Corporate Power

Essential articles for midterm intellectual relief

Monday, October 17th, 2005

Blood, Sweat and Tears: Asia’s Poor Build US Bases in Iraq

Still Separate, Still Unequal: America’s Educational Apartheid

Also, got the flyers made up for the screening of American Jobs I’ll be showing at NYU next Tuesday. Hopefully we’ll have a nice debate about outsourcing afterwards. (God knows we need one.)

Can’t wait to finish work so I can go home and watch the latest Bill Maher, which SageTV has graciously recorded for me.

Quotations through Corporate History

Thursday, October 13th, 2005

I had this posted on my Facebook profile for awhile, but figured it deserved to show up here.

This is an interesting collection of quotations I collected from various websites by searching for specific terms related to corporations.

I think through these quotations, you get a sense that our problem today had planted its seeds about two centuries ago, and has only grown into a bigger problem over an evolutionary path. That doesn’t mean we should fight it with any less vigor, however.

“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.”
Thomas Jefferson, 1814

“We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. . . . but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
Abraham Lincoln, 1864

“Great corporations exist only because they are created and safeguarded by our institutions; and it is our right and our duty to see that they work in harmony with these institutions. . . . The first requisite is knowledge, full and complete; knowledge which may be made public to the world.”
Theodore Roosevelt, 1901

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”
Franklin D. Roosevelt, 1933

“The institution that most changes our lives we least understand or, more correctly, seek most elaborately to misunderstand. That is the modern corporation. Week by week, month by month, year by year, it exercises a greater influence on our livelihood and the way we live than unions, universities, politicians, the government.”
John Kenneth Galbraith, 1977

“I’m not going to apologize for all this — that’s the free-market system.”
Al ‘Chainsaw’ Dunlap, after firing 11,200 Scott Paper workers, 1996

Indeed it is, Al. Quite a “free market.”

John Ralston Saul on Lou Dobbs: Globalism is Dead?

Thursday, October 6th, 2005

I posted this DivX clip of John Ralston Saul being interviewed on Lou Dobbs. The segment is called, “Globalism is Dead.” You really must watch this, even though it’s a 33MB download (if you’re at NYU, it’ll be a LAN download):

Click here to download the clip.

Also, I realized that this post raises an issue: what is “fair use” in video clips off news programs? Am I violating copyright law posting this clip? I always think about how I wouldn’t hesitate to post a link to an interview written in the NYTimes, or even to post a few paragraphs of such an article on my blog reprinted with a citation. But since this is video, and news networks try to place arbitrary value on their video content, it seems like I’d be violating copyright law.

Anyway, if anyone from CNN & co. is reading this and really wants me to take it down, I will. But I expect a nice explanation of why, legally, I’m obliged to do so, and I will reprint any demand to take down the video on this website.

Lobbying Against America

Monday, October 3rd, 2005

Lou Dobbs has a great article about lobbying and campaign finance reform. I guess someone’s still talking about what I consider to be the number one political issue of the day.

Check it out.

Interference in the “free market” is always bad?

Monday, September 12th, 2005

A great little exchange on the second-to-last Bill Maher show about global warming:

MAHER: Doc, let me ask – let me ask you this. This administration loves to pretend that there is a debate going on about scientific issues, because, really they’re a bunch of Jesus Freaks, quite frankly. So they pretend that people are debating, or scientists are debating, about evolution, when I don’t think they are. They certainly pretend that there’s a debate about global warming. Now, you’re a scientist. You hang out with scientists. Even when you guys are drunk, when there’s no cameras around, have you ever heard another scientist say he doesn’t think global warming is happening?

SCHNEIDER: I’ve heard a few, but the vast, vast majority believe not only that global warming is occurring and that we’re about a degree Fahrenheit in the planet warmer than we were a century ago, but the vast majority of those who know something about it believe that at least half of that in the last 30-40 years is due to our using the atmosphere as an un-priced sewer to dump our tailpipe and our smokestack wastes. And every time we try to talk about getting a tax on those emissions, they tell us it’s an interference in the free market, as if, somehow, we should get our garbage collected for free.

How true. Interference in the free market, beh. Well, guess what, economists? The free market doesn’t realize that the environment isn’t an infinite resource, and our generation and the few afterward will pay for that oversight.

