Tuesday, July 19, 2011
Post No. 171: It’s Only Money
© 2011, the Institute for Applied Common Sense
Early this morning, we came across an article indicating that Rupert Murdoch’s aides “long tried to blunt [the] scandal over hacking.” How long? At least 4 years. They tried to save their financial derriere.
More than a year ago, at the time of the Gulf oil spill, we generated, Why Dumping on BP is a Bunch of BS. We argued that a corporate entity does not have a mind or a conscience like that of a human. They are legal fictions.
“Whereas a human will occasionally make a judgment call against his or her personal interests in pursuit of other goals (like unprotected sex with a stranger), rarely will a corporate entity do so because it is not really its money. It’s not even the money of the folks managing the company, at least in the case of a publicly traded corporation…. It is the money and interests of others, the shareholders, which are at risk, not that of the decision makers…. It makes for a unique dynamic.”
One of our regular readers, the Independent Cuss, argues that many U.S. corporations should be tried for treason, for having compromised our national security by taking jobs off shore. But he appears to be in a minority of one.
The reality is that our federal elected officials are beholden to, and feeding at, the corporate trough. That’s not going to change anytime soon. (On the other hand, a socialist country like Great Britain will do something in the criminal realm, and we wouldn’t want that.)
Consequently, an expectation on the part of anyone here in the U.S. that a corporation should do anything other than pursue its own selfish goal of improving its bottom line is a pipe dream. In fact, wouldn’t it be a conflict of interest for a corporate officer to do something adverse to the corporation’s financial interest?
We in Western, industrialized, representative democracies are confused right now. We can’t decide what we want out of corporations, somewhat akin to how we treat our spouses and kids.
There’s a whole bucket full of people who feel that corporations should be allowed to do whatever in the name of free market enterprise, and free of government interference.
There’s another bucket whose tenants claim that corporations should be allowed to do whatever to generate a profit and stay in business, no matter the amount of the profit.
And then there is the bucket whose occupants believe that profits should be “reasonable,” whatever that is.
Rebekah Brooks, formerly of News International, was arrested in Britain earlier this week, and may lose her liberty for quite some time. However, if money and the maximization of profit are the driving forces within a corporation, why should society’s sanctions spill over into the criminal realm? Aren’t civil lawsuits adequate to keep corporations, which step out of bounds, in check?
But, how is the pursuit of money or property, incapable of being attributable to what society deems a fair, responsible effort, any different than the acts of a common thief, or a con man, or a prostitute, or a host of other individuals whose financial pursuits we label criminal in nature?
Did this corporation actually engage in conduct which hurt people? If so, some argue they can file lawsuits. If there is merit to their claims, some attorney will take the case, won’t he or she? Or did the conduct shock our conscience? Does shock equal criminal? Is that how we distinguish between legitimate corporate conduct from the criminal exploits of non-corporate criminals?
If we slap corporations with fines, monetary judgments, and punitive damages, don’t they derivatively adversely affect innocent shareholders, who had nothing to do with, or say about, the offending conduct?
In addition to Ms. Brooks, Britain’s highest ranking police official resigned yesterday. This morning, we received an e-mail alert, “Tabloid Scandal a Fresh Threat to Cameron’s Survival,” Cameron being the British Prime Minister.
Stuff’s about to get real complicated over there; but not here. No corporate official’s liberty is at stake here in the U.S. Maybe this will prove to be a positive thing for America in that corporations will run to our shores to perform their financial magic without fear of criminal sanction. Hell, that’s better than a tax break. We’re more likely to throw our elected officials in jail.
After all, it’s only money. And to interfere with the generation of wealth will discourage entrepreneurs from pursuing vital commercial projects, which produce jobs. The folks arguably hurt are just collateral damage, like that experienced in the war on terror - just another risk management calculation in the corporate world.
The less enlightened and communist Chinese executed construction company officials whose buildings collapsed on school kids during their massive earthquake a couple of years ago, and essentially forced parents of the deceased kids to accept pensions as compensation and to stop complaining.
You see, it’s only money. Or, is it?
We don’t know where we are on this subject. Like many others, we’re confused.
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hile blog surfing earlier this evening, we ran across this link to a New York
ReplyDeleteTimes article about the table having turned on Rupert Murdoch. But do corporate leaders strive to be popular, or make money for their shareholders and companies? Do you think that the comeuppance is warranted?
'Spector,
ReplyDeleteWell, hell, if the bottom line and the shareholders' interests take precedence over national security, what American conventions and laws DON'T those interests trump?
Do you realize what sort of profits could be generated by allowing a corporate entity called Babyco to form and begin selling healthy infants worldwide on eBay? The returns would be astronomical -- same for Kidneyco and TeenageGirlco.
Personally, I think the descendants of all of the American slaveholders are owed reparations for the Federal government spoiling their agrarian indentured servant party via Abe Lincoln's issuance of the Emancipation Proclamation. Damned regulations . . .
Due to the Age of Taking Things Too Seriously in which we now live, I should point our that the foregoing satirical rant was generated to illustrate the slippery slope down which we embark when profits and shareholders' interests are elevated to a level above that of human rights, let alone national security and Constitutional authority. Where does the snowball stop once it is set to rolling downhill?
