Corporations are Inhuman

The legal definition of a corporation is a fictitious person. That is to say, the law has created the concept of an entity which has most of the rights and responsibilities of a human person. By definition, the corporation is inhuman. (In this essay, I refer only to the large, usually multinational, privately owned, joint stock limited liability corporation. Any one or two dentists can incorporate, but that's not the same thing.)

If that were all I had to say, it would not be much. But I wish to show that corporations are not merely inhuman, but inhumane; they are evil and should be eliminated. I cannot tell you how this may come to pass. I fear we are in for a very long period of rule by corporations: corporate feudalism.

(I realize that "corporate feudalism" has been used by different people to mean different things. I'm sorry, but our language only permits a certain degree of specificity at a given level of verbosity. Let's keep it short, and run with this.)

How are corporations inhuman?

Corporations have most of the legal rights of human persons, and some of the same responsibilities. They respond to many of the same forces that compel humans, but often in a different manner. They do not operate under the same restrictions, and there lies the rub.

The most important way that law gives substance to the fiction that a corporation is a person is the granting of limited liability. This means that no matter what action a corporation takes, the individuals who comprise it cannot be held liable -- they do not have to pay for the crimes and torts of the corporation. Stockholders are liable in to limited degree only -- up to the value of their investments. Officers may be held liable in some extreme cases, but these are very rare. Ordinary employees, as long as they can show they have acted within the structure of the corporation, are generally shielded from any consequence -- they can kill, maim, steal, or destroy, and go home at night to sleep peacefully in their beds.

In practice, corporations can do things that would bankrupt a human, or send him to jail, without serious consequence. Titanic cash settlements and awards may be mere scratches to multinationals with multi-billion-dollar cash reserves. Even if the corporation is bankrupted, the responsibility for the disaster is spread over many humans, none of whom will pay the full price, and most of whom will pay hardly any price at all. Often, the smirking officers and major stockholders walk away far richer than they began.

Corporations, being incorporeal (a paradox if there ever was), are not compelled to die in less than a century. They are not afflicted with the same diseases as men. Their range is greater; they are able to project their will farther, with greater force. There is no limit to a corporation's growth.

It is possible for a man to accumulate great wealth, to employ many people under his direction. But so long as his organization remains personal, it depends on him -- falliable and human. Numerous examples show that it is extremely difficult to pass this sort of power onto one's descendants intact. And in the absence of corporate structure, many personal empires have collapsed long before the men who built them.

Corporations remain strong because any single person who is a part of one can be replaced. The by-laws of a corporation -- its constitution -- provide mechanisms to replace any person who is a part of it, be he founder, president, or major stockholder. A corporation is a kind of self-repairing machine; a worn part is replaced with a new one, and the corporation goes on.

Wells Fargo founded 1852 150 years old
DuPont founded 1802 200 years old
Canadian Pacific Railway founded 1881 120 years old
Sears founded 1893 110 years old
Proctor & Gamble founded 1837 160 years old

Corporations need not take time to eat, eliminate, or sleep. Small corporations do slow down quite a bit at night, but large multinationals go 24 hours a day. A common thread in the lives of very successful men is that they do not seem to need more than about 4 hours of sleep a night. What could they do if they did not need to sleep at all?

Who really controls a corporation?

For those accustomed to thinking that corporations treat their low-level workers as disposable, but that the great ones at the top are immune, some discussion is in order.

Let's look at the CEO, the Chief Executive Officer. He seems to be all-powerful; he gives all the orders and can fire anyone. He, too, can be replaced, and often is. The CEO is appointed by the Board of Directors. Many a board meeting has revolved around the removal of the CEO and the installation of another. Next time you see the Big Boss roll by, remember this: His job is on the line, too.

Well, what about the members of the Board of Directors? In practice, they are usually confirmed in their positions, and can safely enjoy them -- so long as they perform in the expected manner. But the stockholders elect members of the board, and generally a stockholder meeting is held every year. Stockholders do not usually attend annual meetings; if you hold stock in a corporation, you receive a notice in the mail, together with one or more proxy solicitations. You sign one and mail it in, and whoever you have authorized to do so will vote your shares on your behalf.

