality between a corporate person and a normal person. You can invent something, establish an equal legal status as you and me, get permits, commit crimes, and then vanish, and there's no one to prosecute for the crimes committed. I think it would be a better solution to make a law that a corporation ALWAYS has a subordinate legal status to a normal person. If a corporation wants to dump toxic sludge, it can't because it would hurt people. If a corporation swindles money and gets caught, it will loose in court because the normal person will be considered before the corporation.

I don't think it has a chance in hell of coming about until after the revolution (so to speak) but it's the way it should be.

HeapSort said...

I endorse your ideas! But what is stopping the citizenry from enacting these or similar policies now? And why don't we enforce existing laws to their full extent right now? That is, why don't we demand that those in charge of the various enforcement agencies do their jobs?

Is it too hard to put a face on law-breaking corporations when the blame is so uniformly spread around? Do people subconsciously recognize that they share some of the blame? Are they just afraid of being black-listed and never working again? Is it just too much effort? Is it too hard to understand what happened?

Corporations (large and small) are breaking laws all the time. But so are individual citizens. People have stopped policing themselves; it's not so surprising they aren't eager to police others, aside from some particular group they wish to act as a scapegoat.

Anything else requires a lot of hard work, starting with an effort to understand the complexities of how the world actually works, which is never fully explained by any theory or ideology which is simple enough to be understood.

Anja. said...

"It’s crucial that the stockholders in both cases, and the creditors in the latter case, suffer for the behavior of the corporation."

Well, yes. But I think the people who would truly suffer at Scoundrel Inc are the Joe and Jane employees. They are suddenly without job & income, their pension funds have evaporated and as reference all they can provide is a convicted and dead company (which might make it rather hard for them to find a new job!). While the top dogs at this company probably saw it coming a mile off and made sure their money was safely stowed away!

Sentencing a company to death is not always a smart move - think of companies that provide essential products or services like sterilised medical equipment, for instance. I can imagine a scenario where such a company dumps medical incoming waste where others sicken and die. Yet, hospitals will continue to need the sterilised medical equipment they provide...

How about personal accountability for corporate decisions? I suspect often such deadly decisions can be winnowed back to a few people within the corporation who truly knew what they were doing and the possible consequences. I would imagine that most of the others who work there have had no influence on the decision, or even knowledge of.

I do like the general concept, though!

Ariel55 said...

Dear Mr.Greer,

Thank you for the post! I greatly admire your disposition to be orderly as we negotiate an uncertain future here in America. I even like your ideas. My fear, however, is that "the name of the game" IS going to change from money to guns. I heard a report last week that the "power" in the "arms" of Americans is its distiguishing feature between us and other nations. Happy New Year anyway, and best regards to you.

Evan said...

JMG,

I must say I'm a little puzzled by the subject matter of this post. While I admit to falling in the "demonize corporations" camp in the past, I do think I've come to a much more tempered and thoughtful perspective. That said, this post puzzles me perhaps because I do not yet see where you're going. Hopefully next week's post will clarify it, but until then allow me a few comments.

The transference of power -- whether in the form of money, assets or infrastructure -- from corporations to governments seems moot. At that point, it is a cycling of power from one relatively large and impersonal body to another. Since the political process in the United States is effectively a mass-marketing ad campaign equivalent to the ad-wars raged by Pepsi and Coca-Cola, it seems that any shift in power would be essentially from one faction of an elite intelligentsia to another, or from one brand to another. To me, this means I'd react to any move by governments to usurp corporate power with indifference. It's plausible, but it's not something I think changes anything.

It seems that the bigger story here, though, is how the assets in a deindustrializing society will increasingly prove to be unmanageable liabilities. I believe this is what you were speaking of in your hypothesis of catabolic collapse.

This means that whether it's Executives, Politicians, Philosopher Kings or the Proletariat who control the Infrastructure of Industrial Society, they're going to be sourly disappointed.

Both the State and the Corporation, as institutions, seem both to be in an attempt to break with one of the fundamental laws of life. Everything living will die. Both act as if they are permanent, their permanence is assumed by most, and neither seems willing to attempt to cope with death as if faces them.

I guess I see peak oil as forcing the economic and political systems of today towards death. With its contraction I think we will see an emergence of saprophytic organization as regional and local powers vie for control of materials and trade routes. Whether they're looting the factories of Detroit under the brand of General Motors or State Motors seems irrelevant.

I suppose then what puzzles me here is that what I've just stated is largely an argument synthesized from various sources but in large part from an interpretation of your work to date. This move into discussing large-scale intentional change of any sort is not where I expected you to go next.

Looking forward to reading what's next.

in good heart,
Evan

Thai Up said...

