Moving from an understanding of organizations and institutions as nothing but mental constructs has led to the exploration of the nature of the various forms they have taken, particularly the for-profit corporations. They have become so ubiquitous, so much a part of us from the moment of birth, that we accept them with as little thought as the air we breath and the water we drink. Corporations are not natural phenomena. They are creations of man. Understanding them as they were, as they are, as they might become, and as they ought to be, is an interesting journey.
The dry husks one finds in the dusty closets of dictionary and encyclopedia do not reveal a great deal. Black's Law Dictionary tells us that a corporation is “an artificial person or legal entity created by or under the authority of the laws of a state or nation . . . ordinarily consisting of an association of numerous individuals. Such entity . . . is regarded in law as having a personality and existence distinct from that of its several members . . . vested with the capacity of continuous succession irrespective of changes in its membership, either in perpetuity or for a limited term of years” etc. Mr. Black was obviously struggling, along with the rest of us, to make something understandable out of the mental abstraction called “corporation.”
Corporations as they were bear little resemblance to corporations as they now are. The original concept of corporation was a collective entity intended to attract people and resources needed to realize a desired social objective beyond the ability or resources of a single individual. It was created through the power of government and authorized to exist as a pseudo-individual with limited, carefully prescribed rights and obligations. It was to be chartered for a limited time, to realize a limited public purpose, in a limited area. It was to be open to rigorous social and governmental surveillance. Its “natural” death in time was specified in the charter. Actions in excess of, or inadequate to the purpose, would be punished by revocation of the charter.
The proliferation of the corporate concept of organization as a pseudo-person was given great impetus in the sixteenth and seventeenth centuries by the huge, imperialist expansion of western nation-states through subjugation of people on other continents. The increase in geographic scale, the attendant risk, and the capital that imperialist expansion required fueled individual desire for limited personal liability, limited responsibility for risk, and unlimited opportunity for gain.
The corporate form of organization became a useful instrument for government plunder. It is not to be wondered that it soon became an instrument for private plunder as well. Pursuit of limitations on personal liability and unrestrained opportunity for personal gain became a conflagration burning ever hotter from the seventeenth century to the present day.
In the United States, the first general corporation-for-profit statute was enacted by New York State in 1811, with other states gradually following its lead. The corporation as a business mechanism came into prominence during and after the Civil War, again as an instrument of government for achieving its purpose in a time of great civil strife and expense. The statutes governing corporations have been liberalized, broadened, and made more detailed in their provisions ever since, gradually moving away from the interests of government and society to the interests of monetary shareholders and management.
In the beginning, no one dreamed that a small aggregation of wealth and power legalized in the form of a pseudo-person to achieve a social purpose would persistently grind away social and legislative mandates that controlled corporate purpose, restricted its territory, confined its growth, and curbed its behavior. But that is what happened. The for-profit, monetized, shareholder form of corporation has demanded and received perpetual life. It has demanded and received the right to define its own purpose and act solely for self-defined self-interest. It has demanded and received release from the revocation of its charter for inept or antisocial acts. It has demanded and received revocation of limitations on its size. It has demanded and received unlimited geographic reach. It has demanded and received rights to plunder the earth of resources and use the biosphere for repository of its poisons and waste. It has demanded and received virtually unlimited relief from criminal and civil penalties for the acts of its directors, managers, and shareholders. It has demanded and received unlimited power to propagandize. It has demanded and received immense power to influence and control election of public officials and legislation.
The roles of giant, transnational corporations and government have slowly reversed. Government is now more an instrument of such corporations, than the corporations are instruments of government. They are no longer, not even indirectly, an instrument of the populace they affect. In effect, they are free from civic duty.
They have become an instrument of the few who control the ever increasing power and wealth they command. The purpose of wealth is to acquire power. The purpose of power is to protect wealth. The purpose of wealth and power combined is to acquire more wealth and power. The use of commercial corporate form for that purpose has become paramount. Social good has become incidental.
The monetized, commercial form of corporation has steadily become an instrument of few with surplus money (capital) and those with surplus power (management) to reward themselves at the expense of the community, the biosphere, and the many without surplus wealth or power, commonly called “consumers” and “human resources." (Demeaning but revealing phrases.) Thus, “human resources” are used, worn out, and discarded with little more consideration on the part of monetary stockholders and management than they might give to a load of ore or a pile of lumber. Consumers are molded, manipulated, and exploited with the same lack of concern.
