“Corporations do not share our priorities. They are hive organisms constructed out of teeming workers who join or leave the collective: those who participate within it subordinate their goals to that of the collective, which pursues the three corporate objectives of growth, profitability, and pain avoidance. We are now living in a global state that has been structured for the benefit of non-human entities with non-human goals.”
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Yes. A stunningly accurate similie.
d fb
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Nope. Don’t agree. We see plenty of examples around us of the corporations being regarded as just as expendable as the proles, in service of the ambition of the CEO.
The local Detroit media has been giving saturation coverage of Bill Ford’s whine today. And, again, trotting out all the “damage” that is being done to the companies, their vendors, other “innocent people”, by the strike. The bottom line is, Mexican auto workers make about $100/week. USian workers will never be able to work for that little, but that won’t stop management from trying to push them down to that level, while the honcho’s pay soars higher and higher.
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Not only that but there is no real magic in “corporations.” Every one of them could be a sole proprietorship and be just as greedy and just as antithetical to society’s best interests (As Adam Smith & Karl Marx pointed out) as they are in corporate form.
And do workers simply subordinate their goals for the corporation’s? I mean I work there for money so I can meet my goals. That’s the whole purpose. I don’t care about their goals any more than they care about mine. Maybe that’s a finger of the Invisible Hand. Mind over matter. They don’t mind, I don’t matter but both of us somehow manage to get what we want. Or try to. The corp (work, a job) is just a tool One uses.
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FCorelli
Yes, you are fully correct.
I think we are screwed unless we remember that the entire modern idea of markets and large corporations primarily sprang from Adam Smith’s brilliant Wealth of Nations, but!, he also wrote what he and I think is a more important book called the Theory of Moral Sentiments, and it directly ties morality to human society as a whole. He saw his Wealth of Nations as a supportive adjunct to that earlier work.
Limited Liability, whether of individual proprietors or corporations, were legal inventions intended (along with all manner of other supports such as roads and policing and standard enforceable measures) to help the creation of wealth in service to the common good.
david fb
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The same idea was expressed in a piece in The Atlantic way back in 1998.
Every society needs some shared values to hold it together. Market values on their own cannot serve that purpose, because they reflect only what one market participant is willing to pay another in a free exchange. Markets reduce everything, including human beings (labor) and nature (land), to commodities. We can have a market economy but we cannot have a market society.
WTH
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Problem is, what we are being fed by the “thought leaders” is “traditional, straight, white, Christian, values”, that is, division.
Steve
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Corporations accurately reflect the priorities of the collective (both for profit and non-profit corps). They may not be YOUR priorities but they are the collective’s priorities - for better or worse.
Corporations accurately reflect the priorities of the collective (both for profit and non-profit corps). They may not be YOUR priorities but they are the collective’s priorities - for better or worse.
How did the actions of Enron accurately reflect the collective priorities of all of its employees?
How did the actions of Worldcom accurately reflect the collective priorities of all if its employees?
Any managed organization “manages” the flow of information and decision making to support the goals of those at the top, not the “collective.” By being in a position to disguise or fabricate information fed into internal decision making and external parties (regulators, investors), leaders have the ability to trick others into pursuing goals that may not be even understood much less shared by the serfs in the cubicles.
Working in a large corporate environment also makes it clear that a company – not the individuals working in it but the entity itself – can come to impose a larger vibe / direction to the company’s actions than the longevity of its individual leaders. Imagine a company that’s twenty five years old. Twenty years ago, an executive decided to organize the company in a certain way given available revenues and systems in use at the time that divided some responsibility between Department A and Department B.
The split may have made partial sense twenty years ago but the company has grown 300% since in revenue and employees and now that split is causing conflict and subterfuge between the leaders of those two departments. Yet the original leader who made that decision left fifteen years ago but no one has the sense of organization design to alter the org chart. New leaders show up, adjust to the situation at hand to get started, then forget they have the power to change it. Two rounds of leaders have come and gone in both of those departments but the conflict remains because the conflict is CAUSED by the structure of the organization, not by its current members.
Granted, the members of the organization should have the ability to change the org chart to eliminate the conflict but what if the current structure unduly rewards the execs at the top? Either with lavish pay and overstretched authority that builds their resume or an easy job that doesn’t demand much of them but doesn’t help the company much? There’s little incentive for them to change it.
There is a distinct cadre of “executive management” that simply drifts from company to company every 3-5 years, often getting pulled into a positioin because someone they know was pulled in to a position able to control their hiring. This nomadic tribe of Directors, VPs and sometimes above knows little about the current business or the specific company and its “culture” and unique challenges, and they don’t really care. As soon as their “sponsor” leaves or gets fired, they will go somewhere else so there’s not any point in getting involved in longstanding turf wars or trying to solve them.
This is not the way companies are supposed to operate according to Business School. It’s the way thousands of companies operate every day in the real world.
BTW, this is NOT an argument for applying the corporate death penalty for particularly aggregious fraud and criminality as a means of punishing EVERY employee. It IS an argument for the corporate death penalty as a means of eliminating this weird, zombie-like ability of the operating model of a company to outlast any of its leaders in ways that result in generations of corruption and harm to the public.
