11/6/11

In support of Occupy ... Some thoughts on Corporations

We need to understand some things about corporations and put away some common misconceptions.

First and foremost, corporations are essentially amoral. The only imperative the that corporations follow is one that is common to all living things and that is the imperative to to survive and prosper.  They do whatever it takes to achieve these ends (survivability and prosperity).

It makes no sense to think of corporations (as many do) as being inherently good or evil.  This is why corporations require governance; something the even the government has had to acknowledge (ever heard of Sarbanes - Oxley?).

In some ways, corporations remind us of children. They have little knowledge of right and wrong, they are focused on immediate gratification (in the case of corporations this is increased profits) and they do not always behave appropriately in the pursuit of their gratification (this explains the behavior of the banks for example).

Another thing we have to realize is that they act in an environment that mandates continuous growth.  This sets up a system with no negative feedback and as such guarantees that things will run out of control.  It is like an ungoverned engine that continues to infinitely accelerate until it blows itself up.  Unfortunately, it is all to often that we the 99% are the ones who suffer negative effects of this.  How many of us have been laid off due to an acquisition? a bankruptcy? a retrenchment (downsizing)?

So how do we change this?  We need to realize that collectively we have allowed this situation to occur and that we now have a collective responsibility to provide guidance and control. We need to define what appropriate behavior is and make sure that the necessary mechanisms are in place to ensure that when corporations indulge in inappropriate behavior that their behavior is corrected (much like we would a child) and conversely, when a corporations engage in appropriate behavior they are rewarded.

So how do we define appropriate and inappropriate behavior?  When measuring behavior, one must have a criteria to gauge it against.  There are many criteria that could be used but I would suggest that we adopt criteria based upon the public good (I will define "public good" in a later post).  Behavior that adds to the public good is appropriate, behavior that detracts from the public good is in appropriate.

Ok what kinds of mechanisms do we put in place?  They should be one's that have a significant impact on the corporations.  All too often, things like fines and increased regulations simply become a cost of doing business and therefore are ineffective when it comes to modifying behavior.  What is needed are mechanism that affect the primary imperative that corporations recognize; survival and prosperity.

Some example mechanisms might be:
  • revocation of corporate charters
  • access to markets
  • mandatory independent oversight
  • <add your own here>
These should not be taken as a definitive list.  This list may be a suitable starting point and should be added and subtracted to as a result of ongoing future discussions.

We need to understand that we are advocating fundamental changes and that this will take time.  Time to determine what changes are necessary and how we will go about implementing them

In the meantime:

Viva the Occupation



1 comment:

  1. Hi Jim,

    I saw your post on Occupy Together that mentioned "If we just try to tweak the current systems we are doomed to fail as we have not addressed the fundamental flaws in the system." and "We need to discuss the this fundamental flaws and evolve approaches to address them."

    I'm a sustainability researcher in Atlanta and a systems engineer from Georgia Tech, so I fully agree with your suggestion. Perhaps this page will help us figure out how to address those fundamental flaws:
    http://www.thwink.org/sustain2/articles/016/CorporateDominanceLoop.htm

    If you prefer email to discuss, just look for Contact on the page.

    Thanks for such thoughtful thoughts!

    Jack Harich

    ReplyDelete

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