2.22.2011

Reimagining the Corporation



So I finally watched the documentary, "The Corporation," and was astounded to learn that corporate personhood was unleashed along with the 14th Amendment. That is to say, the very Constitutional move that nominally sought to assure recently freed blacks had equal protection under the law was the very same move that birthed the modern corporation: a virtual person, albeit devoid of liability.

It's too perfect: the end of one form of tyranny — nominally, that is — and the birth of a new form in the same breath ! (Well, corporate personhood was officially established in 1819. But, in 1886, with the 14th Amendment, corporations asked to be treated like everyone else — and won that right! It's literally insane and marks the birth of the virtual entity, long before the internet.)

For those who might not know what I'm talking about, corporations in this country have the same legal rights as individuals — they can enter contracts, sue and be sued, buy property. You may say, "Duh! Of course." But not of course. It's actually incredibly strange: a corporation is not a person — it has no feelings and no body. It can't go to jail. And it has no interests, by definition, other than profit. This is not true of human beings, even incredibly greedy human beings. Because even the most greedy motherfucker wants to eat, sleep, dream, pee, think, emote, opine, speak. A corporation is not anything; it is thoroughly virtual. And, again, is has — by definition — no other interest than maximizing profit.

When corporations first began, they did so at the behest of the public good, offered their corporate status by the government in order to serve the public good — to build a bridge or mine coal. This corporation was severely limited in what it could do — it could not, for instance, buy other companies. It could not go public. Its reign and purview were limited by the terms of its incorporation.

But, with the 14th Amendment, corporations claimed that, as people (you following me? It's bizarre and insane), a corporation should be free to do as it pleased within the boundaries of the law. Just like anybody else. Again: did you hear me? Just like anybody else.

And so the modern corporation was born and, very quickly, began to take over basically every aspect of life, including the legislature, the police, the military. The government fights wars to defend corporate interests — and yet the corporations don't pay for the war. We do. No fair!

Corporations are persons — bereft of sentiment and body, of course — who act with relative impunity. After all, you can't put a corporation in jail — it's a thoroughly virtual entity. And you can't put the officers in jail because they work for the corporation and hence have limited liability.

If a group of individuals were, say, to dump enormous amounts of pollution into a river causing birth defects, cancers, and death those individuals would be arrested, indicted, stand trial, perhaps go to jail. A corporation, meanwhile, pays some fines — maybe — and — maybe — loses a civil action suit and pays money to those left dead and deformed.

And this is the normal functioning of this country! This is how corporations are legislated! It's madness. And it's not normal. It's not capitalism. It's corporatism in this very particular, relatively unrestrained form.

To limit what corporations can do is not to go against liberty for all, against the rights of the individual. On the contrary! Corporations are not people! They are tax and legal entities! They only exist because of a law that brought them into existence!

You want capitalism? Well, level the playing field and eliminate the corporation. You can do business; you can make and buy and sell. But not as a corporation.

So let's imagine, for a moment, how it might be different.

What might things look like if we eliminated the corporation all together? That is, individuals could get together and form companies but, legally, they would have to do business as a group of liable individuals. How might behaviors change? Would a corporation still be as willing to dump pollution? Release products that make people sick? Could they grow as exponentially (by eliminating all those individuals involved and creating one entity, the corporation, it makes acquiring money swift and easy: get rid of it and a business has to move much slower)?

Or let's keep the corporation but change the laws. What might we do? How about this: all profits exceeding x amount have to go towards employee pay, starting from the lowest paid? You want the right to be a corporation? Then that's what we, the people, require of you for that privilege.

What else? Let's re-imagine our corporate culture. What might we do differently?

20 comments:

Jeff M. said...

The concept of limited risk that the corporation embodies is undoubtedly a good as far as capitalism is concerned. Economic recessions in our era (including the one we're currently in) are not the result of over- or underproduction, but of investors feeling unusually risk-adverse. (The housing bubble didn't pop because everybody who wants a house already has one, but because there wasn't enough money in people's pockets to keep the Ponzi scheme rolling).

