Part human, part machine, programmed to profit, devouring the world
Photo by Aditya Vyas on Unsplash
“I’ll believe corporations are people when Texas executes one.” -Economist Robert Reich
In spite of Reich’s disbelief, corporations are people, and a very special kind. They have the rights of people without the responsibilities. Reich’s comment about executing one was a joke, but the reality is that corporations can be fined or sued, but their owners or officers are not sent to jail, and they can’t be executed no matter who their company kills.
Large corporations have far more power than any human. They have arrays of computers to make them instantly aware of everything in the world, fleets of machines to produce and destroy things, armies of employees who carry out their orders, bankloads of cash to buy off their opponents or have them crushed. They are massive, artificially intelligent machines, like the Transformers in the animated movies, powered by the entire energy grid of capitalist society.
We see examples of corporate power every day, as with the leaky oil pipelines built recklessly across indigenous land and waterways against their people’s will and treaty rights. No individual person is doing that; it takes a massive organization that can bend governments and people to its will and take all the time it needs doing it.
What is a corporation?
According to Investopedia, a corporation is a “company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.” Any group of investors or entrepreneurs can start a corporation by filing paperwork in the states or countries of their choice. Different kinds of corporations have slightly different rules, but the basic idea is that the people who start it create a new living thing, which typically has a board of directors and sells shares of its ownership. Corporate profits may be given to shareholders as dividends, but shareholders have no personal liability for damages the corporation may cause. It’s a sweet deal.
So, the corporation becomes an entity with a life of its own. It uses human and mechanical intelligence to get its way. When it needs to speak to people, e.g. in court, in advertising, or in Congress, it has human intelligences to speak for it, while at other times machines do its thinking. People work there and have some influence on daily operations, but they don’t decide things; the company itself is the active agent. Even its executives are only employees, kept on as long as they serve the goals of the company.
In the 1970s, University of Chicago economists declared that corporations had only one purpose, to maximize their owners’ (the shareholders’) profits by raising dividends and stock prices. Everyone else: workers, managers, customers, surrounding community, land and water didn’t count. Executives can be and have been sued for not making enough profit. Although not written in law, maximizing profit and share price became near universal corporate policy.
Under these rules, corporations have become multinational AI monsters devouring our world. They have only one way of evaluating a policy, how it affects their profits. They have been programmed to grow and profit and then turned loose on the world. The costs they inflict on Nature and people are “externalized,” meaning society pays them, not the corporation. All decisions are guided by analysis of corporate financial costs and benefits.
What is the cost of a human life?
In the 1970s, Ford Motor Corporation planned the first American “subcompact” car, small and cheap enough to compete with Japanese imports and the VW Beetle. It was called the Pinto and had a major design problem. According to an investigation by Mark Dowie published in Mother Jones magazine in 1977, when struck from behind, the gas tank tended to burst into flames and burn everyone in the car
Ford engineers knew about the problem before the first Pinto rolled off an assembly line. Repeated crash tests had shown the extreme fire danger. But Ford went ahead with production. They estimated there would be about 150 burn deaths a year, which they costed out at about $200,000 each. They calculated that fixing the gas tank problem would cost them more than paying off families and survivors and chose not to save the lives. Some of the fixes Ford engineers investigated would have cost less than $10 / car, but executives feared that anything that raised prices would hurt their sales.
A corporation, not a person, was making those decisions. Ford Co. could only think in terms of money, because that’s how corporations are programmed. Individual human executives went along with their corporate strategy. I’m guessing that a top executive who hadn’t been brainwashed by corporate thinking might have fixed the tanks and saved the lives, but a person like that wouldn’t have gotten into top leadership in the first place.
Economist Herman Daly wrote, “Modern economic theory has no real place for fairness, malevolence, and benevolence, nor for the preservation of human life or any other moral concern.” That is how super-villains and corporations calculate.
Taking control of governments
Because a country’s laws and regulations can affect profits, corporations constantly seek more influence in government. By now, in the USA, they virtually control most of the relevant pieces. How did that happen?
Here’s how Ford did it. Before 1970, the US government left automakers alone to produce unsafe gas-guzzling cars. In 1965, Ralph Nader’s book Unsafe at any Speed revealed how many Americans (over 40,000 each year) were dying needlessly on roads. In 1970, the Nixon administration established the National Highway Transportation Safety Board (NHTSB) to regulate cars and roads.
Ford and General Motors immediately set out to neutralize the NHTSB by helping write its regulations and placing their own people in charge of enforcement. In the words of Mark Dowie, they sought to “implant the official industry ideology in the minds of the new officials regulating auto safety.” That ideology included the cost-benefit analysis Ford used that valued sales over safety.