Nor is corporate power restricted to power over employees and consumers. Global corporations now have implicit sovereignty over people throughout the world, since they are beyond the reach of any single nation-state. They hold government and its instrumentalities to ransom for use of land, for reprieve from taxation, for access to natural resources far below cost, for direct monetary subsidization, and for use of land, air, and water as a repository for refuse. They do so by the simple expedient of bargaining one government against another for the claimed economic benefit of their presence. Under the guise of free markets, they are now able to move their money, their operations, their products and their management at will worldwide. No government, community, or individual can do so.
Not only are they creating a global market for government in which they are the sole buyers, they have become a superb instrument for the capitalization of profit and socialization of cost. When a corporation rips from the earth irreplaceable energy or resources, no matter how much it pays for them, or when it uses any resources more rapidly than they can be replaced, or at less than full replacement cost, it has socialized the cost (spread it to society as a whole/the people at large) and capitalized the resultant profit (limited to management and shareholders).
When a corporation “downsizes” workers, abandons a community, or pays less than a living wage; when it creates and dumps waste in the process of manufacturing or marketing a product, or at the end of its useful life; when it receives a subsidy, guarantee, or relief from taxation by government; it has socialized cost and capitalized profit. When a corporation uses highways, railroads, airlines, postal departments or other public infrastructure at less than their full cost; when it uses the military, the CIA, or any other government instrumentality to protect its interests; when it diminishes topsoil, depletes the water table, or pollutes and poisons any biological system on which life depends; it has socialized loss and capitalized profit. When a corporation engages in unsound lending or currency speculation and looks to government to bail it out, it has socialized cost and capitalized profit. The possibilities for socializing cost and capitalizing profit are endless, as those who hold power or wealth within monetized corporations have discovered to their endless benefit.
This effect of this vast corporate socialization of cost and capitalization of profit is no longer limited to the current generation. Liability for the socialized loss is transferred to the lives of the young and to generations yet unborn through countless government guarantees and instruments of long-term debt. Interest is added to such debt and, when collected, paid to the same people who hold most shares in corporations, for it is their surplus wealth that is borrowed by government to fund the debt that future generations must pay.
Round and round goes the merry-go-round-- as fewer and fewer people get richer and richer and more powerful, more and more people fall into poverty and despair, and generations unborn are placed deeper in bondage to voracious appetites of the few for ever more power and wealth. The fascinating thing about the whole of it is that there are no evil people who wish it so, or who have conspired to make it happen. All are victimized by a false metaphor, a wrong concept of organization, an internal model of reality which is no longer relevant, and a consciousness of reality neither whole nor wholesome.
The rationalizations they use and we too often believe ring hollow. “That some have, is evidence that all may get.” “Power and wealth result from superior intelligence, effort, and ability.” “Poverty results from lack of determination and character.” “That some rise to the top is proof that all others could if they had sufficient intelligence, and will.” “Unlimited pursuit of self interest (the “invisible hand”) will result in the greatest good for all.” “A rising tide lifts all boats.”
When we trumpet the glories of monetary capitalism and praise the fiction of free markets while decrying the evils of socialism we are engaging in cant and hypocrisy. Clearly, we make love to socialism in the balance-sheet bedroom called cost, and make love to capitalism in the bedroom called profit. It is tearing the physical world apart and most people as well.
If the purpose of each corporation is not primarily the health and well being of the earth and all life thereon, if its principles are not based on equitable distribution of power and wealth, if it avoids responsibility for the sustenance of family, community and place, if it has no belief system, or one devoid of ethical and moral content, it is difficult to see why it should have the sanction and protection of society through the arm of government.
We know how monetized corporations were. We know how they are. We know what they are becoming, and it is not a happy prospect for the earth and the vast majority of people on it. It is far past time to examine how such corporations ought to be and find ways in which they can evolve into a more constructive order of things. There can be no doubt that the people at the head of such corporations should be foremost in such transformation. If they profess to be leaders, they should "go before and show the way."