However, I would say what's good for the goose is good for the gander. Universal health care that is not tied to one's job would go a long way in empowering people to take the calculated risks that make corporation so successful. People could start businesses and go back to school, for instance.

Ralph Nader used to talk about instituting a corporate death penalty for the worse offenders, but I imagine this would result in a farce of regulatory capture. Firms with political connection would just have their competition executed.

With the threat of peak oil and global warming, I would like to see oil corporations begin to pony up for the cost of the externalities they generate, but with the GOP being an arm of big oil it is hard to see had that would happen right now.

I think a lot depends on how well elites are able to shelter themselves from the problems. That was the big takeaway point in Jared Diamond's big book, Collapse. I have to say that I collapsed about 3/4 the way through that monster.

As far as getting rid of corporations, there is only one method as far as I can see: someone needs to figure out how to decentralize mass production. If economic life consisted of mostly face to face transactions, a) society would be much more egalitarian than it is and b) we wouldn't need vast accumulations of capital to feed, clothe, shelter, transport and entertain everyone.

More realistically, more private-sector unions would help.

what the Tee Vee taught said...

Arguably the "Greatest" of Man's extensions. Yet, the corporation is like a human. It was born. It grew at a wild rate. And it will/is decomposing and dying. The virus has almost finished off the host. So... I guess that's... nice?

I like Dupont. Amazing run. Barely escaped the guillotine, makes it to America, orchestrates the hilarious Louisiana Purchase, makes death... death... death... and then gets deeper into consumer death (plastics)... more war profiteering, creates the bomb (Hanford, WA is really thriving these days) almost destroys the Ozone (and, hilariously, ended up making an ass of money when their precious CFCs were essentially banned) and now look at them today. The family is largely crazy, and the entity, THE DUPONT, is still hanging in there. The Corporation.

Daniel Coffeen said...

@ Jeff: to your last point, yes, I imagine a distributed network of distribution, if you will. I'm beginning to see this in SF: a lot of local producers of food, clothing, and goods serving a local community.

I have to say: it doesn't seem so outlandish or unreasonable to me.

what the Tee Vee taught said...

You two are, I think, a touch optimistic. I certainly don't mean that as a pejorative. The power class knows the score. There is a reason for systematically putting all of the eggs in their own baskets. The time for mass exchange of labor and goods is quickly coming to a close... checkmate isn't reached on the final move, is it? And not just in America, although most other places figure to do a lot better than the deluded American in the post-essentially free energy world. The low hanging fruit, I'm afraid, is long gone... never to return.

Jeff: you mention decentralizing mass production. But, I can't imagine any MASS production of anything. It absolutely all runs on cheap oil... the whole thing. What could we possibly produce and distribute in mass quantities without dirt cheap oil? No plane rides. No big rigs. Sailboats? Yes.

Sure, they make these silly little cars that don't require "too much" oil (although, their production certainly is oil intensive)... but the trucks that race up and down the vast American highway, the beating heart of distribution... not going to run on an electric engine. The numbers aren't even close.

So... can you grow food? fish? hunt? use hand tools? sail? If not... join me in the "let's learn some shit that most everyone knew a few hundred years ago" club. Cuz you're going to need it, assuming you're not too old and want to live a longish life.

If you don't have a personal relationship with people who can get you what you need... you. will. be. fucked. Paper wealth will go away. But, all is not lost though. It's a big country. We'll just need to learn how to use it, or perish... no big deal either way. Just clever beasts, eh?

Oh, and teach your children. Dr. Coffeen, you have a young one, get him swinging a hammer and growing a garden... if he isn't already.

For our purposes, Nietzsche's aphorism has it all wrong: Understanding does not stop action, it'll get you off your ass, wishing you were a Boy Scout.

what the Tee Vee taught said...

And even if "we" find a magic potion to keep the engine running, by preparing for the seemingly inevitable, you'll have some fun (maybe some fun) and the calm of escaping the GROWTH GROWTH GROWTH cancer that is our society.

