Have you heard about the GM ignition switch recall? It was a longstanding problem that resulted in a number of deaths but ignored by the executives. Rightly, many are horrified but few have the magical insight or the systems theory to understand how GM could be so stupid. Here is how a Pagan might understand the problem:
Corporations are useful tools. They are one of the most effective and efficient ways of humans to work collectively. They can be built and focused on very specific or very general tasks, and bound to those tasks legally by the very documents that form the corporation. They can have whatever governance structure the establishers desire: autocratic, democratic, consensus, or whatever. In the creation of a corporation, there exists one of the few ways private citizens can effectively establish what amount to laws for those involved in the project and how that project will function in the world. It also has the virtue of being able to outlast any of its founders, and so it is an effective way of projecting values across generations. But of course, none of that has to happen. Corporations can be created to simply seek profit to the exclusion of all else, and be run in a completely autocratic manner. Today many are.
![[Photo Credit: Bo Nash/Flickr]](https://wildhunt.org/wp-content/uploads/2014/06/169161938_c979f588f9_z-500x333.jpg)
[Bo Nash/Flickr.]
Pagans, due to our magical inheritance, and Jews for similar but older reasons, know of a creature that is very much like the corporation: the golem. The most famous golem tale is from Prague during the reign of Rudolf II, where Rabbi Lowe made the figure of a man out of clay, and using divine words animated it to protect the Jewish quarter from pogrom, what we would call today ethnic cleansing. In the bad version of the story, the golem runs amuck and can’t be stopped. It is extremely strong, has the power to work tirelessly and is (mostly) invulnerable. But that which is made by word can only be unmade by word. So the Rabbi, who wrote Emet (meaning Truth, spelled Aleph Mem Tov) on the brow of the golem to bring it to life, erased the Aleph to spell Mot, meaning death, and deactivated the creature.
The similarity to a corporation is striking. Like a golem, a corporation is made by words; its articles of incorporation once signed and seal by the secretary of state bring it to life. At one time ‘life’ might have seemed like hyperbole, but living in the age of the Citizens United ruling, corporations have personhood before the law and with it ‘human’ rights. It will continue doing what it was set up to do unless commanded or forced to stop. This can be very hard to do when those with the power of command are benefiting (making profit) from the creature’s actions. It is effectively immortal, only to stop functioning when it runs out of cash or credit, its lifeblood so to speak. It can only ‘die’ if it is disbanded by sale, in which case it continues in another form, or experience ‘true’ death by the revocation of its articles of incorporation, which will actually end it. Like the golem, it will only stop when its words of creation are erased.
![40 Wall Street [Photo Credit: Massmatt/Flickr]](https://wildhunt.org/wp-content/uploads/2014/06/40_Wall_Street-400x500.jpg)
40 Wall Street [Massmatt/Flickr].
We’ll come back to the golem in a bit. The ‘real’ problem GM and others face is that the problem, in this case bad governance, is the result not of human intent (no one wanted anyone to die), but the unanticipated properties of the complex system that is the GM corporation. And this is true of all systems. In GM, they did not recognize that their governance structure, motivated primarily by profit, took no responsibility for fixing the issue until forced.
The problem with golems is that they are not persons; although some versions of the story make them so. They are ordered to their task and can’t choose to stop. Choice is the basis for morality, and so without it, the golem can’t be the moral actor. This dynamic plays out in these two posts about GM and Enron from Forbes Magazine and Robert Reich centered on the “I’ll believe corporations are people when Texas executes one” meme. They each have their points, but I’m with Reich on this one. The persons who made the moral choices did not pay the same kinds of penalties that a human would for the same outcomes. They did not go to prison; they were not executed, although Enron was disbanded. I’m for much harsher penalties. Besides holding the executives and other deciders to criminal account, when a corporation is charged with any crime, all trading on its stock should be stopped. This prevents the stockholders from being able to unload what may suddenly become worthless property. It also makes the stockholders accountable for how their property behaves, and therefore they are much more likely to exert their own responsibility for right governance. Should a corporation be guilty of murder, immediate liquidation of all its assets; the end of all trading of its stock, and the revocation of its articles of incorporation is about the closest we can get to execution. I would look to the outcomes to determine if creditors should benefit from the liquidation.
