Friday, March 4

The "Business Community"

In my last post, I ventured the following line of thought: if corporations are "persons," as they in fact have been so defined in U.S. federal law for well over a century, can we say also that all persons are corporations?
The simple answer is that, of course, we cannot. Strictly speaking, the corporate structure implies a plurality of shareholders and corporate managers that are, in number greater, and in motivation far narrower, than are most actual persons. Once a person shows genuine interest in anything other than profit-seeking and asset-hoarding, then that person already is more complex, and potentially humane, than any corporation will ever be. The word "genuine" matters here, because, as Joel Bakan demonstrates well in The Corporation (2004), the new fashion among corporations to advertise "corporate responsibility" is necessarily a sham, because, for reasons that are structural and defined by law, it is the duty of corporate managers never to put the narrow, greed-driven interests of their share-holders below any other interest; that is, unless the subordinating of the shareholders' interests is merely provisional and done with a view to enhancing long-term profits by inflating the corporation's perceived respectability among actual human beings (i.e., potential consumers).

So, when you hear news of this or that corporation having set out to improve its "culture," you can be sure that you are being led up the garden path. Strictly speaking, it would be dishonest and, in effect, illegal, for any corporate manager -- CEO or board member -- to place "civic responsibility" or "community interests" above the self-serving greed of the shareholders. Thus, a corporation's attempt to improve its "culture" is likely only a sign that it is determined to better hide its criminal activities in the future. One wonders, then, if the avoidance or masking of criminal activities deserves to be called "culture" in the first place. Similarly, the use of the word "ethics" with respect to corporate governance borders on the obscene. The only way for a corporation to improve its "ethical culture" is to do so cynically, which is to say, with the intent of using this gambit to create or reestablish allegiance among unsuspecting consumers and shareholders. Nor, for that matter, is it ever a question of there being something called a "business community." This phrase is just another product that corporate strategists have hoisted onto the English language to make their pathological quest for profit seem the anodyne and gentle pastime of loving, dedicated, suburb-dwelling, fair-minded entrepreneurs. The corporate managers may well be loving and dedicated in their capacity as family members, church-goers, and golf partners, but when it comes to their corporate doings, they strive, necessarily, to profit from the world's most successful formula for social irresponsibility.

The specific structure of the corporation is one that involves three basic parties. In this structure, the first two enter into a pact whose purpose is, in essence, two-fold: to produce boundless wealth for themselves and to hoist all expenses and negative consequences occasioned by this wealth production upon the third party. This is the
remorseless rationale of "externalities" -- as Milton Friedman explains, [externalities are] the unintended consequences of a transaction between two parties on a third -- [and this rationale is] responsible for countless cases of illness, death, poverty, pollution, exploitation and lies. [source]
The first party -- those who run, but do not own, the corporation -- is essentially bound to the single purpose of enriching the second party, so that the second party may, in turn, enrich it. Moreover, the first party is not legally permitted to follow any course of action that would disrupt the accomplishment of this single purpose. In this circular arrangement lies the self-blinding, amoral, and pathological nature of the corporation.

Unfortunately, the "third party" in this formula includes anyone and anything not contractually belonging to the first two parties. Consider how massive is this third party. It includes, among other things, culture, communities, religions, democracy, justice, patriotism, sanity, humanity, fetuses, avowed heterosexuals, and all plant and animal life -- in short, many of the things that the corporate cheerleaders embrace and presumably hold dear. When confronted with the self-propelled corporate pact between managers and shareholders, all of these things and ideas pale in importance and are thus rendered vulnerable.

In addition to the twin purposes of producing wealth and hoisting expenses and negative consequences upon others, a third purpose of the corporation can be identified, which is seemingly an inevitable consequence of the first two: namely, the reduction of the corporation's accountability towards others. Consider, for instance, that the third party has no truly effective means to oversee the actions of the first two parties other than recourse to government regulation. This is a sign that the corporation has largely succeeded in accomplishing this third purpose. Despite the fact that five-and-half billion dollars were paid out in settlements over various cases of fraud by U.S.-affiliated corporations last year, the recourse to government oversight is becoming more and more ineffective. This situation is not helped by the fact that, in the corporate-run media of the United States, "government" is frequently decried as an obstacle to everything good in life, and corporations, which are qualified as "efficient" and "job-creating," are deemed to be synonymous with "the American way." The public, whose interests depend for their protection on government regulation, are being swayed to think of that very regulation as their nemesis.

The fact that the corporate structure produces socially irresponsible behavior has been confirmed time and again throughout its brief, glorious, destructive history. As Steve Bates recalled, there was suspicion about the corporation from its first appearance in America. The suspicion was also present in England, where, in the seventeenth century, the corporation first made a brief, though now characteristic appearance -- one that erupted in scandal after scandal, and racket after racket, and led to its being completely outlawed. Nonetheless, despite the fact that corporations have been stepping all over the United States government and diminishing its regulatory powers relentlessly for well over a century but with increasing success in the last forty years, corporations remain, in principle, beholden to a state charter. That is, their very existence depends on this charter. So, although, as a "person," the corporation does not in fact experience a biological death and in many cases pays no federal taxes, its charter can be revoked on very short order by the charter-issuing state. Hundreds of corporations are in fact disbanded every year by this means. But almost always the corporations that are so treated are paltry in size and importance and have simply been reprimanded in this way for not correctly filing their papers with a state government. The powerful corporations such as Dupont and Halliburton have managed to turn this power of charter revocation into what is, practically speaking, a quaint anachronism of U.S. law. Still, the earliest corporations actually did have the public interest in mind. They were conceived to last only as long as the specific construction project which they were designed to accomplish. However, the history of the corporation, as Bakan tells it, reveals that, for structural reasons, the institution quickly grew out of control and turned criminal. (For this history, I encourage readers to consult Bakan's work, which I am only paraphrasing from memory, since my copy of his book was recalled by the library I frequent.)