Daniel Coffeen said...

I think you may be the first person ever to suggest that I am optimistic.

Although, I will say, it was the tone I was aiming for. I think I've ranted enough, to no avail.

So I wonder what happens if I say the same things but in a different tone. Call it a rhetorical experiment.

what the Tee Vee taught said...

Hmmm, I feel a bit lost. You mention tone, and rants to no avail (surely, some avail).... Maybe I could figure it out. If you want to explain, I'd like to listen.

I like what you wrote. It's smart.

The Limited Liability Corporation was an absolute necessity. Assuming the goal is GGRROOWWTTHH. Surely, something that doesn't pee can't be trusted.

But, it is capitalism. On steroids. All hopped up, fat and ugly. And to say that they were birthed by law... sort of. Power rewrote the rules. That's all. Of course corporations aren't subject to the laws and penalties... neither are powerful people (unless, of course, their flaunting of the laws upsets the greater system, then they'll have to pay, or REPENT! As the film Network captures so well).

McLuhan writes about speed. Things move too fast, you lose track of yourself. Well, that's exactly what the corporation was here to do... speed it up and never stop and nobody will have time to figure it all out. Essentially, don't give people time and space to tell the difference between "truth" and "lies"... just get your ass to work.

I don't think the question is how to re-imagine corporate culture... we need to prepare for another change in the rules -- a lot less rules. And that just takes a commitment. The biggest hurdle, by far, is mental.

Enjoy.

what the Tee Vee taught said...

Sorry to nitpick your "content". I see what you're saying about tone.

Just takes some time.

what the Tee Vee taught said...

Ha. I was just laughing. I gotta tell you Coffeen... you have catalyzed a lot of good times up here in Seattle. My girlfriend, my best pal... we get a real kick out of how you go. Shit, this last month, the blogging spree you've gone on: a vital showing. And Fun!

Thanks Coffeen.

Daniel Coffeen said...

I ranted and raved for years about how capitalism drains life of pleasure — or at least drains me of pleasure. And all I succeeded in doing was make people hate me more than they already hated me.

Frankly, I thought my rants were funny. Alas, not everyone agreed.

Ergo, the shift in tone — less kvetch, more analysis with a question that suggests the said optimism. All a ploy.

Thanks for reading my onslaught, my barrage, of posts.

what the Tee Vee taught said...

The ploy was successful, who is this oddly optimistic man asking me to re-imagine (rather than ignore or smash) corporate culture?

It is very difficult, I suppose, to come to terms with a lived reality that doesn't even resemble the OFFICIAL reality. So is the American life. Then... sure, you tell people that the game they've been trained to play is vampiric bullshit, and they'll probably recoil. But...

Two sets of words, one you know, one you might not:

I am not one of those weak-spirited, sappy Americans who want to be liked by all the people around them. I don’t care if people hate my guts; I assume most of them do. The important question is whether they are in a position to do anything about it. My affections, being concentrated over a few people, are not spread all over Hell in a vile attempt to placate sulky, worthless shits.

The next:

The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected.

Burroughs and Chesterton

Enjoy the day, Daniel Coffeen


A bonus Chesterton thought:

A dead thing can go with the stream, but only a living thing can go against it.

Chad Lott said...

Some corporations are trying to develop triple bottom lines and whatnot to get their Green on.

It's worth thinking about whether or not this is an actual development, something like an evolving personality trait or just some marketing hocus pocus (some of it is for sure).

It would be quite a thing for natural corporate evolution to select the traits an expanding concious consumer base would want.

Is it possible for a virtual entity like a corporation legitimately develop a real set of values?

That would be the bees knees but I'm not holding my breath for that one.

Daniel Coffeen said...

@ Chad: The triple bottom line — I know it well — is nonsense. The fact remains: officers of a corporation are legally bound to maximize financial gain for shareholders — not for stakeholders.

The government could include stipulations for incorporation that included said triple bottom line. But how do you quantify, measure, environmental good or societal good?