I must agree with those who stress that personal liability is the key. After all, the only real reason to set up a corporation at all is to avoid liability. If corporations were simply outlawed, you would be reclassified as a partner rather than a shareholder. You could still have a stock exchange of partnerships. You could still tax partnerships separately from individuals. However, if you knew you could lose everything including your home by investing in an unethical business, you would be very careful about who you partnered with.

That would lead to smaller companies with more direct oversight. Directors of the partnerships would be watched over mercilessly, and the instant they stepped out of line would have an army of partners on their backs. People would stop looking only at profits, and look at the entire picture.

Transnational mega corporations are not necessary for the proper functioning of either democracy or capitalism, and simply removing the veil of a corporation or LLC and allowing responsibility to flow directly to the investors would seem to be the simplest and sanest solution.

John Michael Greer said...

Averaging, thanks for the link.

Glenn, yours might also work well; the only reasons I suggested the less drastic approach is that, first, the corporation is a useful bit of social technology -- a lot of nonprofits and cooperatives, for example, benefit from it -- and second, I suspect it's more likely that a simple expansion of criminal law could get established than it would be to overturn 150 years of legal precedent.

Sudi, it's exactly the large corporations that are most likely to treat lawbreaking as just another part of doing business. Making them do the time if they do the crime, so to speak, is exactly the point of my proposal.

Tiago, we'll doubtless get all kinds of nonsense of the Caribou Barbie variety before the rubble stops bouncing. My proposals are aimed at the aftermath of that.

Kyle, thanks for the link! I'll check Olson out. As for ways to dodge responsibility, remember that if KBR was a subsidiary of Halliburton when the crimes were committed, under the proposal I'm making, Halliburton would still be facing charges -- especially for capital crimes, where there's no statute of limitations. Criminal law is a lot less easy to dodge!

Hapibeli, they need incentives for that. I'll be talking about that next week.

David, yes, it's an interesting question. I suspect that if natural persons were subject to corporate law, they'd behave just as badly.

Antony, thanks for the correction! Of course you're right; still, the lack of any penalty between wergild and outlawry was a significant lack, remedied fairly early on in the history of common law.

Scott, not a chance. The loss of control is as important a deterrent as the loss of money. Nor is a government-appointed trustee a death sentence, for heaven's sake -- you might check out current bankruptcy law, in which trustees appointed by the courts play a significant role.

John Michael Greer said...

Dr. Pangloss, thank you, but take those statistics and compare them to other industrial nations that have less dysfunctional and corrupt health care systems than we do. Most of the change in death rates between colonial times and now is a result of sanitation, not medical care, and most of the remainder comes from one technology -- antibiotics -- which is rapidly failing because of indiscriminate use by the health care industry. Finally, of course, the fact that some other causes of death have decreased doesn't change the fact that our health care system remains the leading cause of death in the US -- and nearly all those deaths are preventable, too.

Irrational, thanks for raising a good point. It wouldn't be too hard, actually, to amend the laws to make it a very, very bad move to dissolve a corporation in order to get out of crimes: if a corporation dissolves, have the legal liability for its actions devolve directly on its officers and stockholders, and remain there. If the corporation no longer exists to do time, they go to jail in its place. Problem solved.

HeapSort, good. Very good. Of course this is exactly the problem, and it's one of the issues I've raised here repeatedly: it's a waste of time for people to expect their politicians, or their business leaders, to maintain standards of ethics they themselves are unwilling to live up to.

Anja, in theory, we've got personal accountability, and it doesn't work. The reason it doesn't work is that the stockholders are perfectly willing to see an executive or two thrown to the wolves; after all, they pocketed the profits.

A corporate death penalty could always be applied by the courts in a way that would maintain necessary services -- in your example, the factory that makes medical equipment could be auctioned off intact to another company that would operate it. The stockholders and creditors of the original company would still lose everything, which is the critical point. As for the employees, well, they usually know when illegalities are happening; if they stay on, they're arguably accessories to the crime. I know that's harsh, but there it is.

John Michael Greer said...

Ariel, the name of the game is already changing, but it's not guns in the hands of individuals that will settle it. Let's just say that the little wars we've got now are not a representative sample of the way things usually work out when empires decline and fall.

Evan, good. Yes, these last two posts -- and several others to come -- are off to one side of the main themes I've been talking about, but a great many things that are not of high importance from the broad perspective of the Long Descent can be of very great importance to individual human beings along the way. That's part of what I'm talking about now; the rest...well, we'll get to that.

Thai Up, understood, but the points I raised with Glenn above apply to your proposal as well. You're aware, I trust, that you'd also be abolishing cooperatives?

Colin said...