Corporations that run into trouble -- they fail to pay dividends, their stock price plummets -- are often involved in proxy fights. Outsiders or insiders try to take over the Board of Directors, and if the current board members are doing a bad enough job, the stockholders may well try new hands at the big table.

The founder or founders of a corporation usually hold a great deal of power in the beginning; at least at the time of founding, the founders own it all. But they tend to sell off a lot of their shares very early, to raise startup capital, and often sell more as the share price rises. It's not unusual to see a founder shown the door.

Well, what about the stockholder? Surely nobody can replace him, right? But most multinationals have millions of shares outstanding; it's common that no single stockholder has even 1% of the total. Whatever power he has is diluted and spread over many thousands of individuals.

The stockholder of a corporation can lose his control in many ways. Commonly, he sells his shares to another, and with them, his power. If a major stockholder takes a position consistently opposed to corporate values, he will elect board members who run the corporation into the ground, and the stock price will fall. If the rogue stockholder brought this about with the help of other stockholders, he will lose their support. He may be able to hang onto his shares, but he will lose the ability to control the Board.

If he is truly powerful, holding a majority of shares, he may indeed be able to destroy the corporation, or choke it to his own ends. But then, it ceases in a sense to be a true corporation, and is merely one man's toy. This is almost unthinkable. It is very rare for one man to have enough wealth to personally take over a large corporation; if he does, he will generally be so steeped in corporate thought that he would never do anything to destroy it. And, in time, he will sell off shares of his new acquisition, and the status quo will return.

All this sidesteps the fact that the majority of all publicly held stock is held by other corporations and by mutual funds, in which the greatest investments are made by labor union pension funds. In a way, Marx has triumphed -- the workers do own the means of production. But they do not control it.

It is tempting to hope that government or law can control a corporation, but a large corporation has so much more power that this would be like a rat gnawing the leg of an elephant. On occasion, the rat is unusually big and the elephant weak, and the rat comes away with a bit of flesh; the elephant is somewhat damaged. But don't imagine -- to switch metaphors -- that the tail wags the dog.

An excellent example is the giant lawsuit brought against Big Tobacco by a coalition led by the Attorneys General of several states. A whopping settlement was made, the lawyers were paid off, and cigarette advertising toned down. Coffin nails are still sold legally and openly in every state, and thousands die each year as a direct result. I don't say this is all bad! I don't think tobacco should be illegal. The point is that a great effort was made by a large group, and with little effect.

We have exhausted all the persons who might control a corporation, and are left with the truth: Nobody controls a corporation. It is an autonomous organism, with a will of its own. If that doesn't scare you already, I really think it should.

What goals does a corporation pursue?

A corporation, like any other organism, exhibits certain trophisms -- it moves toward certain goals and avoids others. It will tend to ignore any goal that neither aids or hinders it in its primary goal.

The primary goal of a corporation, like that of any other organism, is survival. Closely linked is the goal of growth. This should not be considered the primary goal, however; pursuit of growth is merely a strategy that ensures survival.

Money is the blood of a corporation, so naturally it is an important goal. But large corporations, oddly enough, do not put profits ahead of everything else, as the common wisdom would have it. Steady growth is a better long-range strategy for survival than mere profit.

Corporations seek freedom -- for themselves, not for anyone else. They are sensitive to the negative goal of avoiding restrictions placed on them by government and law. A corporation commonly employs entire gaggles of lawyers and lobbyists whose primary duty is to avoid any interference from outside. When legislation or court decisions compel a corporation, these same evil men work hard to subvert and circumvent all these outside influences.

There are other values which are pursued in order to further the primary goal:

Image is important to a corporation. Many corporations sell products to the public; since all competitors generally offer equivalent products at similar prices, only image can enlarge any one's market share -- or contract it. Thus advertising and marketing are important departments in any corporation. No amount of money is too much to spend improving one's image. It's always cheaper to buy ads touting, say, one's ecology-mindedness, rather than to actually clean up one's stinking chemical plant.

Corporations that do business exclusively with other corporations or with governments are less concerned, but still careful about image. A bad image is contagious, and customers don't want to catch it. Although you cannot go into a store and buy anything made by Bechtel, they still run advertising from time to time, trying to spin their image away from that of a faceless, bulldozing, corrupt monster.

