Saturday, February 20, 2010

Some observations on corporations

Corporations are easy to part with jobs. Remember the merger of HP and Comaq? At least 10,000 jobs lost in that deal. But the executives got fat bonuses. Corporations will layoff employees if they think that would increase their stock value for the short term. You know, pump and dump.

I've also been watching a corporation, called The SCO Group, sue IBM over software code that it doesn't even own. 7 years of litigation for a company that spent two years in discovery to find 230 lines out of millions of lines of code in Linux. All they really want is to get in front of a jury to exhibit a drama about a small company against a big company for a big fat award. SCO thinks it can hide behind the corporate veil. And during this litigation, board members and executives took bonuses, sold stock, and profited very well at the expense of everyone else.

Corporations are socialism, pure and simple. They socialize their liabilities and privatize their profits. Have you heard of the phrase, "externalizing costs"? Walmart is famous for that sort of behavior. And now that the courts think that corps can donate to political causes because they're "persons", it's only going to get more interesting. In my opinion, if you enjoy the privilege of limited liability, then you're NOT a person. End of story. You simply can't morally have limited liability and the same rights as real persons.

But then again, I could be wrong.


Rod said...

I think that's a bit harsh on business. After all, corporations are just a piece of paper that is used to organize groups of people into a single cause. Their creation was one of necessity, to handle the complexities that arose from the industrial age.

That being said, there is much truth to what you say. But I lay the fault on the individuals that lead the companies, not the companies themselves. There are some corporations that the presidents choose to be responsible to all people, not just themselves. Of course, these companies are now the exception, not the rule.

In the old days, farmers would purposely leave a small percentage of their crops for the poor and homeless to go through the fields and eat. This practice has become extinct. There needs to be a modern day version of this practice developed as a matter of conscience.

(Ironic that one corporate exec that is taking this seriously is Bill Gates, don't you think?)

digitalfirehose said...

Rod, thanks for the bit of history there. It certainly lends some perspective to my post. I'm glad we found some agreement on this topic.

Although I do think that corporations have a place in this society, they have been placed on a pedestal far higher than the real people they represent. I see that corporations represent a consolidation in power that no single person could overcome. Even small communities can have difficulty when they seek redress of any grievance they might have with a corporation.

Your point of history in farming is a great example of what corporations have done to farming. Large agribusinesses like Monsanto and ADM seem to harbor little interest in the communities they serve relative to profits. That would explain the lack of goodwill towards the less fortunate in the form of donated crops.

With Bill Gates, it is true that he is perhaps the greatest philanthropist ever, having given $170 billion to various causes. On closer inspection though, he's been shown to be a rather proprietary contributor. Agreements between his charity and research entities required NDAs, in other words, he's against free science. Here is one example:

While the headline is that he is making the research "open source", the findings are restricted to the 16 recipients. That is not open source.

So while it's true that individuals are to blame for poor corporate governance, there's no point in tempting fate by giving corporations the same rights as persons as long as they enjoy the privilege of limited liability. They cannot be trusted to have all the rights of real persons with limited liability.