"Corporations are not inherently evil."

Wrong.

I believe all publicly held corporations are not only evil, but are mandated by law to be so.

Let's start with the notion of the "corporate person."

Nobel economist Milton Friedman once said that all publicly held corporations have only one duty, namely, to maximize the profits of their shareholders. Any activity on the part of the corporate officers that detracts from profit-making is immoral.

Corporations exist under a different standard of morality than the rest of us do. Their only moral imperative is to maximize profits.

Corporations are required to look out only for their own narrow self-interest.

This fact has several consequences, pretty much subsumeable under the observation that corporate "persons" are mandated to operate in ways that, in human persons, would justify the label of "psychopathic."

Take for example an auto manufacturer who has inadvertently produced a car with a defect that can cause a small percentage of them to blow up and kill their occupants. The fix for the flaw costs $2,000 per car for a million cars in this hypothetical example. That would be a total of 2 billion for the fix. What is the morally correct thing for the comany to do? You might imagine that they should do a recall and fix the defects. Well, not necessarily. The moral thing to do is to conduct a cost/benefit analysis (C/BA) and only fix the defect if that is the best financial solution for the company.

Suppose the C/BA predicts 1,000 accidents, and that half of these accidents will result in successful lawsuits, each settling for an average of $1 million. That would be a total projected cost of $500 million for not fixing the deficit. The proper decision in this case is not to fix the defect.

The company would also be morally called upon to try to create an environment more friendly to its deathtrap cars. This would include lobbying to eliminate class-action lawsuits, thereby making it harder for individual litigants to gang up on them, and pressing for "tort reform," seeking to impose caps on the maximum anyone could receive in judgments against them. If they could get a wrongful death cap of $250,000 passed, that would surely produce better numbers than if people could sue them for $1 million or more for each accident.

Often corporations will do a bit of "greenwashing" or make a show of cleaning themselves up a little in the interest of public relations, but only if doing so will pay off financially for them.

So--Are corporations not "inherently evil?"

The only allegiance managers and directors have is to the P&L Statement. They don't even mind stabbing each other in the back if they deem it a strategic necessity. The end always justifies the means as far as they are concerned.

,...inherently IMMORAL e.g. E-V-I-L.

Correct?

nonsensical when dealing with such entities.

I get disgusted by the excuses for vile human behavior,...defined as something OTHER THAN vile human behavior.

The members may be immoral. But a corporation cannot be immoral (or moral).

From dictionary.com

amoral = not involving questions of right or wrong; without moral quality; neither moral nor immoral.

immoral = violating moral principles; not conforming to the patterns of conduct usually accepted or established as consistent with principles of personal and social ethics.

A corporation isn't capable of acting immorally, it's members are. Yes, the members do it in the name of the corporation, but a corporation is simply an artificial entity that the members hide behind.

"amoral" is not the same as "immoral" - that's why they are two different words. A corporation is not a moral agent, hence "amoral." While we're at it, please note that "immoral" is not synonymous with "evil."

I would say an entity that's sole purpose is wealth accumulation, without regard to human consequences, in a human society, is inherently immoral.

The Zinn quote, "You can't be neutral on a moving train" and archbishop desmond tutu's quote, "if you are neutral in situations of injustice, you have chosen the side of the oppressor." come to mind.

Chomsky points out in The Corporation, that corporation are legally required to maximize profits. He says the legal precedence was set in the case of The Dodge Brothers vs Ford:

Henry Ford made better cars and paid his workers better then he had to, supposedly. The Dodge brothers, who were share holders, took him to court for failing to maximize profits, and they won.

Edit: This is probably why most of the shit we buy over here is cheap and shitty and practically disposable..

although even they can go bad.

The little family shops are as good or as bad as their individual owners. Many are wonderful organizations.

which means that . . . . . . .

I just had a thought. Methinks I have another diary coming up - with some economic rules for tomorrowland.

...to avoid personal responsibility for their actions.

As long as they abandon the legal fiction of being "persons."

,...the rest of us, "persons",...but, instead, they are provided escape hatches for every incorrigible or corrupt or evil act they commit.

They're just businesses. It's just money. The evil comes from greedy people within the corporations who sell out principles and people for profit, and greedy politicians who allow corporations to have undue power and influence over our Government.