As Pagans know, the other side of the coin from death is life, and this case immortality. Corporations don’t die unless killed. As it stands they can kill and pay wergild and continue in business. The unfolding profit motive makes the risk calculation simple: if the profit is in the billions and the price for killing humans, never mind other species and ecosystems, is only millions, than it is acceptable to kill humans. Since making profit is the life of corporations, killing people while making profit is just good business. It also puts corporations higher than humans on the food chain. I have a problem with this.
It is no accident that, up until now, humans were on the top of the food chain. We struggled long and hard to get there. We tend to eliminate all large predators wherever we live. It is why I don’t believe in vampires; we would simply hunt them down and kill them. Now we have created a kind of golem, a system-creature, in ways that we can scarcely govern. We didn’t have to, and there are many corporations which aren’t, but we did create enough of them to threaten us all. It is profitability that blinds corporations to climate change, to the inequities of our medical system, and to the cruelties heaped upon the economically disadvantaged. What will happen when robots have rendered 80% of the work force redundant?
Will we tolerate beings that prey on us? Generally humans don’t.
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Great article. This is not a perspective that had occurred to me before, but it is going to change the way I view corporations in the future. We often say that things have ‘taken a life of their own’ when they seem to act beyond human control, and these large companies who appear to act in an autocratic manner without impact from its so-called management and beyond the reach of the individual workers would certainly fit that description. Actions are based upon the nebulous concept of ‘best for the company’ without incorporating what is best for the humans involved, the community, or the environment as a whole. Single minded profit before people.
“This is not a perspective that had occurred to me before, but it is going to change the way I view corporations in the future.” Ditto. An excellent description.
I’ve worked in corporations ever since I graduated from college almost 30 years ago – this rings mostly true. I’d add a couple more points.
Like any human institution, corporations mirror the values of the people who compose them, especially – but not exclusively – those at the top of the hierarchy. They are no better or worse.
I’ve been a part of hundreds of engineering design reviews and I’ve never heard anyone advocate a “profit vs. lives” calculation. What I see constantly, though, is an underestimation of risk, like a teenager with a fast car. The lure of the thrill (profit) causes people to say “ah, it won’t happen.”
Both of those are caused, I believe, by the dehumanizing effect of corporations. Part of that is, as you say, shielding individuals from consequences. More, I think, is the limited scope of their purpose – to make money. That is exacerbated by the Wall Street casinos where honest investment has been replaced by manipulative speculation. The long term good – including the long term profitability of the corporation itself – is continually sacrificed to make this quarter’s numbers look good so the stock price will go up.
I’ve seen otherwise good people make horribly immoral decisions because they felt they had to, or they’d lose their livelihood.
As a Pagan who is supported by my work in a corporation, I do my best to exemplify and promote my values of honesty, reciprocity, compassion, and reverence for Nature. That won’t solve the problem, but it will make it better. Corporations aren’t going away any time soon. We need more good – and awake – people inside them.
I agree, and your point about underestimating risk is spot on. I see the same thing all the time.
I would further Sam’s remedy and hopefully increase corporate sensitivity to risk by requiring that all shareholders of a corporation individually face charges for any crime or negligence committed by that corporation.
Jail time for shareholders would bering governance roaring into the room.
Jail time for shareholders would require a total redefinition of investment, which in general means risking only the amount invested. I don’t think you’d get investors to (literally) buy into this, and it could precipitate an unintended “Atlas Shrugged” moment.
I think you’re conflating fiduciary liability with moral accountability. If I knowingly lend my car to someone for use in a crime I have taken on the fiduciary risk that I will lose my investment in that car. The law does not stop there and I would also face accountability for conspiracy to commit the crime in the first place. What if my little outlaw gang first formed a corporation, would that limit our risk to only tangible assets? Should the corporate veil protect us from moral costs?
That piquant allegory has, alas, nothing to do with the structure of investment in a corporation. (And, yes, the cops would indeed impound the car as a criminal tool as well as arresting you for complicity).Interestingly I just read an historical account of penalizing corporations, in “Capital in the Twenty-First Century.” Some industry leaders in France were arrested after the Occupation for collaborating with the Nazis by letting their corporate assets be used in the war. Leaders went to jail and corporations were nationalized. This model is worth pondering to curb corporate criminality because it would deter both corporate leaders personally and corporations as economic entities.