Corporate Pork in the Age of “Homeland Security”

Tuesday, August 23rd, 2005

As reported on most major news stations, Air America, and Slashdot, Lockheed Martin was awarded a big $212 million contract to install thousands of cameras in NYC’s subway system and a wireless network which, incidentally, will not work in moving cars. I don’t know whether the cameras themselves will actually work in the cars (it seems to me if one seems a technical hurdle than the other will as well), but that remains to be seen.

I know this almost goes without saying, but this is really a waste of taxpayer dollars. People will say this is a good step, that anything goes to make them feel safer, but in the end, we have to think about the facts.

9/11 didn’t happen because of a failure of security or intelligence. It happened because of a failure of imagination. We’ve said this time and time again, but perhaps now we’re forgetting just how surprised we were that terrorists decided to hijack our airplanes and fly them into our buildings while we were worrying about trucks full of explosives being driven into the underground parking garage.

People have worried about subways being a terrorist target for years, even before 9/11. Therefore, it’s quite likely they won’t be a target. It will more likely be an unattended package in Times Square, where it’s crowded and relatively light on security, or a smuggled package into Carnegie Hall, where the well-to-do nature of the crowd makes no one suspect anything, or any other number of possible things that are completely not obvious. Because protecting against a terrorist is ultimately futile, because smart ones will obviously choose means that you didn’t think of, then why take these measures at all?

Well, one reason is because people in public policy feel this pressure to do something, so that when something does happen, they won’t be fired on the grounds of taking no steps to counter terrorism. Then, we hand $200 million dollars over to a corporation that already lives and breathes on our taxpayer dollars for fighter jets and missiles, and we never look back.

In return for this false sense of safety, we get other hidden harms. Invasion of privacy? Check. Feeling like you live in a police state? Check. $200 million dollars we could have spent on health care, education, or retirement benefits? Check.

How about when the new “anti-terrorism” cameras start being used to spot young black kids who might be carrying marijuana, so we can lock them up? Are there legal exemptions in this system if, when approaching a person for suspection as a potential terrorist, finding a bit of marijuana isn’t admissable as evidence against this person? I doubt it. It’s probably just like the cameras in the parks around New York; installed, supposedly, to prevent rape, but used most often to bust drug deals.

My other concern is much more practical. These cameras won’t work. I heard the woman who sponsored the project for the MTA saying the purpose was to be able to find a suspicious package, identify it, and dispatch bomb sniffing dogs to “take care of the situation.”

You must be kidding, right?

First of all, whoever will be manning the camera stations, if they are anything like the luggage screeners in the airports, I very much doubt they will notice “suspicious packages” when we need them to. Second, following the trends of most modern terrorists, you’ll be looking at a suspicious bag at the West 4th Street station, while a young man wearing a backpack suddenly explodes.

What if the coordinated terrorists decide to drop “suspicious packages” all over most of the subways in Manhattan, at about the same time. 30 suspicious packages across New York. They’ll only actually blow up 10 of them, but you’ll be spread so thin by that point that you won’t even know how to respond.

Do you see what I’m getting at? How futile is this stuff? I know it’s hard to accept, I know it’s cold and maybe downright mean, and you may be saying, “Andrew, you’re full of shit, you don’t understand this at all,” but this is what I say to all this spending:

Fuck it. Fuck it all. Don’t spend a god-damn dime on pre-empting a terrorist attack.

Spend it, instead, on providing health care for sick Americans. Making sure the unemployed get employed so they don’t turn to crime. Focusing on education in poor neighborhoods where crime is common. In the end, you spend $200 million dollars in any of those, and you’ll probably save a few hundred lives every year, and at least we can measure it, and at least I don’t have to sacrifice my civil liberties for it.

In this country, we spend over $400 billion on defense. That’s more than our combined spending for Education, Housing, Justice, Housing Assistance, Environment, Employment, Science/space and Transportion, among other things. And it’s not just slightly more; it’s $100 billion more.

Gangs of America: The History of Corporate Power

Friday, August 19th, 2005

I am totally engrossed in this book at the moment. My Dad gave it to me to read, and I flew through about 100 pages today while allowing the aforementioned backup processes to run.