Corporations are the logical end game of capitalism, it's highest refinement. The purpose of capitalism is to increase capital. There are no caveats, no exceptions, no room for morality, environmental considerations. Being amoral, immorality is of no consequence to capitalism, only the bottom line is of consequence. Thus corporatism is highly refined inherent evil.

The people involved in the corporate game may be dicks or they might be relatively decent, if oblivious, in either case they are fulfilling the role which capital makes available. It ain't so much the people as it is the system.

It's people who are greedy, corrupt and evil. It's silly to say corporations are "evil"--especially considering that many of us in this country earn a paycheck from them. If I work for a corporation, am I evil too?

All Corporations are GREEDY, self centered, looking for a way to screw you type or don't you see that?

they are mandated to behave in a way that, were an individual to do it, would be illegal.

We have created a new type of "persons," granted them immortality, and hardwired them to be psychopaths. (I use the term "psychopath" in the modern psychological sense. It's very similar in meaning to your use of "sociopath," which is considered a colloquial term in current usage.)

By legal precedent, a publicly held corporation's sole responsibility is to maximize return on investment for its shareholders. That's it. If it discharges that obligation to the shareholders' satisfaction, it can do just about anything else imaginable -- no matter how disgusting, criminal or pathological.

If they get busted, they just wave the white flag and cry Chapter 11, "reorganize," and resume operations the following week in the same facilities, making and selling the same crap using the same equipment and employing the same labor force -- except they're not likely to be unionized anymore since Chapter 11 voids all existing labor-management contracts.

Asking a for-profit, publicly held corporation to behave with a civic conscience is like asking a shark to go vegan out of concern for the rights of its prey.


wp

the only purpose of corporations is to maximize profits for the shareholders. That in itself isn't a bad thing. What is a bad thing is a Congress that won't regulate the behavior of Corporations such that they don't do bad things to the consumer.

Corporations will do what ever is legal (and sometimes cross that line as do individual humans) to make a profit. It is the job of society. through the Government, to act as a conscience through legislation and regulation.

After the 1929 crash a number of regulations were placed on banks that worked well for 70 years. In 1999 the banking industry was de-regulated and we all know how that turned out.

No, corporations are not evil, what they do with the aid of de-regulation is.

The author of the article below (long unavailable on the web, so your indulgence is appreciated, mods) maintains that all of that can be easily solved by the addition of 26 words to corporate charters:

Common Dreams NewsCenter
Published in the January/February 2002 issue of Business Ethics: Corporate Social Responsibility Report

How Corporate Law Inhibits Social Responsibility
A Corporate Attorney Proposes a 'Code for Corporate Citizenship' in State Law
by Robert Hinkley

After 23 years as a corporate securities attorney - advising large corporations on securities offerings and mergers and acquisitions - I left my position as partner at Skadden, Arps, Slate, Meagher & Flom because I was disturbed by the game. I realized that the many social ills created by corporations stem directly from corporate law. It dawned on me that the law, in its current form, actually inhibits executives and corporations from being socially responsible. So in June 2000 I quit my job and decided to devote the next phase of my life to making people aware of this problem. My goal is to build consensus to change the law so it encourages good corporate citizenship, rather than inhibiting it.

The provision in the law I am talking about is the one that says the purpose of the corporation is simply to make money for shareholders. Every jurisdiction where corporations operate has its own law of corporate governance. But remarkably, the corporate design contained in hundreds of corporate laws throughout the world is nearly identical. That design creates a governing body to manage the corporation - usually a board of directors - and dictates the duties of those directors. In short, the law creates corporate purpose. That purpose is to operate in the interests of shareholders. In Maine, where I live, this duty of directors is in Section 716 of the business corporation act, which reads:

...the directors and officers of a corporation shall exercise their powers and discharge their duties with a view to the interests of the corporation and of the shareholders....

Although the wording of this provision differs from jurisdiction to jurisdiction, its legal effect does not. This provision is the motive behind all corporate actions everywhere in the world. Distilled to its essence, it says that the people who run corporations have a legal duty to shareholders, and that duty is to make money. Failing this duty can leave directors and officers open to being sued by shareholders.

