The Tragedy of the Corporation

Corporations are a lot like politicians. Often they start with a good idea, or at least an idea, in the form of something to sell.. If that thing is a success the corporation becomes bigger. Soon the career – which in the corporation’s case means growth – overwhelms the good idea that started it. Wall Street clamors. Executives seek to justify their outlandish pay. The result is a grim battle to grab more, and then more, without end.

The problem is not bad people, though often they are not strong people. The problem is encoded into the institutional machinery. The modern corporation has no capacity to say “enough,” or to declare its job done. It always must find another job, and then another, to yield a return for the shareholders and justify its existence.


How Corporations Stymie Innovation

One of the pleasures of the Wall Street Journal is the way the reportorial accounts on the news pages often undercut the editorials. The market dogmatists of the latter apparently have the same regard for “reality-based” thinking that the White House does. Truth is what they want to be true — it’s their space after all — and the dynamics of innovation are a case in point.

One tenet of the market faith is that profit and property rights are crucial to innovation. Without them, no one will lift a finger and progress will grind to a halt. In some cases that might be so, up to a point. But the belief system flounders when one gets to social innovation – that is, the kind that occurs spontaneously in language, music, fashion, food, and even technology in many cultures. Then there’s the matter of figure skates.


Does Exxon Have a Birthright?

America is not the first entity to become a replica of the parent it rebelled against. Individuals fall into this trap, so why not groups of them called nations? In its path from colony to empire, though, the U.S, has played out a version of the drama that is uniquely its own, and that includes the role of privilege, especially the hereditary kind.

America set out to abolish hereditary privilege, as it existed in that day at least. Aristocracy was the mark of the parent — England — it so much wanted to cast aside. But slowly, new forms of aristocracy have crept back. For one thing there’s the class divide that the current Administration has done so much to widen. Its push to abolish the estate tax in particular would bring about exactly the conditions that Madison and Jefferson tried to prevent. Jefferson actually advocated a progressive land tax to counter large concentrations of wealth. “The earth is given as a common stock for man to labor and to live on,” he explained.


Corporations, Constructed Strictly

The President says he wants Supreme Court justices who will interpret the Constitution as it is written, not according to what they wish it says. It’s a good speech line, but I don’t think the President really means it.

People on the Left generally assume that “strict construction” is Right Wing code for overturning Roe v. Wade, environmental protections and the like. And indeed it is. But it’s also more. Ideologically the doctrine cuts both ways, because “judicial activism” has cut both ways. It was a blatant act of judicial activism, for example, that took the protections of the Bill of Rights, which Jefferson et al intended for real people, and extended them to artificial persons called corporations.


Book Review – The Divine Right of Capital by Marjorie Kelly

The Divine Right of Capital
by Marjorie Kelly
Berrett-Koehler Publishers, $24.95, 230 pages, 2001

It’s an old story: the child rebels against a parent and then turns out just like him or her. It can happen to a nation too, as Marjorie Kelly shows in her wonderful new book. The American colonists rejected Mother England and everything it stood for: aristocracy, special privilege, inherited wealth, the divine right of kings. Then they created a republic that—despite their best intentions—bred those very things, in the form of the modern corporation.

This is the back story in the Enron fiasco, the one the mainstream media won’t touch. Sure, we care about shareholders who lost their life savings. But what about the rest of us, our communities, and the planet? Kelly’s title is not facile populism. She means it. The modern corporation and its largest shareholders occupy a place in our society that royalty occupied in the one we supposedly cast off.


Is the Corporation Obsolete?

Colossus: How the Corporation Changed America Ed. Jack Betty
Book Review

Washington Monthly
July 1, 2001
By Jonathan Rowe

It is a sign of immersion that the thing immersed doesn’t notice. The fish, famously, is not aware of water. Dick Cheney and George W. Bush cannot see past their allegiance to the oil industry because it’s all they know–their water.

So it is with the corporation. Over the last century and a half, the corporation has become the dominant institution of American life, the “envelope of existence,” as one writer put it. It defines work, entertainment, politics, transportation, the way people think about their bodies and the world. Increasingly it dominates the cognitive environment of daily life. For all the kvetching about government, the corporation permeates our lives in much more basic ways.


Bad Company

If a council of wise elders were to recommend a design for the basic business organization of this age, the current form of corporation would not likely be their choice.

Today’s version of the corporation evolved about 150 years ago, at a time when space seemed vast and earth’s resources even vaster. The economic task was simple: cover the continent, exploit its resources, build a muscular industrial machine equal to those of Europe. It was simply to grow. Today the task is more complex. The habitat can no longer absorb all the effluents of our striving—nor, for that matter, can we. The noxious side effects of production often loom larger than the supposed benefits; the factory that employs hundreds may befoul the water that is used by millions.


Reinventing the Corporation

Corporations benefit from the public, so it is fitting that the public should expect something in return from business. The current climate of greed, cynicism and corruption is discussed, along with ways of holding business more accountable.

When an act of simple human decency appears heroic, it’s time to ask some basic questions about the culture in which that act takes place. That’s what happened last December in an old mill town in Massachusetts. AT&T had just announced it was laying off 40,000 workers, even though profits and executive pay were soaring. U.S. corporations had inflicted over three million such layoffs since 1989, and there was a depressing new litany on the evening news: jobs down, stock market up. (More recently, it’s been the equally revealing counterpart: jobs up, market down.) The new Republican Congress was giving these corporations the store. Yet the more they got, the less they seemed willing to give back in return.


Corporations and the Public Interest

When people talk about “the market” they usually confuse two totally different things. One is the enterprise economy of small-scale business. The other is the corporate economy of hulking bureaucratic institutions.

Most of us love markets in the former sense. We love farmers’ markets, flea markets, New York-style street fairs, and classified ads. When we go to Washington, DC, we generally don’t eat in government cafeterias. We head over to the neat little restaurants in DuPont Circle or Adams Morgan – a “market” experience. When I was in Warsaw not long after the fall of the communist regime, the new outdoor markets really did feel like seedlings breaking through the concrete.