I don’t see how that’s practical. Esp. for people who invest as part of a 401k where they likely own parts of funds that buy and sell off shares of different corporations all the time without notice. I couldn’t tell you exactly which shares I own today nor whether I will own the same tomorrow. What about pension plans that invest in the market?
We could always pressure employers to give people actual retirements instead of leaving employees at the mercy of Wall Street gambling.
If pensions are paid out of a fund (which is the normal practice) rather than out of the current operating budget of a company, the money in the fund has to be invested in something. If it doesn’t earn interest, collect dividends, or gain value over time in some other way, the purchasing power of the money will be eaten away by inflation between the time the money is set aside and when it is paid out to the pensioner. Just as if you yourself had started a savings account in 1964 that paid low interest, the dollars you put into the account in the Sixties will buy about a tenth now of what you could buy back then. In 1964, you could buy an ice cream cone, a magazine or a newspaper for a dime.
If the employees are getting a conventional pension instead of money that they invest themselves, they are at the mercy of the company’s or labor union’s decisions about how to handle the fund. A properly managed fund need to receive adequate yearly contributions to cover future draws on it, and has to be invested in something whose value will increase fast enough to keep up with inflation. Both of these depend both on determination to do the right thing, and accurate predictions about the future. The temptation is always to underpay into the fund and try to make up the shortfall with speculative investments.
If you are saying that pensions should be paid out of the company’s current operating budget, the people who are already retired won’t get their pensions if the company goes out of business. Also, no other company will want to acquire the ailing company because the purchaser will have to take on the responsibility to pay those unfunded pensions. The only pension fund that can operate this way is Social Security, which relies on the premise that the United States government isn’t going to go out of business.
This is moronic and will never happen. You can’t hold people who have no input into the decision making process accountable for other people’s decisions.
There’s no reason not to hold those in management accountable, however. Individuals who make irresponsible decisions without benefit of a corporate shield are.
Engineers don’t make these sort of decisions, Corporate lawyers and accountants do. They figure out how much it would cost to fix the problem versus how much it would cost to pay off those harmed by actual failures without admitting liability to discover which is more cost effective for the company.
Pingback: Golem: a Pagan view of Corporations | The Forest Witch
I like the analogy of corporations as Golem, but even more I like the notion that stock sales should be halted and thus stockholders/profit takers should be brought up short.
A wonderful idea. People will just stop investing, the corporations will go under and everyone will be out of work. Genius, sheer genius.
“Hmm… Hey Bob, it says here that corporations will no longer be able to get away with murder. We better dump everything and go long on heroin and prostitution, instead!
Yeah, somehow I think that investment will continue as it always has, despite these companies being held to a standard that we, as a society, endorse.
Corporations are already being held to the standard we as a society endorse. Juries award massive punitive damages and judges reduce them because corporations make campaign contributions to legislators from the judge’s party.
This will not stop until a couple of judges who do this end up swinging from a lamp post.
Go get a rope.
Slippery slope arguments are really lame here, what did people do before corporations? Corps are the only source of employment? your premise that life with “stop” is false, smaller businesses and merchants will fill the void created, just like they did before corpertions came along.
Exactly, Earnest. When did Pagandom become filled with such status quo loving pearl clutchers? Where have all the radicals gone? The end of corporations?! Gods forbid!
Small business cannot entirely fill the void. My understanding is that the corporation was developed several centuries ago in order to enable large numbers of people to invest in an enterprise without being directly involved in the running of it (as in a business partnership) and without having personal financial liability for the corporation’s business losses or anything the corporation can get sued for. That doesn’t have to mean that nobody and nothing is legally responsible for the corporation’s actions, but these days, it often appears that no one is.
In a large, complex society, this kind of entity serves a useful purpose. The specific laws and regulations that place limits on corporate activity have been different in the past and could be changed again, to cut these soulless juggernauts down to a controllable size.
I lie your piece Sam. I agree that corporations are essentially a kind of alien life form in the ecosystem of the market. I think your legal idea has a weakness- freezing shares can cause damage to owners even if the company is found innocent. I suggest the following- which I and others have been developing. It also addresses Charles Cosimano’s problem.
Three Strikes and You’re Out: The Corporate Death Penalty
If a corporation breaks the law three times within
20 years in such a way that people are injured physically or
financially, the offending company should have its assets sold to the
highest bidder, the money going first to pay for damages, second, to
pay for the sustenance and retraining of its hourly wage employees, and
if any remains, to pay off public debt. Share value becomes zero.