We see the same pattern in all government attempts to regulate. Drug companies at the Food and Drug Administration (FDA), agricultural corporations at the Department of Agriculture (USDA), military corporations at the Department of Defense, and investment banks at the Securities and Exchange Commission have not only captured their regulators, but in many cases control the actual departments themselves. Former executives of defense contractors move to high-ranking jobs in the Pentagon, while former generals go to work for Raytheon and Boeing. Government becomes just another department in the corporate structure.
Government agencies increasingly resemble corporations. Look at the Pentagon, the FBI or the CIA. Does it matter who is officially in charge there? Directors come and go, but the policies never change. It’s always more war, assassinations, and a bigger budget.
In recent decades, corporate power has moved beyond agencies to buy the politicians themselves. In 2010, the Supreme Court held in Citizens United vs. Federal Elections Commission that corporations were people and could contribute as much money to politicians as they wanted. Now it is rare to find a State or Federal politician who is not heavily supported by corporations.
Corporate executives are not buying government because they are especially evil people. They are just following the path the machine has programmed into it, to maximize profit and growth however they can. This amorality enabled corporations to carry out most of the slave trade and colonialism. Sri Lankan writer Indi Samarajiva writes in a fascinating piece that his country was not colonized by another country, but by a corporation, the Dutch East India Company (VOC), and you can still see their signs and coins on buildings and train stations all over the island today.
Devouring the natural world
Let me admit for a moment that corporate capitalism has a powerful upside. It creates extraordinary amounts of wealth by pulling together labor, capital and resources from all over the world, creating the abundance you can see on any trip to Costco. But as Herman Daly wrote, all that labor and capital have to work on some real thing. They can’t produce value out of air.
Daly says all capitalism’s products, delightful or horrible as they may be, start out as part of Nature. Corporations get them through mining, drilling, industrial fishing and farming, cutting down forests and rolling up whole ecosystems. They construct buildings on spaces where animals lived, create consumer electronics with materials dug from the Earth, and power their system with oil and coal which pollute water and air and heat the planet.
“Capitalism works by turning nature into products,” wrote ecologist Derrick Jensen. Corporations work ceaselessly, all their superhuman power chewing up the world, making some of it into commercial products and dumping the rest as waste.
When a company wants to build a pipeline across Indian land, they have many ways to do it. They can try to buy the route, or gain access rights by bribery or offering jobs. If that fails, they can go to government agencies and press them to grant permits for the pipeline. They go to court; they commission researchers to write scientific reports showing the pipeline is safe. Finally, they can bring out private, local or national armed forces to clear the water protecting Natives away.
They can win a little at a time. “Enbridge [a pipeline company] leaders know there’s no way for them to win the hearts and minds of all the Native people, but they don’t have to,” said Anton Treuer, professor of Ojibwe language at Bemidji State University in Minnesota. “If they can win over just enough to clear enough hurdles to get the next easement or next little contract or permit approved, they know they’ll be able to get their work done.”
Corporations CAN be executed
Since corporations by their nature cannot stop expanding and seeking profit, and cannot consider their effect on the natural environment, how can we fight them?
When Robert Reich implied that Texas had never executed a corporation, economic writer Tim Worstall of the Adam Smith Institute accused him of “foolishness.” . “Texas executes corporations regularly,” Worstall wrote. “The execution of a company is known as “bankruptcy”. It’s the extinction of corporate life through the actions of the state:, what we would call an execution if done to a human.”
In bankruptcy, many corporations have all their assets liquidated or sold to pay back creditors or settle law suits. Typically, bankruptcy only results when a corporation commits the ultimate sin of losing money, but what if we bankrupted the companies whose daily business plan involves destroying the world?
Corporations have been disbanded before. In 1752, the British government dissolved the slave-trading Royal African Company. Extremely rich companies like energy trader Enron were forcibly liquidated starting in 2001, a process that took years to complete.
Liquidating corporations like Exxon, Lockheed Martin or Citibank would be enormous projects, but in theory, we could transfer their immense resources to areas where they could do good instead of harm. We could pay back the people they have harmed and hire millions of people to restore Nature as indigenous groups like Red Nation tell us to do.
Why this won’t work
Dismantling the corporate AI monsters sounds a good idea, but who would do it? Governments would have to, and the corporations own them. It would probably take a movement of billions of people to make this happen.
And if it did happen, liquidating multinational corporations would create supply chain problems far greater than those we have now. We’d almost be starting the world economy from scratch. Times would be tough. Unemployment would temporarily go sky high.
But I say that would be a good thing. Lots of new jobs would rapidly become available. New, more localized economies would develop. We can support people in transition with a universal basic income. We would consume less, put our energy into healing our planet and each other.
Can you imagine your life without corporations? Shopping at a local store instead of on Amazon, eating locally-grown food, having less material stuff, being at peace with other countries and peoples? I ask everyone to try. Superhuman corporations are destroying our planet. We must do without them.
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