 The Idea:
We've already been told that corporations are psychopathic. There's
evidence they are also culturally dysfunctional, an inappropriate
construct to do what they were designed to do, or could do. But because
they're part of a complex system, there are no easy or imminent fixes.
Joel Bakan's book (and film, which will be shown on the CBC next week BTW) The Corporation, argues
that corporations have evolved into psychopathic entities. But their
reputation is not just one of anti-social behaviour. Corporations are
also seen by many as lumbering, inflexible, un-innovative creatures. I thought it might be worth exploring why this is so.
Recently I've been studying and writing about the difference between
complicated systems (those that lend themselves to cause-and-effect
analysis) and complex systems (where there are so many variables the
best you can do is look for meaningful patterns and correlations).
Corporations were initially designed as a 'shell' that would allow a
group of workers to collectively raise capital, add and delete members
easily, and, later, to protect workers who were associated with
partners who engaged in criminal, negligent or fraudulent activities
from liability for those partners' actions. The concept of
'shareholding' met these requirements. The interests of shareholders,
initially the workers in the organization, were subordinated to the
interests of creditors -- the worker-shareholders 'shared' what was
left after the corporation's debts were paid.
Several consequences of 'shareholdings' were probably unanticipated.
Some worker-shareholders could easily be given more shares than others,
to reflect a greater time or financial commitment to the enterprise.
And some workers, and even managers, could simply be treated as another
class of creditor -- paid a fixed return on their 'investment' of time
in the organization, but given no 'shares' in the profits at all. And
if some investors were willing to take the risks, they could be given
shares in return for a cash infusion in the company, even if they
played no active role in the corporation at all. And since they were
inessential to the operations of the company, why not allow these
passive shareholders to use these shares as collateral for loans, or
even trade their shares with others, creating a kind of 'stock market'
that would allow the rich gentry with lots of money they could afford
to lose, to gamble with each other on which of these passive
shareholdings would pay 'dividends' and which would be useful only as
wallpaper?
The rest, as they say, is history. Corporations are no longer run for
the well-being of their workers, but to maximize the profits paid to
their mostly-absentee shareholders. Many corporations have no workers
at all -- they are merely 'holding companies' that own shares of other
corporations. Shareholders feel no responsibility to the workers, the
people who generate the value of the shares, and whose wages are
increasingly unconnected to the value they produce, as the value is all
paid out to the shareholders.
What has emerged as a result is hierarchy. Managers are hired by the
shareholders to employ as few workers as possible and pay those workers
as little as possible, and to provide the fewest and most inexpensive
benefits and facilities possible, so that more of the profits are left
for the shareholders. Managers are therefore remunerated in inverse
proportion to the well-being of the workers and the communities in
which they live. Disparity between the well-being of workers and that
of shareholders grows without limit, with managers as the 'middle-men'
to ensure that this happens and to keep workers in line. The physical
slavery of early civilization, enforced by warlords and feudal fiefs,
is hence replaced by economic wage-slavery, enforced by management. Not
surprisingly, workers who might have otherwise been motivated to work
hard out of self-interest now seek ways to do the least work possible
for their wages, and counter the force of shareholders with their own
self-organized bodies, unions. The education system is enlisted to
convince workers not born into the privileged elite that if they work
hard they too can become managers, and the hierarchy is made more
multi-leveled to provide the illusion of 'progress' towards that goal.
If the corporation is large enough this fraud can be perpetrated almost
indefinitely, as workers spend a lifetime chasing the carrots up
increasingly steep (and increasingly handsomely rewarded) steps of the
ladder towards management. And some workers can even be given a token
number of shares in the company, to bamboozle them into believeing that
they are also real shareholders in the organization.
In each industry, the largest corporations, while still feigning
competitiveness, merge, acquire and otherwise band together in
oligopolies, acting in the best interests of shareholders to eliminate
real competition so that upstarts who share the rewards of their labour
more equitably with workers and with customers can gain no foothold in
the market. Advertising is introduced to provide the illusion of real
choice and competition.