Top management would be prohibited from ever working together, to
destroy the culture of corruption they created and sustained. The
firm’s name is abolished for a generation. Should a company change its
name and claim to be “different” – as Blackwater did by becoming “Xe,”
the same penalties will apply so long as top management or ownership
stays largely the same, say 50% or given the politics of proxy fights,
even less.
A first conviction would injure share prices by injecting uncertainty
as to both management and the company’s future. With a second
conviction share prices would tumble, virtually guaranteeing top
management will be ousted, their careers ended. Managerial risk-taking
will become buffered by managerial responsibility. A different kind of
personality will be valued at all levels, pushing back against the
advantages sociopaths and near sociopaths currently possess in rising
to leadership positions. Human beings will benefit.
Most probably the corporate death penalty creates circumstances where
it will rarely need to be employed. Top management will self-police
because they stand to lose so much with even a second conviction. Even
if they do not pay attention, shareholders who stand to lose
everything certainly will because shareholders have no golden
parachute.
So we the public win at every stage of the process.
The market economy is amoral. When bad behavior is profitable, the
market encourages it, as it does today. But with a corporate death
penalty the market’s profit orientation will improve behavior rather
than reward corruption. The corporate death penalty moves the market
away from being our master towards being our servant.
A ballot initiative provides a peaceful and humane way to bring
corporations under control. If this initiative was on as many ballots
as possible, and repeated regularly until passed, the issue would
remain in the public eye. I’d contribute significantly to a serious
effort, and I am not rich.
The average voter has had it with our new aristocrats, and unlike
guillotining human aristocrats, this penalty kills no one and sets no
bad precedents. It is even fun to contemplate…
I like the idea, Gus.
This is totally unrealistic. A corporation breaks more than three laws an hour, never mind in two decades. The pool of talent able to run a corporation is sufficiently small that it would prevent this. The first time it could be demonstrated that a corporate loss was attributable to this law forcing them to hire an incompetent CEO because all the competent ones were disqualified would usher in it’s speedy repeal.
You might be able to do something that dissolved a corp based on the actual death of a person, but never on financial injuries. Many if not most business dealings require someone to lose financially for another to win. Commodities trading in particular.
But nothing will ever happen so long as corporations and/or their upper management can make campaign contributions to politicians. Many states forbid or restrict ballot initiatives, probably for this reason.
Your solicitude to the powerful is touching. I rather explicitly wrote “three times within 20 years in such a way that people are injured physically or financially,” I’ll happily put a lower limit on the financial damages if that makes you feel OK. Otherwise you are simply defending criminal organizations.
I doubt you could get it on the ballot in any state. The state legislature and/or state court system would promptly quash any attempt. Too much money is at stake.
I don’t see why not. Most people dislike corporate lawlessness and the initiative process was devised years ago as an end run around the legislatures and governors in the pocket of the ultra wealthy. The Supreme Court has already saiud corporations are people legally, this just takes that logic in a direction most conservatives approve for real people. And most of the rest of us will like it for others reasons.
You miss the obvious. That corporations can give more campaign contributions and speak in a more succinct voice than citizens ever can collectively. They’re easy to listen to and to please.
I went down to Occupy Wall Street when that was going on. I left after about an hour. Why? Because the mewling mass of morons involved couldn’t stay focused for even that long. Practically everyone there insisted on injecting their pet inane injustice which was irrelevant to the objective at hand and demanding it be addressed. The imbeciles involved couldn’t stay on topic which made any attempt to formulate a strategy to deal the stated reason for the occupation impossible. No strategy, no solution, nothing to present and talk to the legislators about.
Politicians are given every reason to accede to the wishes of corporations plus they’ll happily make campaign contributions to boo as well as buy them dinner.
Why would they want to deal with the general population and face a barrage of nutcases whining about the current situation and having no workable solution to offer to improve it. And to top it off they won'[t give them significant sums of money?
I hate corporations and I have to admit I’d rather deal with them than the rabble.
You have removed yourself from any real point in continuing the discussion, not so much from your full-of-yourself attitude towards those you look down on, which has arisen over and over again, as to your unwillingness to conceive the difference between OWS, which had no real focus other than outrage, and a focused initiative to channel that outrage. If you cannot grasp the difference at this point, then I am at a loss to help you do so, because it seems obvious to me.