JMG,
I suspect that you've pretty much nailed the problem with corporations, and given the right solution. Whoa, but implementing it! I guess i'll have to wait for next week. What frightens me is the inablity to form any kind of consensus. Democracy was supposed to be about negotiating a consensus between the individuals in society, but it seems to have become a form of Elective Tribalism. Where we make no attempt to negotiate consensus but just vote for 'our side' against the 'other side'. And if 'our side' 'wins' then we force through our policies regardless of what the 'other side' thinks. Each lobby group is now a tribe, fighting for its victory, with no intrest in society generally. Legislation is no longer the description of the coherent implementable policies that was decided on by a social consensus, but instead, legislation is a fractured-selfcontradictory role call of the individual battles wone by different lobby/tribes.

I love the wergild analogy. I also love the way legislation has so many unintended consequences - when the Normans invaded england and discovered the wergild system they realized it didn't work and tried to improve it: In the case of murder, every member of the murder's village would be forced to pay the wergild. Even if you have the money to pay your neigbours mightn't, so the normans thought social pressure would take care of it -- ha no chance. What actually happened, is crime organised itself on the village level. They'd murder someone then dump the body in the next village over, thus forcing the next village to pay the wergild, and if that village discoved the body before the magistrates, they would throw the body back. Soon there where cartloads of bodies being shoved arround the english countryside like a macabre game of pass the parcel.

Doug W. said...

Good post. It does presume that corporations status and power will relatively consistent during the coming transition. It should be remembered that when America gained independence corporations existed for only quasi-public purposes such as toll roads and canals. But a broader consideration is the larger context that gave rise to the modern corporation--the industrial revolution. The corporation was made possible by abundant natural resources, and the need to organize capital and labor to best exploit them. With the resources declining many corporations may simply wither away as resources become depleted and markets devolve back to the national and local level. For a more detailed discussion read Walter Prescott Webb's, The Great Frontier.

John said...

At last! Someone's describing what's wrong with the corporations with a clear eye and without decending into ideological gobbledegook. Thank you.

If someone were to come here from another planet and check out our large corporations and then learn that they were considered 'persons' legally, they would surely be puzzled. In terms of their size, power and reach, the large multinationals of today more closely resemble quasi-governments than persons, and should be regulated accordingly. If they were, it would be possible to ban lobbyng and massive campaign contributions - something that can't be done now because it would violate the corporate persons 'freedom of speech' rights. As you point out, though, a reform of this magnitude would be very difficult to enact at this time.

Another reform you didn't mention is in the area of corporate governance. You said in your post that the shareholders should be made to pay for the crimes of the corporations they own. True, but it should also be mentioned that the shareholders, even large ones, do not have a lot of power to control their corporations.

An example of this occurred in the '80s when Boone Pickens decided he wanted to take over Lockheed Martin. He acquired something like 25 ot 30 percent of the shares in the open market before announcing his intentions. The compapny immediately passed several poison pill provisions, effectively preventing him from aquiring any more shares. They then changed the voting rules so that he couldn't even get a single person of his choosing on the board of directors. Eventually he was forced to give up and sell. If someone who owns 30% of a company can't have any say in how that company is run, what hope do small holders (like me) have to keep a company from doing what it shouldn't?

Corporate governance reform is long overdue.

disillusioned said...

Hi all,

I'm pleased that JMG takes us down this road... I was intending similar in last week's comments but didn't as I was not sure it would fit. But here we are anyhow. Here's what I intended to say:

Capitalism has many advantages - the greatest being dynamism - but alas has no moral compass (which is, I'm pretty sure, a deliberate feature).

Let's backtrack to a key moment - England, June 1215 and King John being forced by rebellious nobles into signing Magna Carta.

Why relevant? King John was forced to concede a key principle: the link between authority and responsibility. Although Magna Carta dealt with specifics, the underlying principle asserted is: Those who would wield authority must accept commensurate responsibility.

And responsibility is something Capitalism actively seeks to evade, for it drives up costs from “free” to perhaps “impossibly expensive”. Throughout history the profit principle has focussed on minimising costs, and by implication, responsibility. Lands and peoples (as slaves) have been seized and put to work. Those with power (wealth or force of arms) seize authority over resources and take profit from commanding that authority - while plain ignoring responsibility. Mining and tailings, slavery and wage slavery, refuting the consequences of lethal products - these and more focus on the benefits of authority while ignoring the costs of responsibility.

But often consequences remain... when these loom large and become impossible to ignore there arise a whole range of denials and obfuscations which try to dance away from the responsibility.

I applaud the idea of making Corporations more akin to a person, but I would like to somehow get a moral compass built into the system coupled with a sense of responsibility. But I fear its unlikely, for such "ethical Corporations" would have higher costs and are like (over the years) to fail the Darwinian struggle for survival. They are handicapped vs. the remaining irresponsible companies.

It would take a _global_ change of the law enforcing responsibility to make this work aka “a level playing field. And it is for this reason that I suspect it will not happen. It's just too easy to move industries out to another country with lax laws :(

Ro said...