Section 716 dedicates the corporation to the pursuit of its own self-interest (and equates corporate self-interest with shareholder self-interest). No mention is made of responsibility to the public interest. Section 716 and its counterparts explain two things. First, they explain why corporations find social issues like human rights irrelevant - because they fall outside the corporation's legal mandate. Second, these provisions explain why executives behave differently than they might as individual citizens, because the law says their only obligation in business is to make money.

This design has the unfortunate side effect of largely eliminating personal responsibility. Because corporate law generally regulates corporations but not executives, it leads executives to become inattentive to justice. They demand their subordinates "make the numbers," and pay little attention to how they do so. Directors and officers know their jobs, salaries, bonuses, and stock options depend on delivering profits for shareholders.

Companies believe their duty to the public interest consists of complying with the law. Obeying the law is simply a cost. Since it interferes with making money, it must be minimized - using devices like lobbying, legal hairsplitting, and jurisdiction shopping. Directors and officers give little thought to the fact that these activities may damage the public interest.

Lower-level employees know their livelihoods depend upon satisfying superiors' demands to make money. They have no incentive to offer ideas that would advance the public interest unless they increase profits. Projects that would serve the public interest - but at a financial cost to the corporation - are considered naive.

Corporate law thus casts ethical and social concerns as irrelevant, or as stumbling blocks to the corporation's fundamental mandate. That's the effect the law has inside the corporation. Outside the corporation the effect is more devastating. It is the law that leads corporations to actively disregard harm to all interests other than those of shareholders. When toxic chemicals are spilled, forests destroyed, employees left in poverty, or communities devastated through plant shutdowns, corporations view these as unimportant side effects outside their area of concern. But when the company's stock price dips, that's a disaster. The reason is that, in our legal framework, a low stock price leaves a company vulnerable to takeover or means the CEO's job could be at risk.

In the end, the natural result is that corporate bottom line goes up, and the state of the public good goes down. This is called privatizing the gain and externalizing the cost.

This system design helps explain why the war against corporate abuse is being lost, despite decades of effort by thousands of organizations. Until now, tactics used to confront corporations have focused on where and how much companies should be allowed to damage the public interest, rather than eliminating the reason they do it. When public interest groups protest a new power plant, mercury poisoning, or a new big box store, the groups don't examine the corporations' motives. They only seek to limit where damage is created (not in our back yard) and how much damage is created (a little less, please).

But the where-and-how-much approach is reactive, not proactive. Even when corporations are defeated in particular battles, they go on the next day, in other ways and other places, to pursue their own private interests at the expense of the public.

I believe the battle against corporate abuse should be conducted in a more holistic way. We must inquire why corporations behave as they do, and look for a way to change these underlying motives. Once we have arrived at a viable systemic solution, we should then dictate the terms of engagement to corporations, not let them dictate terms to us.

We must remember that corporations were invented to serve mankind. Mankind was not invented to serve corporations. Corporations in many ways have the rights of citizens, and those rights should be balanced by obligations to the public.

Many activists cast the fundamental issue as one of "corporate greed," but that's off the mark. Corporations are incapable of a human emotion like greed. They are artificial beings created by law. The real question is why corporations behave as if they are greedy. The answer is the design of corporate law.

We can change that design. We can make corporations more responsible to the public good by amending the law that says the pursuit of profit takes precedence over the public interest. I believe this can best be achieved by changing corporate law to make directors personally responsible for harms done.

Let me give you a sense of how director responsibility works in the current system. Under federal securities laws, directors are held personally liable for false and misleading statements made in prospectuses used to sell securities. If a corporate prospectus contains a material falsehood and investors suffer damage as a result, investors can sue each director personally to recover the damage. Believe me, this provision grabs the attention of company directors. They spend hours reviewing drafts of a prospectus to ensure it complies with the law. Similarly, everyone who works on the prospectus knows that directors' personal wealth is at stake, so they too take great care with accuracy.

That's an example of how corporate behavior changes when directors are held personally responsible. Everyone in the corporation improves their game to meet the challenge. The law has what we call an in terrorem effect. Since the potential penalties are so severe, directors err on the side of caution. While this has not eliminated securities fraud, it has over the years reduced it to an infinitesimal percentage of the total capital raised.