Then you’re an idiot. OWS *was* the opportunity to create a focused response for the outrage. The morons involved blew it because they couldn’t behave like adults.
I guarantee what you’re suggesting be done will soon touch off a campaign against the government that will be the US’ version of the Troubles in Northern Ireland because the government and the politicians, and not the corporate management will be seen as the architect of a conspiracy for the theft of their assets.
But maybe you want an armed rebellion in the streets of our country.
I don’t agree OWS blew it. They successfully changed the subject from hand wringing over the debt (discussions of which low level workers must bare the brunt this week) to the larger, nationally ignored problem of income inequality. If not for OWS, no one would have mentioned that criminally-inclined bankers paid no price in destroying so many lives.
Problem solved? Not at all, but problem identified is a first and necessary step.
They played a crucial and very important role, and should be honored.
One other point. The pool of talent is not that small, they only claim to be. Not only is there plenty of evidence that the most highly paid executives perform less well than more modestly paid ones, the Mondragon worker cooperatives in Spain, in 50 years, turned the poorest region of the country into its most prosperous, including R&D with Microsoft and nanotechnology, a university, an unemployment rate a tiny fraction of Spain’s, and a requirement that their CEOs never be paid more than 6 times what the lowest paid worker in a business was. There are many other examples, but Mondragon is the biggest and longest lived.
Interesting but I’m not seeing how it could be instituted here in existing corporations. It would require essentially the confiscation of private property by the state in order to turn it over to the workers. The right wing wack-a-doodles would correctly be screaming about a socialist takeover and redistribution of wealth.
The only possible way of doing it would be requiring all new corporations to use this model and then face an uphill battle competing with current corporations which have better financing and market presence.
You could only do this in a country like Spain which had a fascist dictatorship that allowed it and protected it from competition during it’s formative years.
We’re getting into questions of law that would have to be adjudicated if such a measure passed. Fines, even very high ones, are totally reasonable and legitimate under current law. The fine could be calibrated to equal the corporation’s assessed value… 🙂
The basic point is that when a corporation becomes essentially a habitual criminal it must be executed. So long as the execution takes place and the shareholders lose everything, where the money goes is secondary. My suggestion minimizes the suffering of the innocent.
An important part of the logic is that because they are 100% self-interested, corporations would almost never have such a penalty imposed. They would become ultra cautious. I’ll settle for that.
But someone is going to make a profit from the sale of corporate assets and it’s likely to be the people who were running them. Plus the shareholders are going to be pissed about losing their money when they did nothing wrong. Guess what they can’t do anything about the management in the corporations but they can do something about the politicians who wrote the law. So they will be blamed. They can fire them or if they’re really pissed they can put them underground. It’s much easier to identify them and get at them than they corporate people. It’s easy to take out a politician and I don’t mean for dinner and dancing.
I’ve been working for some time on the subject of thought forms as an important part of the world that secular society does not recognize. I want to recast Sam’s piece in a somewhat different but not contradictory frame, for the Golem is a creature of power. I am in no sense taking issue with Sam but suggesting an even larger framework within which to make sense of corporations.
Corporations are primarily institutions of power. They radically increase the resources people have to do things. Insofar as Power is a thought form, and I firmly think it is, big corporations will attract it as particularly vivid expressions of Power second only to certain kinds of government. (I distinguish between uncapitalized “power” as “the ability to make a difference” and capitalized “Power” as a thought form.)
Note that distant government likes big imposing buildings that make people look small. Then check out the designs of the corporate HQ of the really big corporations. Same impact, usually with considerably less beauty. These characteristics have nothing to do with why they were formed. It is a feature that emerges from their own internal relations. Exalting Power and making people feel small is a major feature in how Power manifests.
And of course they attract people to the top who are particularly comfortable with being at an apex of power, just like in certain governments. Perhaps that is why the revolving door from big corporations and banks to government and back again is so common. They are filled with Power junkies who lose more and more of their human qualities as they become more and more vehicles for Power.
But humans prey on a lot of shit so its fair something preys on them to even it out there overly predatory nature to conquer the world and them some
I like this article. I don’t have to agree with every bit of it, but it’s very thought provoking, and quite original, and I appreciate that.