Dear JMG,
Speaking of holding corporations accountable, immediately after reading your post this morning, I read Ilargi's new post over at The Automatic Earth. He spoke of the situation in Iceland where apparently the Icelandic people have petitioned their president to refuse to bail out their country's -- or as they put it, those that just happen to be in their country -- failed banks. I realize they are a small nation of only 300,000 or so, but they have spoken out and taken a stand. Now, if only this information would be widely distributed in the USA, it might get a reaction from the American people, and perhaps kick-start the revolution.
Thanks for the thought provoking essay.
Rosalie in Missouri,
who still owes you and Sharon a beer.

Ricardo Rolo said...

Well, technically the two comments that said that corporations shareholders aren't liable by the companies misdeeds (are correct ( it is in the legal definition of corporation ;) ... a entity where the shareholders can be responsablized by the misdeeds of the company can never be a corporation ), but I guess you are using "corporation" in a broader sense, so fair enough.

In fact a corporation is never a true "person", we only pretend it is: like a text I read in the net somewhere, if corporations were really persons in the eyes of the law , there could not exist shareholders or they could not be sold, bought or extinct ( given the laws against slavery and against murder ). The real issue is how much of personhood we want to recognize to them. It would be so nice if we could insert Asimov laws into their programming .... well, maybe the third is too much ;)

Well, I guess the main punishment will be when, as you point, corporations lose power ... war is bad for big companies in general as you pointed ( not saying that some will not survive and prosper, but in average war is bad for corporations )due to both rationings and increased state control. And the times coming are not of peace or of big space for money games... But things can go to other paths, like corporations grab land and erect private states ( that is a very beaten path in the western story, from Rome days until the last century, when corporations bought literal states inside some countries, like United Fruit did in central America ) or simple takeover of the power by a corp or a group of corps to try to leverage the money while it still has some value... We will see... But it is certain that money will lose power and that, like it happened more than once in Europe in XIX century, people will join paper money to burn because it wasn't real money ( and those days monetary follies look wise compared with our times ones ... )

WNC Observer said...

JMG:

A couple of things:

1) England did not just have common law, they also had Equity. It was in courts of Equity that one could get such things as injunctions and restraining orders when the cash settlements of common law were inadequate.

2) No doubt the response of big corporations to your proposals would be: "No way! It would be impossible for us to stay in business under such an environment." Which in turn leads to the question: If they only way that the big corporations can stay in business is to be exempted from any serious consequences for criminal behavior, then why should civil society continue to abide their existence?

This same line of reasoning pretty much applies to the phenomenon of externalities as well. Corporations fight tooth and nail against being required to eliminate their externalities, or to pay just compensation to those who are harmed by them, and also claim that holding them to zero externalities would likewise render their continued operation impossible. And again, if this is so, then why should they be allowed to continue to operate?

If the only way that corporations can operate profitably is to harm innocent people, then are we not justified in considering them to be a public menace and enemy?

hapibeli said...

well said Colin!
" but it seems to have become a form of Elective Tribalism..... "

Just check out Canada's current parliament and the Prime Minister's maneuvering against the same type of maneuvering by the blindered opposition parties. The good ole US of A is not alone in dysfunction.

Cherokee Organics said...

Excellent post. Corporations and their directors and boards are self interested. Our society currently does not bring them to account for their actions and they have massive resources at their disposal with which to fight changes which will negatively impact them. In Australia there has been much talk in the media about capping executive pays and it has simply vanished over the past few months.

The future can only play out in one of two ways: Sustainability or Destruction. There is no middle ground on this issue. Human societies have been faced with these issues before and mostly they go the way of the path of destruction. It would be worthwhile reading Tim Flannery's book "The Future Eaters" which looks at this issue from an historical and ecological perspective. Very disturbing but necessary reading.

wirespeed said...

Nice idea in theory, this killing of companies, but the social cost would be atrocious. Imagine Dirty Rotten Scoundrel company is liquidated. What of the hundreds, or thousands, of people that get thrown out of work through no fault of their own, other than being "guilty by association".

And then they might find their employment value tainted. "Oh, you're from D.R.S are you? Looking for a job? Hmm, don't call us, we'll call you".

At the bottom of it all, companies are just people, and 99% percent of the people who work in companies have little to no power to shape the way the company behaves.

Kevin said...

These proposals sound good to me. I'm no expert on taxation so I can't really claim to have an informed opinion. Hitherto I would have given them zero chance of passage at any time, under any circumstances. Over the past thirty years I've found my countrymen so complacent, uninformed and apathetic that I've long since despaired of them. Therefore what you say about the lessons of history sounds quite encouraging. I guess when things get really tough we may see significant political changes after all.