I propose that corporate law be changed in a similar manner--to make individuals responsible for seeing that the pursuit of profit does not damage the public interest.

To pave the way for such a change, we must challenge the myth that making profits and protecting the public interest are mutually exclusive goals. The same was once said about profits and product quality, before Japanese manufacturers taught us otherwise. If we force companies to respect the public interest while they make money, business people will figure out how to do both.

The specific change I suggest is simple: add 26 words to corporate law and thus create what I call the "Code for Corporate Citizenship." In Maine, this would mean amending section 716 to add the following clause. Directors and officers would still have a duty to make money for shareholders,

... but not at the expense of the environment, human rights, the public safety, the communities in which the corporation operates or the dignity of its employees.

This simple amendment would effect a dramatic change in the underlying mechanism that drives corporate malfeasance. It would make individuals responsible for the damage companies cause to the public interest, and would be enforced much the same way as securities laws are now. Negligent failure to abide by the code would result in the corporation, its directors, and its officers being liable for the full amount of the damage they cause. In addition to civil liability, the attorney general would have the right to criminally prosecute intentional acts. Injunctive relief - which stops specific behaviors while the legal process proceeds - would also be available.

Compliance would be in the self-interest of both individuals and the company. No one wants to see personal assets subject to a lawsuit. Such a prospect would surely temper corporate managers' willingness to make money at the expense of the public interest. Similarly, investors tend to shy away from companies with contingent liabilities, so companies that severely or repeatedly violate the Code for Corporate Citizenship might see their stock price fall or their access to capital dry up.

Many would say such a code could never be enacted. But they're mistaken. I take heart from a 2000 Business Week/Harris Poll that asked Americans which of the following two propositions they support more strongly:

• Corporations should have only one purpose-to make the most profit for their shareholders--and pursuit of that goal will be best for America in the long run.

--or--

• Corporations should have more than one purpose. They also owe something to their workers and the communities in which they operate, and they should sometimes sacrifice some profit for the sake of making things better for their workers and communities.

An overwhelming 95 percent of Americans chose the second proposition. Clearly, this finding tells us that our fate is not sealed. When 95 percent of the public supports a proposition, enacting that proposition into law should not be impossible.

If business people resist the notion of legal change, we can remind them that corporations exist only because laws allow them to exist. Without these laws, owners would be fully responsible for debts incurred and damages caused by their businesses. Because the public creates the law, corporations owe their existence as much to the public as they do to shareholders. They should have obligations to both. It simply makes no sense that society's most powerful citizens have no concern for the public good.

It also makes no sense to endlessly chase after individual instances of corporate wrongdoing, when that wrongdoing is a natural result of the system design. Corporations abuse the public interest because the law tells them their only legal duty is to maximize profits for shareholders. Until we change the law of corporate governance, the problem of corporate abuse can never fully be solved.

Robert Hinkley (rchinkley@media2.hypernet.com) lives in Brooklin, Maine.

http://www.commondreams.org/views02/0119-04.htm

NGU.

There was a time in our history when corporations were a tool for people to use, not the other way around.

Reclaim Democracy is one of the best sites regarding corporate personhood.

http://reclaimdemocracy.org/corporate_accountability/history_corporations_us.html

History of Corporations

snip...

When American colonists declared independence from England in 1776, they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After fighting a revolution to end this exploitation, our country's founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society.

Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end.

The states also imposed conditions (some of which remain on the books, though unused) like these:

* Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.

* Corporations could engage only in activities necessary to fulfill their chartered purpose.

* Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.

* Corporations were often terminated if they exceeded their authority or caused public harm.

* Owners and managers were responsible for criminal acts committed on the job.

* Corporations could not make any political or charitable contributions nor spend money to influence law-making.

For 100 years after the American Revolution, legislators maintained tight controll of the corporate chartering process. Because of widespread public opposition, early legislators granted very few corporate charters, and only after debate. Citizens governed corporations by detailing operating conditions not just in charters but also in state constitutions and state laws. Incorporated businesses were prohibited from taking any action that legislators did not specifically allow.

I think it should be obvious that one prominent economist's opinion is not the last word.