Among other such gems you discover in this book are these facts:

  • The Boston Tea Party wasn’t so much about taxation without representation or hatred for the British crown as it was about anticorporatism. Colonialists were worried about the East Indies Trade Company moving into the colonies and taking their business. Colonists used to see “globalization” for what it was even back then, calling the East Indies Trade Company a vile institution which “enslaves one half of the human race to enrich the other half.”
  • The founding fathers were thoroughly against the idea of the corporation, and thought that large monied enterprises were the greatest threat to democracy, as they could subvert the political system if they were not placed in check.
  • Even Abraham Lincoln and Thomas Jefferson saw these threats, and they were themselves supported by Adam Smith, the economist whose theories are nowadays oft-used in justifying corporate existence.
  • During the days of robber barons, one man essentially created the modern corporation by lobbying the government for the right to intercompany ownership, namely one corporation owning stock in another. Through this law, he established “holding companies,” whose only purpose was to hold stock in other companies. And via holding companies, he was able to take over other corporations and place his corporations outside of any regulation by the state governments. Furthermore, this same man whose foresight gave him great wealth, also provides a nice historical example of corporate greed that is unchecked by government power: he managed to buy up newspapers to fire editors who didn’t print what he liked, and he managed to buy politicians by offering them posts on the board of his major corporate entities.
  • Corporations were not always this way. Corporations do not have to be separate legal entities, completely unaccountable to any of its investors, able to integrate across industries by gobbling up other corporations, able to subvert democracy through political contributions, and able to ruin people’s lives through “externalities.” Once upon a time, American society and American government knew corporations were dangerous, and knew they needed to be carefully monitored and controlled. What happened?

I hope this book answers that last question.

Corporations, Morality, and the Bottom Line

Monday, November 22nd, 2004

Here’s a discussion I got into on /. today. This is the post I responded to.

quote:

they are legally required to put profits for their shareholders above all other considerations

No. You’re wrong. Why do so many people think this? They are responsible to their shareholders in that they cannot willfully or illegally lose their shareholders money. They do no have to forsake their values.


No, you’re naive. The basic naivete comes from your language, in fact. “They do not have to forsake their values.” Sure, they don’t. But there’s a _lot_ of pressure to do so.

Do you really believe people think this because they are whacky? Take a look at this passage from an article from the Harvard Business School:

Generating corporate virtue

By now, the story of Malden Mills and its owner, Aaron Feuerstein, is so familiar that the company name has become a sort of shorthand for corporate benevolence. The tale briefly told: In 1995, a fire destroyed Malden Mills’ textile plant in Lawrence, an economically depressed town in northeastern Massachusetts. With an insurance settlement of close to $300 million in hand, Feuerstein could have, for example, moved operations to a country with a lower wage base, or he could have retired. Instead, he rebuilt in Lawrence and continued to pay his employees while the new plant was under construction.

“Why don’t more companies act that way?” is a common reaction when people first hear the story. It is much too simplistic to reply that Feuerstein is a better person than most. Whatever Feuerstein’s relative level of virtue, he had far fewer shareholders to answer to than the average CEO. Feuerstein’s only shareholders are himself and several members of his family, who presumably share his willingness to sacrifice profits for the sake of the employees’ wellbeing. (Feuerstein was perhaps too willing�Malden Mills filed for bankruptcy protection last November.) The typical CEO of a publicly held corporation, by contrast, is accountable to thousands of shareholders.

My purpose here is not to denigrate the share-owned corporation, which is a fundamental building block of democratic capitalism, but to acknowledge that its legal structure imposes certain priorities on its senior leaders. If they fail to maximize earnings for shareholders, managers risk removal by the equity holders to whom they report. Worse, failure to serve shareholders’ interests puts the corporation in jeopardy of being acquired by a stronger company or losing access to capital markets. In theory at least, self-interest and self-preservation ensure that no rational executive will engage in activities that clearly erode shareholder value.

To which he responded:

quote:

At no point did you refute that it is legal to do so, you just said that there are pressures.

Of course there are pressures to gain shareholder value! That’s blatantly obvious.

The act of going public means that you give up control over your company. At any moment when the shareholders think someone else can do a better job of making them money, they kick you out, along with your executive-size salary.

The bottom line is this: you can only be charitable and giving with your OWN MONEY. You can’t donate all the shareholder’s money to your pet cause without expecting them to get a new board.