Not precisely on-topic for the week, I wish nonetheless to offer the following image for perusal by those who I think might appreciate it, and all that it bodes for the future. I think of this vessel as the Exxon Ozymandias:

http://www.flickr.com/photos/azrainman/991225765/

wylde otse said...

JMG,

The preponderance of comments seems to side with your views for 'corporate accountability'.

In a way I see a bit of mouse-wisdom here too; the small problem of "belling the cat".

Mentioned too was the fact that the corporate executives did not necessarily personally have power to alter course or direction very much. In Canada a few years back, new rules tightening responsibility and liability for company directors were brought in - I don't know to what significant success.

For most of my life - ever since I studied insects as a child - I have been fascinated in the relationships between the individual and the collective. Conciousness, in my studies, is not the exclusive state-of-being for hominoids. (Asimov went even further in his millenium AI address - suggested we make 'friends' with our computers.)

I am propounding a paradigm for an "awareness, and consciousness" for the corporate body that is distinct and which transcends the invidual entities which comprise it.

I have a quantity and quality of evidence to support this outrageous claim - and it will be my one non-fiction book. Why I enter this here is because, true to my heart, you have touched on the essence that the Corporation is 'alive' and 'aware' of its existence.
(so could we blame them for wanting to be recognized as 'persons' - something women in Canada achieved in 1928)

In which case, "Housebreaking the Corporations" might be no farther away than a rolled-up newspaper.

Wylde Otse

Roboslob said...

Hi JMG,
The discourse between you and Irrational got me to thinking that there are actual people behind all corporate crimes, and those actual people need to be punished.

Coy Ote said...

JMG - I read several blogs, yours, TAE, Wilderness, some right and some left. This (your quote below) is the conclusion many have come to, myself included, due to the education folks like yourself and others have shared with us!
I wonder how this perspective can ever be widely published and therefore shared as long as the media and political powers continue to ignore it?

"...the root of most of today’s problems is the simple fact that most of the people on our badly overcrowded planet demand lifestyles that the Earth’s resources will not support for much longer. Until that changes, nothing else is going to change – and nobody has yet suggested a plausible way for that change to happen that doesn’t involve a vast number of deaths and the decline and fall of industrial society..."

gardenserf said...

Corporations actually have more legal protections and privileges than people do. Try using a carry forward loss on your next individual income tax return with the IRS and see how that works :-)

WWI and WWII allowed for the consolidation and strengthening of many global corporations. Millions of people were killed, but the same corporations remained "alive" afterward.

It's difficult to have gov't police the corporations when both are often entwined in the problem. A perfect example was the cover-up regarding Factor 8:

http://gardenserf.wordpress.com/2009/11/25/trust-once-lost-is-hard-to-earn-back/

For the corporations to be housebroken, they need a master who has a firm hand. The hard part is who do you give the rolled up newspaper to?

James Andrix said...

Wouldn't a simpler way to deal with at least some of these issues be to get rid of limited liability in the first place?

If a $100 share could turn into a $20 debt to pay fees and restitution, then investor will be more demanding of caution, not just profits. Institutional investors would be ripe targets for collection, and so would be that much more demanding.

Also, I think in your plan the names and trademarks should also be auctioned rather than banned, as they may be among the most valuable assets.

rj.king said...

JMG
I am convinced that you don’t really have much of a grasp of contemporary capitalist class society.
Although some of your proposals might seem to ameliorate some of the greater excesses of corporate domination they really leave the basic exploitative system intact. Considering that capitalism is governed by its own natural laws just as is everything on planet earth, I would pose to you the question of whether your proposed reforms go against those laws and in fact can’t be achieved because of the stiff resistance inevitably offered when corporations feel threatened. The famous example of Guatemala in 1954, Arbenz’ government vs. United Fruit Company comes to mind. Simple land reform caused a U.S.-backed coup.
Reform of capitalism ebbs and flows over many decades. Trust busting during Teddy Roosevelt’s time has yielded to the mega mergers of our contemporary era. Reforms take place under very specifics conditions including whether we are in an ascending or declining economic cycle. It seems that due to the colossal mess we find ourselves in thanks to peak oil, peak resources, economic collapse, etc., that even cosmetic reform is less likely.

Speaking of evil: Do you think Osama Bin Laden thinks he is evil? My guess is he thinks the U.S. is evil. It seems we need a good working definition of evil otherwise evil is in the eyes of the beholder; maybe it always will be.

I am not one to consider corporations any more evil than one would consider a wolf preying on a defenseless little fawn. Capitalism is an anarchic unplanned system by its very nature. Imperialist war, poverty, and a whole lot of other “evil” byproducts are also part and parcel of the system. It isn’t for a lack of trying that people have tried to smooth out the horrible excesses. One can list all sorts of failed attempts at ending war and poverty. Perhaps we humans are hardwired for aggressive resource-dominating behavior. We do have basic biological parameters to work within. Let’s hope evolutionary biologists can help us to a greater understanding of what really is human nature.