Most corporations have missions (i.e. to provide the best service, product, etc.) and brands to protect. Not to mention the various stakeholders (managers, shareholders, government, community, etc.) that must be taken into account if they want to operate successfully.

A corporation in pursuit of pure profit to the exclusion of the above is a recipe for disaster (or at least would not last very long).

A corporation, as an entity, has no other objective or purpose than to sate the "love of money."

Without people, corporations would cease to do anything. So, it is not the corporation that is "evil," it is the person or people who designed it and/or who operate it.

Corporate personhood came long after the creation of the corporation and isn't necessary for corporations to exist (and I'd love to see it ended immediately as it is written today), and it doesn't give a corporation life and independent will - they still have to be run by people.

of corporate personhood. If corporations can be persons, they can be evil.

Corporate personhood is a collection of citizens' rights given to corporations in/for legal issues tried in court. It doesn't give a corporation any morality, it simply changes its function as a tool. It is still reliant on people to operate, and those people are who determine how the tool is used, not the tool itself.

are you having trouble with?

person, then at some point it must do two things: DIE and PAY TAXES!

I hate corporations of today.

that are good corps? Maybe small family and friends owned that are into taking care of the environment instead of thrashing it?

I was writing explicitly about publicly held corporations. Hell, I have a little LLC of my own, which I run according to my own interests and ethical standards, rather than with an eye to maximizing profits.

I see what's you're sayin'.

Chomsky talks about it in The Corporation if I recall correctly.

Henry Ford made better cars and paid his workers better then he had to, supposedly. The Dodge brothers, who were share holders, took him to court for failing to maximize profits, and they won.

You have it exactly right. The corporation is a legal entity which cannot operate in any mode other than to maximize the its value for its shareholders. It is not intentionally evil, just evil because it has no 'moral sense of right or wrong' which is the equivalent of 'amoral.'

Public relations for a corporation tend to cast it in terms of a 'good citizen' who acts in the 'best interests of the community in which it exists.' But that is a false presentation. THe only reason a corporation acts to collect and donate money for charities is that it raises the 'good will' of the corporation in the community --which by the way, 'good will' can have a specific financial value for purposes of taxation according to the IRS.

And that is one of the primary reasons we do not allow corporations to make direct campaign contributions to political candidates.

"Defense" contractors, for example. Tobacco companies for another. These industries exist for no other reason than to sell products that kill people. You can add pharmaceutical companies to that list, because they willingly put deadly chemicals on the market, and advertise them as "safe".

Oil companies are inherently evil. This is proven by the fact that they are currently stealing this country blind, and lying about the reasons for the price increases.

that will help them get along in life. If we look on them as little school children needing supervision then we can understand. They become evil when they are unsupervised and don't learn to get along with their fellow classmates in the rest of the community. If they are unsupervised they become juvenile delinquents and could eventually end up in prison.

Whatever...excuse my ramblings...that this came into my mind...:eyes:

You need to keep them under close supervision in order to prevent them from acting on their antisocial impulses. They don't learn self-control; that's not wired into their systems. The most we can hope for is to keep a close eye on them and eliminate opportunities for them to commit further crimes.

Basing an entire system off of the accumulation of wealth. Small business can be just as shi**y. In fact, they often are. They just don't control the means of production.

Remember most of the robber barons in the 1800s didn't operate under a corporate identity.

I thought people like this only existed in perjorative right-wing caricatures of left-wingers.

I'm sorry to see that you're real.

Such a scenario could only be played out in secrecy, since exposure would likely force the company out of business. Also, revealing knowledge of such defect would likely increase the liability.

Corporations need more regulation and "sunshine" in their business practices, but they are not necessarily evil in nature.

Saw that on a PBS special years ago. Basically in the 60s/70s, this company was making PCP piping. One of the side effects was that basically it would slowly dissolve your bones working with this stuff. They showed an old man who had no bones at the ends of his fingers.

The other thing it could cause was sterility. They showed an internal memo from the higher ups. Their own internal scientists had found that workers were being exposed to chemicals that would cause sterility.. the actual memo... which they showed said quote "They can always adopt...".

Eventually the men who were all the age to try and start having families compared notes and found out what was happening.. I believed they sued but didn't get much of anything out of it.

As far as the original post, spot on.

Some are good, some are bad, and some are so-so.