OPINION

Corporations Have Too Much Sway in America

Why do Corporations exist anyway?

Corporations are considered “persons” under the law, meaning they have the same “legal” rights and responsibilities as people (or do they?).

“Corporation” — From the Latin root “Corpus,” are defined as “persons united in a body for some purpose. People “incorporate” to become a corporation.”

“incorporate” — “The act of uniting several persons into one fiction called a corporation, in order that they may be no longer responsible…”

As such, today, corporations abuse those rights just like rich people do. To gain favor from the law by “funding heavily” the reelection of the politicians they need. In fact, Corporations openly solicit money from their employees to give to their funds for the reelection of whomever they are working with, in the government.

The question of what is the most precious resource for humanity was discussed in the post “Woo¹ Has Replaced Civic Duty,” where a quote by Russell Ackoff states:

Corporations know this truth, but their “Wall Street” Religion makes them blind to the truth about the line workers who get paid by the hour, live with basic benefits, and work to “schedules” (time) determined by those “above.”

In the paper “On The Purpose of the Corporation,” several concepts of their purpose are stated. However, they discovered:

“The Covid-19 pandemic has brought into sharp focus the inequality in our society that, in considerable measure, is attributable to maximizing shareholder value at the expense of employees and communities.”

Further, as explained in the Harvard Business Review Article, “Why do Companies Exist?” John Hagel III, John Seely Brown, and Lang Davison explain — “Companies exist to exploit the benefits of being big.” This is also part of the religion of the corporate culture.

“The bigger a company gets, the more experience it accumulates, and the more its performance–particularly cost performance–improves.”

But “WHO” accumulates this experience? The Corporation has no “brain.” People do.

Who tells people “pushing” the product out the door what to do? The “Salaried” chain of managers. This chain ultimately answers to the CEO, who answers to the “Board of Directors.” The “how” varies from corporation to corporation. Like people, they are all different.

Many times, the “how” is also determined by management (based on the product they make money from). The how then determines the skill set they need to “push” the product out the door.

Corporations Negotiate With Labor through Unions

Corporations with large numbers of “hourly” employees have management people who negotiate “Contracts” with variable duration of time. These contracts are based on “Good Faith.” However, “Executives” pay “Wall Street” first, themselves second, and “hourly employees last.”

The results are obvious. As, Heather Cox Richardson writes in Substack's September 22, 2023 post:

“Workers accepted major concessions in 2007, when it appeared that auto manufacturers would go under. They agreed to accept a two-tier pay system in which workers hired after 2007 would have lower pay and worse benefits than those hired before 2007. But then the industry recovered, and automakers’ profits skyrocketed: Ford, for example, made more than $10 billion in profits in 2022.

Automakers’ chief executive officers’ pay has soared — GM CEO Mary Barra made almost $29 million in 2022 — but workers’ wages and benefits have not. Barra, for example, makes 362 times the median GM employee’s paycheck, while autoworkers’ pay has fallen behind inflation by 19%.”

It describes exactly the philosophy of every large corporation in America. Do NOT pay well the people who work the most hours to deliver the goods on time to the market.

EXECUTIVES

If you are “high enough” in the chain of command. They get stock distributions (which makes them work to increase the value of the stock they earn), bonuses, and salary increases. At some level, “managers” get paid a “Salary,” and “high performance” managers, in good times, get a “Bonus.” These are the ones holding the whip (hire and fire) — of the hourly employees.

This describes the true belief in “efficiency.” Let the responsibility roll downhill with definite “controls.”

This is a basic description of what exists today. It is called a “Command and Control” style of management with a “product push” mentality. In other words, they get credit for getting the product out the door “on time.” This is what is thought of as “efficiency.”

The Annual Raise Pool

Each executive on the line gets a “raise pool” percentage of the profits for distribution below. They, in turn, do the same all the way down to the “line manager.” who probably gets no more than 4% to distribute among “his/her” people.

However, efficiency alone is not the chock-and-block of production. efficiency without value is nothing.