About your diffused power idea, I am less convinced than ever. We have a defense budget that sucks up over three quarters of a trillion dollars. We have a class dominated society more stratified than since the days of the robber barons. Comparing retirement groups and other similar organizations as having some form of power parity with insurance companies and defense contractors is absurd. Power is wielded by those with the economic and political muscle. This is a relatively small, concentrated economic class of people. They are keenly aware of their common class interests and they defend them aggressively from any perceived threat.

We are going through a transition period that will likely dramatically change social and economic relationships and shake industrial society to its core. One thing is for certain as far a I am concerned and that is that our current economic system with its class structure is doomed.
RJ

John Andersen said...

I found this article interesting, and gained new insights from it.

Perhaps I'm too simpleminded, but I still think the best way to housebreak the corporations is not through legal means, but rather through educating people to religiously buy local.

If the masses turned their backs on the big corporations and instead bought goods and services through local suppliers, and manufacturers, wouldn't that have an effect on the big corporations?

I'd like to think it would.

My focus remains taking every opportunity I can to influence people to spend their money locally.

John Michael Greer said...

Colin, well put. I'll be talking about one of the roots of the failure of social consensus in the next post.

Doug, in the middle to long run, you're almost certainly right -- the corporation as a social technology only makes sense when economic activity on the large scale is possible, and that's a temporary phenomenon. For the time being, I'm discussing measures that would deal with the challenges of the next fifty years or so.

John, granted, there are a lot of details of the way corporations are currently run that don't work well. The shareholders do have one source of power they don't use often enough, though, which is the right to sell. If corporations that abused their shareholders had their stock lose value because a lot of shares were being dumped, it would be interesting to see the results.

Disillusioned, the problem with installing a moral compass into corporate law is the same problem that attempts to legislate morality always face: who gets to decide what counts as moral?

Ro, expect to see more examples like that of Iceland. My guess is that the age of corporate power is rapidly waning, as it did in the wake of the First World War.

Ricardo, true enough.

WNC, of course corporations whine incessantly when you tell them they can't have everything they want. So does everybody else -- listen to the retiree lobby sometime. In the 1920s business interests insisted that giving labor unions the legal right to strike would make business impossible in the US. Roosevelt legalized it anyway, and business still managed to do just fine. There's a wide gap between rhetoric and reality!

Wirespeed, corporations today have the unquestioned right to shut down their facilities in this country and offshore their production to Third World sweatshops, with the same sort of social costs you're claiming are insupportable. Do you also believe that criminals ought not to be put in jail, because their families will be deprived of a breadwinner?

Kevin, love the picture! "My name is Exxonmobil, Corp of Corps..."

Otse, systems theory would suggest that any sufficiently complex system acts like an organism, and displays emergent properties not found in its subsystems. That certainly applies to corporations.

Roboslob, granted, but if the shareholders and directors aren't also made to pay a price, the incentive to find somebody willing to do the crime for them will still be there.

Coy, I expect that realization to make it into the awareness of the general public about the time that pigs sprout wings. Long after the rubble has stopped bouncing and the days when men flew to the Moon are a matter of legend, people will still be trying to come up with some other reason why everything fell apart.

Serf, that's one of the reasons why I'm suggesting a proposal that will give governments large, meaty incentives for turning on corporations. Right now they have no such incentives -- all the pressure is in the direction of getting along.

James, that's also an option, but the corporation is an elegant and efficient bit of social technology; it unquestionably needs to have the bugs worked out, but I don't think it needs to be scrapped altogether.

RJ, you know, ever since the 1940s Marxists have invariably responded to critiques of Marxism by yelling ever more loudly about how horrible capitalism is. Nice to see the old tradition is still intact, but it dodges the issue I raised in my response to your earlier post: capitalism may be bad, but Marxism has proven itself to be even worse. Curing a headache by cutting off your head is not a good idea, and no amount of insistence that the headache is really, really painful will make it one.

John, sure, if you can get people to do that. The effort's been made repeatedly over the last three or four decades. How well has it worked?

Tiago said...

I find it somewhat contradictory that you dismiss some proposals made here as irrealistic and at the same time propose taxation (previous post) and corporation breaking. I would imagine that you might argue that e.g. high taxation actually did exist in the past (even with Reagan and up to massive values with FDR) and as such it is not "irrealist".

But, from my understanding of the current USAian cultural standpoint, taxation is anathema.

In some sense your proposals sound as much as unbelievable as some that you deem unfeasible yourself.

Note that I think this is the best time to start laying the seeds for something different (being a time of transition). I just think you are wrong in dismissing some of the proposals made here as less possible than your own.

Charles said...