So, if you want to be a charitable business, simply keep the business private, and don’t make an IPO. Make sure any investors are in agreement with your values. I am my business, and I occasionally give my money to the PostgreSQL project (and other projects to a lesser extent).


And I responded:

I know this thread is dead already, but I just had to respond to this absurdity.

The bottom line is this: you can only be charitable and giving with your OWN MONEY. You can’t donate all the shareholder’s money to your pet cause without expecting them to get a new board.

We are talking about a corporation being morally and socially responsible. That does not mean the corporation has to “donate shareholder money,” although from the sound of it, you hold the typical (and stupid) business mentality that you can just “throw money at things” to solve problems. What I and most people who worry about this stuff are talking about are the actions the corporation takes. Will the corporation’s manufacturing practice adversely affect the environment of the surrounding community? Will closing down a factory in a small town where the company was born, only in order to move to cheaper overseas markets and save some cash, ruin the economy of that town? Is the corporation treating its employees with dignity and respect?

I’m not saying CEO Joe Schmo has to donate his shareholder’s money to Make-a-Wish. I’m saying when he makes decisions, he has to think about things OTHER than the bottom line. And that, increasingly, isn’t the case. CEOs feel pressure from their shareholders due to the legal structure of corporations, which allows a group of shareholders to remove a CEO at the slightest performance dip (when earnings go flat). And a CEO has to worry so much about keeping his own job that he doesn’t let moral and social concerns enter into his corporate decision-making.

Yes, you’re really, really naive.

The Divine Right of Capital

Friday, November 12th, 2004

Finally got to read the introduction to this book that I’ve had on my shelf for months. (Check it out Amazon.com.) Makes a very strong case for shareholder-controlled corporations, as they are structured now, being much more aristocratic than democratic. Combine this with Chomsky’s view (whose gist is, though we may have a democratic government, we have a purely fascist structure in our businesses, with top-down control, employees are just “human resources,” etc.), and you start to see why letting corporations run the show isn’t such a great idea.

By the way, if you haven’t, please, please, please see: The Corporation.

On the economic “benefits” of globalization

Tuesday, October 12th, 2004

I don’t normally watch The West Wing, but I watched a couple of episodes last night with Olivia. One of them had as a subplot the concern that a tech company was moving 17,000 programmer jobs to India, and a union organization wanted answers from the administration. The initial tone of the episode seems to speak to the concern of the workers, but the “ending moral” is that you can’t please everyone, and that globalization is ultimately “bad in the short-term but good in the long-term.”

I’m not sure if that’s the viewpoint of Aaron Sorkin, or if he simply wanted that viewpoint to show up in his show. But by hearing people talk about globalization so casually, I came to a very vivid realization. When people say, “Yes, 17,000 jobs are lost here, but it’s still good for our economy,” we don’t even realize what that person means when he or she says, “our economy.” Everyone has this different concept of the economy, and what exactly it is. For example, if I were to ask a bunch of people, even bunch of economists, what the economy is, would I get the same answer from each of them? Probably not.

Now, if we go down to the individual level, asking one of those programmers whose jobs was offshored what his economy is like, he would probably respond that his economy is quite shitty. And if we went to a community like Silicon Valley, from where the jobs were offshored, most people would say that the people of Silicon Valley are experiencing a rough economy.

But who is actually benefiting from the offshored jobs? Some people say “the corporation benefits,” but that too is an abstraction. The corporation was comprised of those 17,000 jobs (and others), so how could it possibly benefit if those jobs are gone? Definitely it doesn’t seem the corporation benefited from the relocation of 17,000 skilled workers. Do other workers benefit from the relocation of those workers? Probably not, as it creates team fragmentation, lowers morale, etc. So who benefits? Who?

Shareholders.

When people say “the economy gets better in the long-term,” what they mean is that shares of stock for shareholders goes up over time, and the stock market, as a whole, goes up. And shareholders are nothing more then the a privileged class, an elite, of America. So why do we let our economic future (the economic future of the workers) be decided by their wants and needs of the already-privileged shareholders? Why should I accept that 17,000 American jobs lost is worth the 2% increase in share price? And why do we implicitly accept this in our use of language surrounding the “national economy”?