Order is the backbone of any corporation. If every employee and officer made his own decisions, you would no longer have a corporation. Instead, the corporation is highly structured, with rules and proceedures for every conceivable situation. Nothing is more laughable than a corporate manager urging his underlings to "think out of the box". That would be anethema. What he wants is a fresh idea inside the box. The box itself is sacred.

Data is essential. If money is the blood of a corporation, image its face, and order its skeleton, then data is the mind itself. Data, persisting in storage year after year and decade after decade, is what gives a corporation an identity, a character, and a direction. A certain distinction between an individually managed company and a corporation is the location of data. In the former, the most important plans and secrets are kept in the big boss's head. In the latter, these data are kept highly formalized, on paper and on disk.

Since the dawn of corporate life, and extending into the present, paper has been the preferred way to record data. However, the computer is making huge inroads into paper's old bastion. An electronic database has many advantages over a paper database, but it also has weaknesses that paper does not. But that's another node!

If every single human associated with a corporation were to walk out at once, leaving everything -- especially the databases -- untouched, an equivalent team of similarly trained people could walk in the next day and have it running again in short order. There would be some disruption, since much business is kept in human brains -- a corporation's short-term memory. It would not be any worse than a human who had a bad knock to the head. But if everybody showed up for work as usual, only to find that all the paper had mysteriously disappeared, all the files; all the hard disks erased, all the backup tapes and CDs gone -- the corporation would cease to exist.

Image, order, and data are not simply parts or aspects of a corporation. They are goals which are actively pursued. A significant portion of a corporation's resources are spent to boost image, increase order, and build databases. This activity is all done to ensure the corporation's growth and survival.

Finally, corporations need manpower -- for brains and for brawn. If corporations have any interest in human welfare, it is so that men can continue to serve them.

Note that corporations, despite their long lifespans, generally have only short-term plans. Most actions are devoted toward the fulfillment of goals within months. Five years is considered long-range. Thus the corporation is unable to avoid taking actions today that will imperil it in, say, 25 years. This is a vulnerability, but it is also a threat to humanity. You don't want to be near one of these monsters when it falls over and dies.

Why is any of this bad for humans?

Bad is putting it mildly. You know all the science fiction stories that begin with the invasion of Earth by bug-eyed aliens? Well, you're living in one now. You are sharing your planet with a small number of very large, very powerful organisms who have no particular reason to care about you -- and which do not even have the capacity to love.

A corporation -- like any other organism -- puts its interests ahead of everybody else's. It does not even care about the welfare of other corporations, except insofar as that is helpful to it. That is why we call it "corporate feudalism". There is no grand conspiracy. Corporations work together when it is to their advantage; when it is not, they go to war. War is costly and there is much to be gained by working together, so corporations tend to be tied together into networks of common interest. This structure resembles the ancient feudal system of more or less independent lords, each paying allegiance (or not) to a greater lord, whose control over his vassals is somewhat unstable.

Corporations do seem to be working toward a more peaceful world -- peaceful on the corporate level; banana republic wars like the one in Iraq are good for business. Corporations solidify their associations and try to eliminate causes of friction. One effective technique is the merger. By assimilating the opposition, the corporation terminates the threat.

On a purely theoretical level, it cannot be a good thing to have the balance of world power held by inhuman creatures. If you throw two rocks in the same direction, their paths will diverge -- or collide -- unless bound together, say, with a bit of string.

Human goals only contribute directly to corporate goals in one way: Stockholders want greater dividends and rising stock prices. Even this is not in accordance with the basic drive of the corporation, which is to survive. Stockholders' wishes are not treated seriously unless they are able to make trouble, by organizing into independent stockholder associations. Indirectly, as noted above, a corporation has an interest in its workers. But as they can be easily replaced, this is not a great concern. The history of the labor movement shows that a corporation will react most promptly to worker needs when workers organize and threaten the corporation directly. However, labor union leaders have a tendency to sell out to corporations while looting union coffers. But that's another node!

Obviously, one can deduce from first principles than corporations, being inhuman, must be inhumane.

There is a further theoretical argument, which may or may not convince you. It is that corporations have no souls. By definition, a creature without a soul is dangerous; at best, it is a tool of whatever will captures it -- and corporate will is too strong to be mastered by anyone.