WTH
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The cult of the CEO has created an imperial “management” class, unaccountable to anyone.
Recall, the basis of the “Citizens United” decision is the notion, by the court, that the CEO is the spokesperson for the group of shareholders and employees. If that was so, then why is management’s response to shareholder proposals for disclosure of who they bribe, why they bribe, and how much they pay in bribes, always that their bribery activities are none of the shareholder’s business? The CEO is supposed to be the spokesman, but does the “speaking” with no informed consent by the people he is supposedly speaking for.
The Board is supposed to represent the interests of the shareholders, and police management. The reality is the Board is more concerned with the care and feeding of the CEO, than the concerns of the shareholders. I have commented before how Jessie Upchurch, long time Tandy Corp board member, started criticizing the performance of CEO John Roach. Instead of Roach being replaced, Upchurch was purged from the Board.
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The Borg is supposed to be, but remember the great philosopher (or his analog) Gene Roddenberry’s admonition: Resistance is futile.
Pete
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The employees are not the collective. The owners are.
The behavior of Enron most definitely reflected the priorities of Ken Lay. It also reflected the priorities of Alliance Capital and Janus Capital - two of the largest shareholders.
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Except that resistance wasn’t futile. The mantra was intended to make it easier on the powerful by trying to convince their enemies to fight less.
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The employees are not the collective. The owners are.
I sort of agree with that. In Business School World, owners or shareholders are supposed to be incented to protect / increase the net present value of the stock – over “infinity” technically but certainly tens of years. This should provide an incentive for each investor to perform due diligence to understand how the company operates, hires managers to act on their behalf, etc. to ensure no time bomb is being assembled that will destroy the company at some future point.
In Real World, investing has been abstracted and distorted into something that is more speculative than custodial. The average individual investor holds a stock for 5.5 months. The average mutual fund churns 20% of their portfolio per year, meaning they typically hold a stock position for five years before unloading it. Large investors are running statistical models against the company’s “official” GAAP numbers to look for signs of downward trends to trigger a dump of the stock. As Jack Welch demonstrated for over 20 years at GE, those GAAP numbers can be easily manipulated to provide the illusion of steady growth and profitability that do not exist.
The “average investor” – whether an individual or mutual fund – will suffer if a surprise melts the company down in days or weeks but that average investor’s short time horizon means the larger society cannot rely upon them to perform due diligence to keep a bad firm from creating vast harm to society over the long term.
WTH
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The USA is at an extreme in corporate and company management. As a quick refresher check this out
Codetermination in Germany - Wikipedia.
Known as Mitbestimmung , the modern law on codetermination is found principally in the Mitbestimmungsgesetz of 1976. The law allows workers to elect representatives (usually trade union representatives) for almost half of the supervisory board of directors. The legislation is separate from the main German company law Act for public companies, the Aktiengesetz . It applies to public and private companies, so long as there are over 2,000 employees. For companies with 500–2,000 employees, one third of the supervisory board must be elected.
Now, those labor guys did not stop VW and others from going over a cliff of irresponsibility in cheating and lying on ICE pollution, and so the problem of corporate power being anti-societal on a large scale is not solved regardless.
david fb
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The owners are not necessarily the “collective” either. Jessie Upchurch was Tandy’s largest shareholder, but he was pushed out of the Board, for challenging Roach’s running of the company. My experience says major shareholders are part of the “collective”, only as long as they agree with management’s priorities. An ounce of dissent will see them ignored, and their only remedy is to sell.
Steve
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You are implying that the CEOs are human?
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Are you referring to the raw, organic, structure, or some “wokie” notion of ethics?
Steve
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While I agree with most everything posted here I think there is a very important point being missed. Prior to the industrial revolution, most of the world lived in poverty. The growth of industries organized around the corporation concept in the 20th century changed that. Asia was a poverty stricken mess a century ago. Then they adopted the western corporate culture and now look at their living standards.
Gotta say that if I were to do an objective cost/benefit analysis of “corporatism” I think it would come out pretty positive.
You can get rid of corporatism, but what are you going to replace it with? What other system is going get people out of poverty and into the middle class? Mexicans will obviously benefit greatly from Tesla building its gigafactory in Mexico. Is there a better alternative?
Capitalism, embodied in limited liability entities and stock markets or their equivalent, when combined with rational thought, results in economic transformation and staggering growth, as any decent history book*** explains.
That is not the question. The question is how one manages/regulates the powerful components of capitalism so that the huge advantages are not undercut by ethical/social flaws and monstrosities that destroy the legitimacy of the institutions needed by any human society.
As I pointed out above, Germany and most other nations have a very different take on how to do the societal regulation and I do not see much downside EXCEPT, and even there only in the short term, for the (I think mal-perceived) interests of high management and investment groups.
The USA took over the world under the aegis from T. Roosevelt’s Squre Deal through to F. Roosevelt’s New Deal and after, much of the structure of which has now been largely trashed by our current Scooge Deal of decayed neo-liberal wreckage.
david fb
***E.g. David Christian’s Maps of Time
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