It pains me, after the amount of inspiration and food for thought that your blog has provided me over the past several months that my first posting is in disagreement with you in your latest post. Please believe that I really am a fan and supporter.

Perhaps I'm among the more guilty when it comes to blaming much of the evil our current world on Corporations, but I also freely acknowledge that there's more than enough blame to go around. Corporations are particularly to blame in my opinion, because, the very principle for which they were created is, in essence, to avoid repsonsibility.

In spite of this, as corporations currently exist, blaming shareholders is no more accurate than blaming a corporation's customers or clients. Except for those holding significant percentages of a company's stock, shareholders have little or no voice in a how a company is run either by voting their shares (even as a block) or by dumping shares. Small shareholders don't even register as statistical noise in contemporary markets. The vast social, economic, and political power wielded by the modern corporation is in the hands of those few individuals at the top, and it is they who should be held personally responsible for their company's actions or inactions.

skintnick said...

Could I just ask again if there is a way of printing comments for reading in the comfort of my cosy living room instead of poring over a screen in the chilly office?

Raymond said...

I take exception Mr. Grier; with your belief that "employees" should suffer the brunt of the corporation's fall. Do you include the mail clerk, the cubicle grunt and the after hours maid? Look at how many "infantry" employees were summarily dismissed here in the USA alone over the past year. Most had little to no clue that their companies were going belly-up. The Arrow Trucking debacle is one such example.

Hang (literally!) the Managers on up, but don't pretend that the "grunts" have anything more than rumors and a few trickled-down memos to secretaries here and there to ever really know what the heck is going on.

John Michael Greer said...

Tiago, if a proposal has been tried repeatedly in the past, and hasn't worked, it's probably not a good idea to keep trying it.

Charles, why should it pain you? You might want to go read my essay on dissensus sometime. I don't expect everyone who reads my stuff to agree with me; the point is to encourage people to think outside the box.

Skintnick, other than highlighting, copying to a document file, and printing them out, I don't know of one.

Raymond, you seem to be reading quite a bit into what I've written. Unless a company engages in the most egregious crimes, the employees will be fine; it's the shareholders who lose their shirts, as they should. If the company does engage in egregious crimes, it's certainly an option for the court to order it auctioned off in chunks large enough that employees keep their jobs. In my experience, mind you, employees down at the bottom of the pyramid do have a very clear notion of what's going on -- certainly when I was working as a wage slave in minimum wage jobs, before my writing career took off, it was generally those of us in the trenches who knew exactly where the bodies were buried -- but that's a secondary point.

Sid said...

Hi Arch Druid,

“Whenever power has been diffused to the point that no one power center can carry out its agenda without the consent of many others, any well-organized faction becomes a power broker.”

This of course points to Bogdanov’s distinction of three types of system state: organised where the sum is greater than its parts, disorganised where the sum is smaller than its parts, and neutral where the organising and disorganising elements cancel each other out. It seems that governance and the systems that support it be they private or public are moving towards the latter two states. Also the means and end have been confused. For example that government provides governance, or a corporate entity provides goods and services, often it is now found that the 'corporate entity' in both cases has usurped the ends towards itself so that the end result is a proliferation of means without end! Thus instead of governance we end up with more government, and instead of better goods and services we end up with bigger corporations.

And in terms of cybernetics they indeed might end up as terminators! Witness the rise of the 'Bio-fuel' corporations! In contrast see this great example of using feedback loops (after Norbert Weiner – Capra, 1996 “Web of Life” is a good introduction to systems/cybernetics thinking) as means to radically enhance the ends, in this case livestock production:
http://www.ted.com/talks/lang/eng/michael_pollan_gives_a_plant_s_eye_view.html
It also highlights the sort of change in perspective (i.e. from a ‘plants eye view’) that is needed to break down the current Cartesian dualistic thought patterns. The Polyface Farm mentioned in the talk can be found here:
http://www.polyfacefarms.com/default.aspx.

If one thing is clear, it is also the need for a reduction in scale and a devolution to a more human local level for both governance and the production and provision of goods and services. Which if I'm right is what the whole transitions initiative and sites like this are about.

Best Wishes,

Sid.

Peter said...

Adam Curtis is a documentary film maker for the BBC. Over the last 15 years or so, he's made a number of documentaries which beautifully illustrate many of the issues discussed on this forum. He hasn't produced anything on energy, but his political and sociological work is excellent. You can find most of these videos on the internet. Here's a list of his most relevant work:

1992: Pandora's Box examined the dangers of technocratic and political rationality.

1995: The Living Dead investigated the way that history and memory (both national and individual) have been used by politicians and others.

1999: The Mayfair Set looked at how buccaneer capitalists were allowed to shape the climate of the Thatcher years, focusing on the rise of Colonel David Stirling, Jim Slater, James Goldsmith, and Tiny Rowland, all members of The Clermont club in the 1960s.