Do not, by any means, hold your breath: you'll suffocate.

dustygravel said...
This comment has been removed by the author.
dustygravel said...

Man, every ones talkin' about the corporations, realtors, and oil but no one seems to have any thing to say about the banks. Weren't they the ones handing out all those loans to the irresponsible, and isn't paying off interest with more debt the most insane thing ever, and isn't debt the most insane of all virtual entities. This system will eat its self.

check out for a run down on Banking
http://www.youtube.com/watch?v=9VJ0ztMRyuU

My apologies if I'm to fare off topic, love the post as usual.

what the Tee Vee taught said...

Dusty: The banks (I assume you're talking about JP Morgan Chase, Wells Fargo, Bank of America, Goldman, etc.) are all publicly traded corporations owned by the super rich.

So, they handle the money... the Fed gives it (lends it) straight to them... so sure, they're essentially untouchable... unless you'd like to nationalize the banks, you commie bastard.

Chad Lott said...

I'm pretty familiar with the hokey Triple Bottom Line as well.

Everyone I know who cheerleads for it seems to think that it's the be all end all but stops just short of addressing what happens when company men just say, "uh, actually we'll pass on that."

There are more and more CEOs that seem to be decent types building decent companies with progressive culture built in. The products are good, the workers attracted share the vision and whatnot.

The problem is how to make that vision stay with a company after the founder leaves.

The Groovy Capitalists seem to believe the market will select against companies that turn on their values, but I haven't seen much evidence of that.

You are totally correct about the legality concerning duty to shareholder over stakeholders. It seems to adopt a triple bottom line (or something equally Utopian) would require actual litigation, which is not impossible.

The company I work for, Whole Foods Market, has done a lot to make sure the company stays on course after the head honchos leave. It's not perfect by any means (and I'm not willing to address off topic complaints against it at this time), but it seems to be the right direction.

Patagonia, Pangea Organics and smaller operations like Rainbow Grocery have all adopted mission statements that are integral to the operation of the business.

So my question is, is this evolution?

Robert said...

Corporations were created as a legal convenience. How could a group of people, organized for commercial purposes (a company) interact with other companies, protect themselves from individual liability for things the company did, and how should they be treated by the law? People are "natural persons" under the law: Corporations are virtual or unnatural persons. As you say, they cannot be penalized under the same criminal laws that apply to people, they can't be drafted to fight in wars, they can't vote in elections, etc. The Supreme Court, being in thrall to the Corporatist Republican Party, got real confused when it decided that Corporations should have free speech rights in the Citizens United case...just like real people. We need to not only re-imagine corporations but redefine their proper constitutional rights. They should have the right to due process, but not the same rights of free speech as you and me, for example. We need to look at each of the rights of the Bill of Rights and decide to what extent and how they should apply to virtual persons. Again, speaking as a lawyer, this debate is really a matter of Constitutional Law; not of Philosophy, although pokitical philosophy is very much enshrined in the Constitution. Unfortunately, the Corporatist Republican Party will fight tooth and nail to avoid any such debate, much less the hugely complex and difficult task of amending the Constitution, so we'll just have to leave it to the Courts. We can, however, make the subject a matter of national debate. Thom Hartmann has begun the process in books like "Threshold".

Robert said...

I would be very interested to follow this thread, if it continues.

Daniel Coffeen said...

@Robert: Thanks for the thoughtful comments. Let me ask this: Why the corporation at all? Why not let individuals enter into contracts with other individuals to form businesses — businesses owned by multiple individuals? Why limit liability? Isn't limited liability a key aspect of the problem here — CEOs run rampant over the public good, over the law even, and cannot be personally held responsible?

Incorporation does not seem like an inalienable right to me. Does it show up in the Constitution at all?

It seems to me, in my admittedly very limited and naive understanding, that the corporation has always existed as privilege at the behest of the government. It is not a privilege the government must bestow. And it seems like an opportunity for the government to fold provisions into the private sector without compromising the pursuit of happiness.