Corporations 3 comments

26 Aug 2002 @ 23:27, by Flemming Funch I think the legal fiction of a "corporation" is probably the biggest roadblock on the way towards a free society and a free market. A corporation is largely a construct used to scam many people into giving their power to the very few, who will use it for their own gain. Oh, I'm not talking about the construct that allows a small group of people to go into business with each other. That in itself is a good thing. But the first temptation is introduced in the fact that a corporation allows the active individuals to have limited liability for their actions. You can go out and make a mess, sell some junk, spend all the cash, run the business into the ground, and then walk away from it, even if there's a lot of people who're mad about not being paid or not getting the product they paid for. That of course makes it more acceptable to take the risk of starting a new venture. But it certainly also introduces you to the addictive idea that you can do things without being responsible for the consequences, and, even better, you can get others to do things for you, without being responsible for the consequences of what they do. The real problem appears when we scale it up, so it isn't just a small group of friends going into business together, but it is a small group of friends who control most of the activities of say 100,000 people, still without much liability, and who receive the fruits of the labors of all these people. A corporation is an artificial legal person. As such the corporation is liable for what it does. But it can have astronomically more resources available to fuel itself and protect itself than any real person has. If it does something wrong, it can have 50 lawyers working on its defense. If it needs the law bent, it can pay politicians handsomely for helping with that. If it has a message, whether true or not, it can paste in on billboards in all major cities in the world. Oh, it doesn't mean that it is automatically easy sailing when one is a corporation. It is hard to make a company work. It is hard to grow it big. It might succeed or fail, based on a great many factors. It won't do well unless enough people buy its product, and unless it can manufacture the product cheaply enough. Most businesses fail. But enough corporations succeed and enough corporations become huge, amassing resources equivalent to the GNP of small countries, that they become extraordinary influences on the world scene. What kind of influences? Well, the purpose of a corporation is to make a profit. It doesn't have to be that way, but it is hard to make it otherwise, based on the agreements the corporation is part of. There is a responsibility to the shareholders to make as much money as possible. And the shareholders for a big corporation usually aren't the same people who actually run the company. The people who run the company can do so rather freely, but only as long as they make a profit. The company would disappear if it didn't make a profit, natually. Most companies will maximize their profits if they dominate the market. The target is not an even playing field. The target is to be a monopoly. Lots of people who manage big companies are decent people who are only trying to do the best. But it is the structure of the whole thing that is a problem. The combined resources of large numbers of people in the hands of very few people, who are mandated to work towards a very narrow purpose, against heavy competition, but without liability for the cause of their actions, within certain limits. I believe in free market mechanisms. I believe there can be great wisdom found in the combined actions of many individuals choosing those things which they prefer and which they can acquire in the most desirable fashion. Nature is a free market. Evolution is based on a free market. A large corporation tries to pretend that it is one person, but it has some unfair advantages. It's like we were a bunch of school kids who got together for the school's science fair. Except for that one of the kids happens to run NASA and he brought the space shuttle. And he donated a million dollars to the family of each of the judges. And he paid for billboards all over town for the past month. And he had his telemarketing department call every citizen in town and tell them who was gonna have the best science project. Most big things require group efforts to happen. No individual is going to build a bridge or the space shuttle. No individual is going to mass-produce affordable cars. That takes groups of people who create some sort of structure between each other, and who establish a set of contracts between them. The system of the very few managing the very many towards a narrow goal is mainly made for the sake of those very few. At various points in history it has been called slavery, or feudalism, or being loyal to the king or the pope or something. Nowadays it is called corporations and governments. Most corporations and governments produce a lot of propaganda, to make their subjects feel that the very best they can do is to just do their job and be loyal and patriotic and they'll be well taken care of. Same principle as communism, just different rhetoric. I believe in freedom and in the free market and in the power of collaboration and community and democracy. It is just sad that I haven't seen a free market or a democracy, and I'm not aware of any in existence on a large scale. It is certainly not too late. But I think we would get somewhere much faster if the major countries in the world would remove the legal loophole that allows the creation of fictitious legal persons. In my choice of future there would be no corporations. Just groups of people who voluntarily work together for mutual benefit, or for the common good. Of course, that gets us to the more important problem of how to structure how groups of people work together both voluntarily and productively. In our society I suppose we have moved from tribal societies that fairly voluntarily and naturally worked together, to top-down feudal societies predominantly using force and violence to get people to work together, to now using propaganda and economic pressure to get people to do things they otherwise wouldn't do. I certainly hope that the next step is going to be that most people will be free to do that they prefer to do, exhanging their services in a free market, and that projects of any size can be manifested by groups of people who voluntarily come together for the purpose. Oh, all of this is of course a little too black-and-white. And things might evolve in surprising ways. Maybe, rather than just going away, corporations will evolve into self-organizing socially conscious group organisms.

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