2002: The Century of the Self (BBC Four) documented how Freud's discoveries concerning the unconscious led to Edward Bernays' development of public relations, the use of desire over need and self-actualisation as a means of achieving economic growth and the political control of population.

2004: The Power of Nightmares (BBC Two) suggested a parallel between the rise of Islamism in the Arab world and Neoconservatism in the United States in that both needed to inflate a myth of a dangerous enemy in order to draw people to support them.

2007: The Trap — What Happened to our Dream of Freedom (BBC Two - working title Cold Cold Heart), a series regarding the modern concept of freedom.

tedd said...

JMG,
Have you read Eric Hoffer"s "The True Believer"? It came to mind reading this post. As I recall, commitments to movements are more likely to come from those who lose some standing than those "born to" the current situation.

Casey said...

The argument changed drastically as of yesterday. The Supreme Court ruling yesterday extended more rights of "personhood" to corporations. Allowing corporations to make unlimited campaign contributions to the bureaucrat of their choice, directly. The result being that in the very near future there may not be a distinction between government and corporations.

Brian Gordon said...

I entirely agree with holding corporations accountable as humans would be. It is moral and fair. Of course, corporations currently spend a great deal of money and influence to legalise immoral acts they wish to pursue, and how this would be overcome I cannot see at this point. As the article suggests, a crisis may well be the social tipping point that allows the power of the corporations to be curbed. We came close with the bank meltdown, and I am sure one reason world leaders so quickly threw our billions at the banks was fear that a serious collapse would have people questioning the entire economic system.

Currently, we have CEOs committing or ordering clearly immoral acts - stealing, cheating, killing - that they justify as "just business." I think one possible start to holding these psychopaths accountable may come from the G77 developing countries; I have encouraged them to charge people like Rex Tillerson, CEO of ExxonMobil, with crimes against humanity for funding climate denial and obstructing action on same: http://www.briangordon.ca/2009/12/why-we-should-charge-rex-tillerson-with-crimes-against-humanity/.

Bullsam01 said...

Thanks for your writing ... it's a nice find on a dreary weekend. As for the demise of community, have you read Martin Pawley's "Private Future?" Published in 1974, it predicted that the attractions of home entertainment technology would overwhelm our feeble desires for community. Long before cable TV, before the Internet, before even the walkman, Pawley, who spoke from a architect's vision, saw our insatiable desire to please ourselves.

Michael Gersten said...

I just found out about your blog; someone posted a link to this article on my blog on a similar subject. Today, I addressed this with this post:

Consider one company at the start of this whole economic mess. A bank, that was in the business of "junk loans". Instead of junk bonds, many of which would be worthless, you had junk bond funds -- lots and lots of junk bonds, so that even with some worthless, the whole group paid well. Now take that same approach to home loans. Lots of loans, many worthless, sold and packaged as a group.

One Monday, that investment bank was $120 per share. Employees there were required to keep their retirement package in, at least in part, company stock.

By next Monday, the banking regulators had shut it down. They turned down a $4 per share offer, for a $2 per share offer. They wanted the death of the bank to hurt.

But they wound up hurting people whose job required them to invest in that bank, more than people who had the choice to invest in that bank.

What's the problem?

1. Lack of information. Had the true state of Bear Stearns been known, there's no way it would have had a share value of $120.

2. Lack of choice. Employees that are forced to choose from a company's choice of stock investment options are unfairly hurt by this.

Archdruid also makes the same mistake that the SCOTUS made -- the confusion between "corporation" and "Corporation that exists to make profit". Note that I'm also trying to distinguish "Corporation that makes profit on behalf of shareholders, publicly traded". A private corporation really does look like a group of people getting together as a group to excersize the rights of people as a group.

Maybe private corporations need to lose the liability limits that public corporations have. More rights comes with more responsibilities. Isn't that what we teach our children?

Is that what corporations are today? Children that have no parents?

===
I think that you are wrong when you say that "bottom level employees know what's happening". In the case of Bear Stearns going under from holding onto junk loans instead of selling them all off, and in the case of AIG's credit default swaps on the demise of Leimann Brothers, no one knew because no one had the information. It wasn't a case of "If you spend enough, you can get the information you need to make an informed choice". It wasn't available.

Death of a corporation isn't trivial -- look at the accounting firms. One big accounting firm went under a few years ago because of problems, and the bottom employees became the worst victims.

Equally, there is a big difference between a corporation that is required by law to take action consistent with profit for shareholders (to stop robber barrons of the 1800's), and a group of people who get together to jointly spend money on a political issue (such as a political party). Saying "We exist to change the laws" is different from "We exist to create a product; the best way to profit is to change the law benefiting us and harming our competition. Maybe we can make our product a required purchase of all Americans?"