(I believe animals have souls, but lesser than man's -- I do not subscribe to the belief that all souls are equal. But that's another node!)

With the exception of the corporation, there may never have been on Earth any creature capable of will without a soul. There are, though, many examples in literature. The sole prominent example of a soulless creature that did good, not evil, was the golem of rabbinical lore. After saving the Jews who created it, the golem begged to be destroyed, saying it had no soul.

All religions that believe in a soul say also that the soul is the source of all goodness within man. We speak of a soulless man and we mean, at the least, one who is not to be trusted, if not one outright evil. It certainly seems to me -- who has no religion, who is not at all certain of the number or kind of gods in power -- that lack of a soul prevents a corporation from feeling of any kind. And the most terrible thing is not one who intends you harm, who hates you deeply -- it is one who simply does not care if he crushes you as he goes on his way.

I could continue with a long list of specific grievances, but I did that for "Banks are Evil" and got a demand for logical analysis. Only human, I can do one or the other, but not both at a sitting. You are free to look for examples of corporate greed, arrogance, and specific atrocities -- you won't have to look hard or dig deeply. Corporations steal, poison, humiliate, burn, destroy, loot, and degrade.

On second thought, I will include here exactly one example of corporate inhumanity. It is not the greatest, but for some reason it has stuck in my mind for 25 years.

Nestle SA (founded 1866) is the world's largest food and beverage company. In the 1970s, Nestle, as well as others, gave away powdered baby formula to poor women in Africa (and other lands), along with a marketing program that touted formula over breast milk. Mothers were told that breastfeeding was old-fashioned, bottle feeding progressive. The mothers often found that by the time the free samples were used up, their own breast milk had dried up. But the mothers had no money to buy Nestle's product, and their children were too young to eat regular food.

As is usual in such scandals, "guidelines" were put in place to regulate this practice; today, Nestle abides by these guidelines when convenient and flouts them when they can. African mothers are still pressured into feeding their newborns formula, whether they can afford it or not. The matter is obscured by the horror of babies born to women infected with HIV, who stand to pass the virus to their infants and for whom formula may make good sense. But formula, mixed with local supplies of often-tainted water, carries its own hazards. Its use is never justified for the babies of healthy mothers.

Other corporations have killed more, and killed more horribly, but this always makes my blood run cold. Healthy breast milk is the best possible food for babies, period. To take out of the mouths of babies perfectly good food, and substitute for it a powder worth far less, then to allow market forces to take away even that thin gruel -- that is cruelty in a temper that, to me, makes simple napalming almost comical.

But don't we need corporations?
Don't they do a lot of good?

All of modern society in the Western world is produced by or heavily controlled by corporations, with very few exceptions. Some of that society is undeniably good, no matter how much of it is bad. Corporations gave us the microcomputer and have eliminated much disease. Corporations make our cars and clothes, sing us to sleep, and wake us in the morning. If all the products of corporations vanished from our lives, we would generally be standing naked on bare ground.

I will not even bother to dip into the question of whether all this could have been done in another way. I think so, but that's past. My point is that now we need to make a choice. We need to ask if what corporations give us is worth what they take away. I don't think so.

But we don't have to settle for one or the other, primitive poverty or corporate slavery. I believe we can find an alternative to corporations, just as we can find an alternative to governments -- it may well be one and the same thing. Perhaps we can keep this alternative firmly under human control. Then, no matter how powerful it becomes, it cannot reach toward its own ends at our expense.

I even have some thoughts about alternatives, sketchy as they may be. But that's another node! More importantly, I believe in the human spirit and Yankee ingenuity. If we want it badly enough, we will figure something out.

What can we do?

I wish I knew. Protest is boring and ineffective. Direct action is risky and ineffective. Vote for politicians you hope will support your agenda against the corporations that give them millions to promote theirs. Take your money out of stocks and put it to work in your own business, and run your business like a human person.

Computers have no souls, but the computer at your desk at home is under your control -- if you learn enough to exercise that control. Your computer has no independent will; it will carry out yours. It is only a tool, not an enemy. The Net -- (the great network of all computers, silly to call it the Internet, there is only one Net) -- is potentially more powerful than all the corporations put together. And most computers are in individual hands. We might just be able to start a revolution -- if we only knew how.

I fear we are in for a long, hard, cold winter.