Archive | November, 2011

Corporate Greed is an Oxymoron

22 Nov

Lets get one thing straight; a corporation is incapable of greed. Greed is a human emotion. Corporations are not human.

A corporation can no more be greedy than a cup can be sympathetic or a political voting system feel angst about the possibility of being usurped (see MMP).

That does not at all mean that there isn’t a problem though. It just means if you are looking for somewhere to lay the blame for the effects of what is generally termed “Corporate Greed” you need to dig a little deeper.

A corporation is a tool designed for a purpose. A hammer is designed to hit nails into wood, a car is designed to transport people, and a corporation is designed to make a profit. Just like a hammer or a car a corporation needs people to operate it.

However there are two curious ways in which a corporation (or more accurately a “limited company”) differs from any other tool known to man:

  1. there is not inherent limit to its purpose; and
  2. unlike any other tool, a corporation has the rights of human beings under the law. It is a legal person.

When I say that there is no inherent limit to its purpose, what I mean is that every tool is designed to achieve a particular, finite goal. Once a hammer has driven home every nail required in a building, and the construction is complete, the hammer goes back in the builders tool belt until it is required to hammer nails into a different building. It does not continue to hit nails into every hard surface of the building, ad infinitum, until it renders the building completely useless for its purpose. A car is designed to transport people to a particular destination. It does not continue to drive, aimlessly, constantly increasing speed, infinitely – or until its tank is empty.

But a company isn’t like that. It is designed to make as much money as it can (over and above its production and running costs) for as long as it can. They call this making a profit.

The term “a profit” sounds benign. It sounds like it is just this one small thing, like a lamp or a knife, when it is in fact something far more difficult to define by reference to limits. It only comes into existence once all the costs of running the business can be paid (wages, rent, materials, utilities etc.) but can differ in size from a fraction of a cent, to an infinitely large sum of money. It isn’t “a thing” at all, but a potentially “infinite number of things”. It is not a dollar but a fluctuating number of dollars, from moment to moment. It may even not exist at all, but that is alright so long as the company is working to achieve it, howsoever large or small it may be. (Curiously there are even companies that are designed to accumulate losses, which begs an even wider range of mind bending questions).

It is difficult to imagine endowing an inanimate object like a hammer or a car with human attributes, but this is what we have done with limited companies to aid it in its pursuit of profit. A company can own property, run businesses, pay people, incur debt, hold money on trust for the benefit of others, write to people, influence politics, enter partnerships and do all manner of things under the law that a normal human being can do. It can even die without having drawn a single breath.

Fine. Seems harmless enough. If a human being can do all those things, why shouldn’t a legal person be able to do the same things. Presumably it’s still restrained by the same laws as a human being, right?

Well, yes – but no. This is where the seemingly subtle differences between a human being and a company come into play. While a company as a legal person, can live and die without ever drawing a breath, a human has the privelege of having the length of its life measured precisely to a finite number of breaths and heart beats. A company can remain in its state of not breathing but not dying for as long as it serves its purpose. A company can out-live a human being by generations. Think: Henry Ford or Walt Disney.

Then there is the purpose. As a race human beings have lived and died pondering their purpose for around 50,000 years. Vast fields of knowledge have been created in trying to understand their purpose. Religion, Philosophy, Astronomy, even Physics, are just some of the fields of thought that have attempted to discover the purpose of a human being, albeit via different routes; but a company is born knowing it’s purpose, and simply knowing your purpose can give you an invaluable advantage in achieving it.

Now we know what a company is, and we know its purpose it is probably time we give it a context within which it can play out it’s ongoing pursuit of fulfilling its purpose, so here we have a little story:

A person starts with a piece of property. They are ambitious, hard working and innovative, and decide to develop their property and sell the resulting product for a profit. Once they have done this through their own labour they end up owning more property than what they started with and they can repeat the cycle to generate more property for themselves.

It goes without saying that the person in the above folk tale should be entitled to keep the extra property created through their ingenuity and efforts, (It should be noted that money and therefore profit is a form of property) but what happens when you start fiddling with the objects and subjects involved in this tale? If you alter any one of the key aspects of this fable does it change the way the story should end? What happens  when the person isn’t human? What happens when product that is being sold for a profit was not made from any pre-existing property (i.e. made from literally nothing)? What happens if the product they sold for a profit caused harm to the person that bought it? Does it make a difference whether the person who produced it was human or not? And what if the person who owned the property invested neither labour nor intellect into the production?

These are some fundamental questions that have essentially remain unanswered in our society. The above tale is the fable that sits at the core of capitalist theory. It is the moral cornerstone of the system, and the foundation of  millions (possibly billions) of commercial ventures that have occurred since its inception. Yet how many of these commercial ventures can rightly claim a moral justification for their existence based on the fable?

If you have based your society’s economic system on a folk tale/myth, is it so inconceivable that a monster might creep into it like a wolf in sheep’s clothing? If you want to project human emotions onto inanimate fictions, at the other end of the scale you had best be prepared to also have sympathy for the devil.

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