Thursday, May 20, 2010

Pierce the Corporate Veil.

I'm having a moment today where I'm concerned about the way American society views corporate entities.  I'm also concerned about this on a global scale, but I'm going to start more locally.

Basic Business School 101, Day 1: A corporation is created to aggregate the collective actions of individuals.  It is created in a way so as to have it's own identity separate from those individuals.  It is, by this definition, an individual actor in the legal, social, cultural, and political arenas.  It has rights that are conferred on itself as an entity, and it has responsibilities that go with those rights.

Some of this is about my thoughts that I'd take the discussion of Rights a lot more seriously if it were in conjunction with a discussion of Responsibilities.

A lot of argument takes place about what are the rights and responsibilities of a corporation.  Like people, a corporation generally acts in what it believes is its own best interest.  It is selfish.  By design, it is selfish.  Even corporations that are set up to serve a need, like a non-profit, is selfish in that it will behave in ways that will advance its agenda.

OK, I'm getting into an infinite loop here.  I need to back off and come at this again from another angle.

We have the natural individual entities of Humans which, as noted elsewhere, have certain inalienable rights that are among them Life, Liberty, and the Pursuit of Happiness.  Then, next to that, we have these artificial entities that also have rights.  The question is, how do the rights of the artificial entity compare to the rights of the Human.

I suggest that the Rights of the corporate entity are subservient to the rights of the Human.

I know that's going to get some of you all up in arms about various "-isms".  Fine.  But I challenge you to think this through with me.

The purpose of the corporation, as noted above, is to aggregate the efforts of individual humans for the purpose of achieving some goal in ways that are more efficient than individual efforts.  In this case, the Whole is greater than the sum of its Parts.  But that only relates to the efforts for which it was created.  Yes, I'm perfectly willing to stipulate that "Making a shitload of money" is a reasonable and legitimate reason for creating a corporate entity.

Here's the problem, though: By definition, this artificial entity has more societal mass than any individual, even a group of individuals.  Feel free to apply all the Classical Newtonian Physics to this concept.  The larger mass has more gravity.  The larger mass has more momentum.  The force of the larger mass has outgrown its boundaries of existence.

These artificial entities have usurped Rights to themselves that do not belong to them.  The Human must have Rights that supersede the Corporate.

Corporations are, by definition, Second-Class Citizens in our society and must be treated as such.  At the intersection of Human Rights and Corporate Rights, the Corporation has the Yield sign.

Now, again, before you start yelling various -isms at me, I am not at all calling for an end to corporate existence.  As noted above, the corporate entity exists in order to provide efficiency and improve the operation of the system.

Two things have happened that bother me greatly.  First, the Humans in this equation have gotten lazy about asserting their influence on the Corporate.  Second, the Corporate Veil has become the Corporate Steel Wall.

The corporate is a hivemind just like everything else.  It behaves in ways that further its goals.  But it's still the humans that make those decisions.  Those humans may or may not react to influence in their own personal lives.  But, share holders, leaders, managers, donors, external influences must take up their own Responsibilities if they want their own Rights protected.

Basically, if you don't like the way that a corporation is behaving, then it is your responsibility to say something about it.  Of course, the corporation has its own Right to do as it pleases.  The point is that the balance will be struck eventually.  Corporate Rights are subservient to Human Rights, but not Sublimated to them.  Find the balance.

On the other side, it has become far too easy for the individuals that make up the corporate entity to hide within it.  It is called the Corporate Veil.  I can take legal action against the corporation, but not against the people inside it.  I say that's gone too far.  People make the decisions, not the artificial entity.  Hold the individuals responsible.

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