And just so we are clear, I am no admirer of Lincoln. The Emancipation was correct, but the tyranny he used to accomplish it had a lasting and catastrophic effect upon our U.S. Constitution -- and an entire involuntarily-repatriated U.S. region -- which persists to this day. As General Longstreet reportedly observed, "I wish that the Confederacy had freed the slaves, THEN fired on Fort Sumter. We would have held the moral high ground." Amen!
The Independent Cuss
We didn't say that the bottom line and the shareholders' interests should take precedence over national security, we were just suggesting that very few citizens seem to take that issue into consideration in evaluating the effect of job re-location by our native corporations.
ReplyDeleteYou may recall that we recommended Paul Kennedy's "The Rise and Fall of Great Powers: 1500-2000." One of the things that declining powers repeatedly do according to Kennedy is spend 50, 100, 200 years developing technology locally, only to ship it out to other countries who do not have to invest the time, energy, and research, and can then simply copy it. Technology is also tied to weaponry and armaments.
All of us sat and watched this occur over the past 35 or so years, and yet not enough of us exercised personal and collective responsibility to stop it. Even now, when more of us are aware of its detrimental consequences, we as people are not doing anything about it.
We realize that you do not think that individuals have much power to combat corporations in this world; we disagree. Individuals can collectively make enough noise to bring down major institutions. We don't mean "bitching" alone, but actually doing things, like boycotting products, or companies, etc.
Oh by the way, that's what distinguishes MLK from those who simply "bitch." Admittedly many historians suggest that he did not start or carry the movement, and that he was in the right place at the right time. But once he saw the opportunity, he organized and he marched, AND he spoke (not in a negative, complaining fashion, but with an inspirational tone) and, thank God to Bayard Rustin, on a higher moral level.
Fascinating. Would you recommend that we also do that "boycotting products" kind of thing in the voting booth? I mean, if we are unhappy with how government is doing its business?
ReplyDeleteOr is there a real difference today between government and business?
Calvin Coolidge said “the chief business of the American people is business.”
Aren't criminal laws sufficient to rein in businesses?
Oh, I just have so many questions...
I don't think that business should be given carte blanche and allowed to do as they please anymore than I would want to grant that right to any of my neighbors. I would say... craft laws wisely or not at all.
First of all Douglas, we have a copyright on the word "fascinating" and thus demand royalties when someone else uses it.:)
ReplyDeleteSecond, some would argue that voting is rarely effective in America, especially when there are only two parties. Not only that, very few people vote. We would suspect that if someone announced a boycott of the products of a particular company for a plausible reason, more people would boycott those products than people would vote.
Put that royalty on my tab, will you? And it is sad that of those who do vote, usually do it mindlessly.
ReplyDeleteDouglas,
ReplyDeleteWell-stated!
The Independent Cuss
"Most of us, especially in post-modern, industrialized countries, probably just live "ordinary lives."
ReplyDeleteI am a bit perplexed (and by "perplexed" I mean "amused") by your usage of term "industrialized". I would think that "post-industrial" -- or perhaps "subsumed" -- would better describe post-modern America. But of course I have herein allowed my hobby-horse to again run amok, and I shall return to the topic at hand.
I find it instructive that all four of your “martyr” definitions include the act of “suffering”. That interests me, because I do not equate the concept or act of “helping others” with “martyrdom”. While the terms are by no means mutually exclusive, they are by no means conjoined in a modern society. It took me a long time to understand this.
The trouser-wearing Sudanese woman who deliberately risked forty lashes to “make a statement” is surely a martyr; one who forsakes (for example) a successful law practice to focus on pro bono work is probably not engaging in martyrdom as he does not suffer by so doing (unless he has no other source of sustenance income, in which case he is screwed).
I don’t know why it is important to me to draw such a distinction; perhaps it is precisely because I would hope that your college-age readers might not confuse the two concepts as I did when I was young. I thought that doing good works for others was essentially martyrdom because it involved some degree of self-sacrifice. Moreover, it seemed that flying on South American relief missions, running for public office as an independent working-class candidate or simply challenging the status quo in any way was fast lane to waking up dead one morning (besides, it seemed to a young mind that it was “too much like work”). As it turned out, not doing such things was a good way for me to have never truly discovered what it means to live . . .
Very tired now . . . I hope all of this makes some sense.
The Independent Cuss
The United States may not be as industrialized as it once was, and may not have the rank that it once had; however, it is still considered to be amongst the ranks of industrialized countries.
ReplyDeletehttp://en.wikipedia.org/wiki/Industrialized_countries
'Spector,
ReplyDeleteTHIS is the submission which Disqus refused to post on the "Whose Life Is It Anyway?" thread, hence my consternation regarding "where it went". As you can tell, the balance of the post beyond the above-referenced tongue-in-cheek diatribe is totally out-of-context and irrelevant to this particular topic.
For the record, I am submitting this post to the “It’s Only Money” thread. I wonder where it will actually end up . . . or if it will appear at all.
The Independent Cuss