As we all know, however, pyramid schemes are unsustainable, and this
one is no exception. Given enough time, workers begin to realize that
the cost of living is rising faster than their wages and that their
standard of living is actually falling while that of shareholders is
rising astronomically. Financial corporations, seeing an opportunity to
push the crumbling pyramid a bit further, start offering huge amounts
of credit to workers (using deceptive advertising to understate the
cost of this credit), so that workers can 'afford' to buy ever more of
the overpriced crap the corporations are producing. Corporations turn
to outsourcing and offshoring in the endless quest to reduce costs so
that shareholders' wealth can keep rising even though the market is
saturated and debt levels are sky-high. Governments and media are
bought by the now obscenely-wealthy shareholders and paid to parrot the
fraud and hype of 'free' trade, 'free' markets and globalization, to
even further deregulate, subsidize and undertax corporations, and to
pass laws so that that corporations cannot be sued by workers but
workers can be sued by corporations. If the growth stumbles, the stock
market, which is now a Ponzi scheme
that demands endless double-digit annual profit increases, will
collapse, taking the whole economic house of cards built up around it
with it.
The result is that today corporations are huge, anti-democratic,
unconcerned about (or even averse to) the well-being of employees and
the health of the environment, market-distorting and addicted to
growth. In short, they are culturally dysfunctional -- working at odds with the best interests of people.
Note that there was no conspiracy here, no master plan to make the
lowly medieval corporation designed to allow workers to raise capital
funds collectively into today's Frankenstein monster. It has been an
evolution, an emergence set in motion by unexpected consequences of the
creation of the useful concept of shareholdings, and then affected over
centuries by thousands of social, political, economic and cultural
events and behaviours, from divine right to the New Deal, from the
19th-century error in US law that gave American and then all
corporations the rights of personhood, to the end of physical slavery,
the dislocation of labour in the world wars, the emancipation of women
and the beginnings of the Two-Income Trap.
| In other words, cultural evolution is a complex
system, and to the extent it gives rise to dysfunctional entities like
the modern corporation we cannot expect simplistic solutions (e.g. "rein
in corporate power" and "put people before profit"), as desirable as such solutions
may look in theory, to work in the real world. The reason they won't
work is not because 'they' have all the money and power, it's because
we, the workers, as integral parts of the evolution that has given rise
(usually peacefully, with the worker massacres of the robber barons and Great Depression riots being notable exceptions) to the emergence of the modern corporation, are complicit in that evolution. It couldn't have happened without us. |
Complex systems, we learn from history, cannot be changed quickly or
simply. The anti-corporatist, anti-globalization movement has
demonstrated that. There is no panacea in legislation, new economy
movements, or rioting in the streets. The effects of complex systems
are not simply 'problems' that can be 'solved'. Only if and when enough
of us, as individual actors in this system, change our behaviours in
such a way that collectively we begin to change the dynamics of the
system, will those changes ripple through to the way corporations
behave and the impact they have on our lives and our well-being.
Barring a crisis on the scale of the Great Depression, those individual
behaviour changes are unlikely to come soon, to be coordinated or even
to be subject to coordinated effort. The end of slavery and the
emancipation of women and the approval of the Kyoto Accord (and, as I
described in yesterday's post, the end of capital punishment in Europe
and Canada but not in the US) were the emergents of millions of
unpredictable and individual changes in perception brought about by
millions of individual events.
There is good news and bad news here. The good news is that, while we are responsible
for the emergence of the modern dysfunctional corporation (and all the
other endemic social, political, environmental and economic ills of our
time and culture), we should not feel guilty about it. Organization and
activism are extremely unlikely to change these things, because they
are evolutions of complex systems, not simple cause-and-effect
'problems'. Just becoming aware of these things and understanding the
need for change and acting individually with modest changes in our
behaviour (mostly things readers of this blog have probably already
done) is really all you can do,
and the effect of us individually changing our behaviours could, in
time, precipitate positive change to the whole system. The whole of a
complex system is nothing more, or less, than the sum of the parts. You
just have to let go of the
illusion that anyone is (or even could be) in control and enjoy the
ride. If you'll pardon the mixed metaphor, when we reach the tipping
point, the earth will move.
The bad news is that it's futile to try to speed up the process.
There's a reason your instincts probably told you that getting out the
vote for Kerry was a worthwhile effort (it almost worked -- the tipping
point was close), but protesting against globalization was not. There's
a reason your instincts might have told you not to even bother voting
for Kerry -- when it's time, it's time. People change slowly. That's
our nature. Unfortunately, that means that with our impact on this
planet being so massive and accelerating at such a phenomenal rate, it
is increasingly unlikely that we can change direction quickly enough to
avert catastrophe.
So my new paradox is this: The more I learn about 'complex thinking'
the happier I am about just blogging and talking and spreading ideas
and information as my part to make the world a better place, and the
less guilt-ridden I am about not doing more to 'save the world' -- and
the less hopeful I am that it will save itself in time.
|
MADE IN CANADA
trust your
instincts 