Value is provided by a product that is “effective.” One product as an example, is “Penicillin.” Its discovery marked a turning point in Human history.

Wikipedia: Ancient societies used moulds to treat infections, and in the following centuries many people observed the inhibition of bacterial growth by moulds. While working at St Mary’s Hospital in London in 1928, Scottish physician Alexander Fleming was the first to experimentally determine that a Penicillium mould secretes an antibacterial substance, which he named “penicillin.”

Wikipedia: In 1939, a team of scientists at the Sir William Dunn School of Pathology at the University of Oxford, led by Howard Florey that included Edward Abraham, Ernst Chain, Mary Ethel Florey, Norman Heatley and Margaret Jennings, began researching penicillin. They developed a method for cultivating the mould and extracting, purifying and storing penicillin.

In 1964, Ronald Hare took up the challenge of finding out the last variable that enhances the mold to grow properly on a plate containing staphylococci colonies. Two years later, Hare was able to duplicate Fleming’s results. Penicillin because of this, Penicillin saved many lives during WWII. the process became “effective” in 1966 when the actual process of isolating penicillin was found to be the variable of temperature.

Today, those efforts are run by huge drug corporations that “own” the various markets of drugs. Things have changed. All in the name of the Corporation getting rich. They are sold on the religion of efficiency.

Example of EFFICIENCY

This religious limit of legitimacy was clearly pushed through by the creation of the highly addictive drug “OxyContin” by Purdue Pharma (read, “The history of OxyContin, told through unsealed Purdue documents”).

Books could be written about this “Corporate” experience, and movies will be made. So far, Netflix has a streaming series called “Painkiller.”

The LAW was violated, but the question remains: WHO goes to JAIL? According to our justice system, “somebody” has to go to jail. Who has gone to jail?

No-body so far — We cannot put a “Corporation” in Jail (it is a fiction of our imagination). The Justice system is now totally entangled in “how to deal with this issue.” the “Law trail goes all the way to the SCOTUS, who has stopped all proceedings (as of August 2023) to determine “what is fair.”

ALL CORPORATIONS SUFFER FROM THE “EXPERIENCE CURVE EFFECTS.”

A good summary of the (ECE) — “is about the fall in costs with increased experience in production.”

Please note the word — EFFECTS” Effectiveness is neither known in management, corporate, or government. It is not thought of as having anything to do with “efficiency.”

Who is “hands-on in production?” — hourly wage employees (time) Who has to be “effective” in their job? — hourly wage employees (time)

Why does management not even think about effectiveness? Because they truly believe they pay “top dollars” for “skill.” In the case of Purdue Pharma, the problem of how to produce the illegal drug and pass it as “legal” was given to the (very well-educated) researchers in their labs, with a lot of pressure directly from the CEO.

EFFECTIVENESS of the Corporation and its relationship with EFFICIENCY never enters into the equation of ANYONE in management. In the case of Purdue Pharma, the Corporation was totally “INEFFECTIVE” and criminal.

Put another way, “efficiency is a matter of doing things right; effectiveness is a matter of doing the right thing.” Effectiveness = Efficiency * Value (assuming integrity is the rule) — Russell Ackoff

The Fair Thing to Do

For this reason, if the corporation's corpus dilecti is guilty, it needs to be sentenced to death (eliminate the corrupt body). Eliminate the corporation, fine all those who got rich from it, get every collectible penny back, and give the entire amount for distribution to the innocent who suffered and suffer today.

We all die at some time. Why not Corporations? Why is “Wall Street” the only entity that can kill them? It is a fit punishment for an entity that requires “an injection of Lethal Integrity for all involved.”

PEOPLE HAVE MORE RIGHTS!

IF CORPORATIONS ARE TO CONTINUE TO EXIST, MANY CHANGES ARE REQUIRED; THIS IS ONE OF THEM IF WE ARE TO TRUST THEM.

Today, we are in the midst of change. The “Production Line” is going digital. Robots are replacing “Monuments (immovable machines operated by skilled labor).”

That brings up the question, “What is the Obligation of the Corporation” to Society when it comes to this change?

THE END