At the current point of this short but spectacular history, I note that a conveniently self-flattering replacement for the very word "corporation" has appeared. I am thinking, again, of the phrase, "business community," which I heard evoked most recently on National "Public" Radio. What I find particularly unpersuasive about this "warm" expression is the fact that the structure of the corporation disallows the possibility of any corporation working simply for the good of the "community," where this means anything other than the greed-driven shareholders who own a given corporation. If any apparently responsible action is taken on the part of the corporation to benefit others or prevent them from being harmed, it must be done under the logic of ultimate profit-gain for the shareholders. No other logic is permissible within the confines of the institution. There are many stories of well-intentioned corporate owners who find that, no matter how virtuous their first intentions, their company, once entered onto the market and given over to the obsessive focus of shareholder gain, is stripped of the possibility of true civic responsibility. As with all corporations, it becomes relentlessly amoral and short-sighted. (To exemplify this, Bakan focuses on, among others, the original owner of The Body Shop and her eventual decision to sell her company to the highest bidder, simply to preserve her own dignity.)

The only thing the "business community" ever has to tell us is that it wants our money and allegiance. Everything else is a patent lie designed to get our money and establish our thoughtless allegiance through surreptitious means. The things the "business community" is willing to do to achieve its goal of money-grubbing and allegiance-building are discussed at length by Bakan. They include well-documented things like ruining our health, degrading the quality of our family life, turning our children into nagging idiots, poisoning the air and soil that sustain us, sending our sons and daughters to fight unjust wars, building quixotic and unfathomably expensive weapons and "defense" systems, etc. If this is what it means to be a "business community," then one wonders just where this idea of "community" may lead. This is especially worth considering, given that the "community" that we are to believe corporations participate in is in fact radically anti-community and anti-democratic. Such a "community" consists of a narrow band of greed-mongers whose only respect for "community" is for their own corporate investments. Each member of the self-described "business community" is, in that capacity, amoral to the point of being immoral, and each seeks the destruction of the other, rival corporations. And that is true no matter how pleasant and lovable the individual persons who make up the "corporate person" are, or how "Christian" they claim to be. (I often wonder if being "Christian" is not precisely the most convenient of ways for many Americans to mask the rationale of a life given over to greed. And one should never forget, in this respect, that greed is explicitly condemned by Saint Paul and criticized in numerous passages in the Bible.)

Incidentally, one must always distinguish between the corporate structure and the general idea of business. Since not all businesses are corporations, a robust critique of the corporate institution is not necessarily anti-business. It is not anti-capitalist, either. Nor, for that matter, is it communist. And, in light of the currently impoverished, fear-throttled state of civic discourse in the U.S., one must also emphasize that it certainly is not terrorist.

As for the idea that "every person is a for-profit corporation," which is only an implication of Bakan's critique of corporate power, rather than a specific claim he has made, I still believe that it explains the essence of the paternalistic corporate capitalists who are running our government from the far right today. Consider examples from any domain of policy; for instance, social security -- the hot topic of late, and the latest in a line of fears manufactured by the Bush Administration. You might have taken for granted years ago the idea that an eighty-year-old retiree would be spared the corporatist logic of "produce wealth, beat your competitors, or perish." I certainly did. Then Bush and his corporate war-mongers showed up in Washington with threats of economic collapse and, as with everything else, proposed a "market remedy": the idea that such a woman give up a healthy share of her pension to Wall Street and see if, in gambling the little she has, she might spice up her dying days, and perhaps rest in peace with the knowledge that she had cashed in on her final investments.

The example is just one of many. What seems certain is that the massive corporatization of education, of transporation, of health care -- the list may know no bounds -- seeks to turn every one of us into self-managed corporations; if not in fact, at least in spirit.

Whether or not this analogy seems convincing, in the end, if we all adopt corporate think as Bush Inc. would like us to do, and if our actually investing in corporations pushes us further in this direction, we risk becoming incapable of criticizing the increasing corporatization of human life -- including that of our own.

Postscript: If any reader feels that I am blowing things out of proportion, consider that, on the very morning after I first published this post, NPR featured an interview with Marc Gunther, the author of Faith and Fortune: The Quiet Revolution to Reform American Business, who argues that "companies are becoming more responsible." What caught my attention about the interview was the following exchange:

NRP reporter Steve Inskeep: What is motivating companies to do that [i.e., to acknowledge global warming as a serious, man-made problem and act out of an apparent concern for the environment]?

Marc Gunther: Purely bottom-line considerations... this is not about altruism.
There you have it, from the horse's mouth. The very author who makes a big case out of a supposed "increased social responsibility" among corporations admits that, while there may be limited benefits here and there to the presumed change of heart (precisely where there is no heart to speak of, just the advertisement of one), such benefits can only be hoped for within the narrow logic of profit-seeking.