"If the purpose of each corporation is not primarily the health of the earth and well-being of all life thereon, if its principles are not based on equitable distribution of power and wealth, if it avoids responsibility for the sustenance of family, community. and place, if it has no belief system, or one devoid of ethical and moral content, it is difficult to see why it should have the sanction and protection of society through government." -- Dee Hock
|Dee Hock is now best known as the man who invented, founded and headed VISA, Inc. He hopes, however, that he will one day be remembered as the man who reinvented the corporation as a humane, sustainable and environmentally sensitive (read: unrecognizable) new entity. He truly believes many corporate executives will ultimately become his greatest allies in that enterprise, and he has set out to win their support. The following is a short excerpt from his remarkable blueprint for that effort, The Birth of the Chaordic Age. Also see his Chaordic Alliance's fascinating website at www.chaordic.org|
Black’s Law Dictionary tells us that a corporation is an “an artificial person or legal entity created by or under the authority of the laws of state or nation ....ordinarily consisting of an association of numerous individuals. Such entity ... is regarded in law as having a personality and existence distinct from that of its several members....vested with the capacity of continuous succession irrespective of changes in its membership, either in perpetuity or for a limited term of years” - et cetera. Mr. Black was obviously struggling, along with the rest of us, to make something understandable out of the mental abstraction called “corporation.”
Corporations as they were bear little resemblance to corporations as they are now. The original concept of corporation was a collective entity intended to attract people and resources needed to realize a desired social objective beyond the ability or resources of a single individual. It was created through the power of government authorized to exist as psuedoindividual with limited, carefully prescribed rights and obligations. It was to be chartered for a limited time, function in a limited area to realize a public purpose open to rigorous social and governmental surveillance. Its “natural” death in time was specified in the charter. Actions in excess of, or inadequate to the purpose, would be punished by social death through revocation of the charter.
The proliferation of the corporate concept of organization as a pseudoperson was great impetus in the sixteenth and seventeenth centuries by the huge, imperialist expansion of Western nation-states through subjugation of people on other continents. The increase in geographic scale, attendant risk, and capital that imperialist expansion required fueled the desire for limited personal liability and responsibility for risk, and for unlimited opportunity for gain. The corporate form of organization became a useful instrument for government plunder. It requires sound material, a good tool, a capable hand and, most important, a clear vision of things to come. It is not to be wondered that it soon had a tendency to become an instrument for private plunder as well. Pursuit of limitations of personal liability and unrestrained opportunity for gain became a conflagration burning ever hotter from the seventeenth century to present day.
In the United States, the first general for-profit corporation statute was enacted by New York State in 1811, with other states gradually following its lead. The corporation as a business mechanism came into prominence during and after the Civil War, again as an instrument of government for achieving its purpose in a time of great civil strife and expense.
The statutes covering such entities have been liberalized, broadened, and made more detailed in their provisions ever since, gradually moving away from the interests of government and society to the interests of monetary shareholders and management.
In the beginning, no one dreamed that a small aggregation of wealth and power legalized In the form of a pseudoperson to achieve a social purpose would not only be used in pursuit of the purpose, but to persistently grind away social and legislative mandates that defined corporate purpose, restricted its territory, controlled its growth, and curbed its behavior. But it did.
The for-profit, monetized shareholder form of corporation has demanded and received perpetual life. It has demanded and received the right to define its own purpose and act solely for self-defined self-interest. It has demanded and received release from the revocation of its charter for inept or antisocial acts. The roles of giant, transnational corporations and government have slowly reversed. Government is now more an instrument of such corporations than the corporations are instruments of government. They are no longer, not even indirectly, an instrument of the populace they affect, but an instrument of the few who control the ever increasing power and wealth they command. The inevitable tendency of wealth is to acquire power. The inevitable tendency of power is to protect wealth. The tendency of wealth and power combined is to acquire ever more wealth and power. The use of a commercial corporate form for the purpose of social good has become incidental.
The monetized commercial form of corporation has steadily become an instrument of those with surplus money (capital) and those with surplus power (management) to reward themselves at the expense of the community, the biosphere, and the many without surplus wealth or power, commonly called “consumers” and “human resources.” (Demeaning but revealing phrases.) “Human resources” are mined, smelted, shaped, made into products, worn out, and discarded with little more consideration on the part of monetary stockholders and management than they might give to a load of ore or a pile of lumber.
Nor is corporate power restricted to power over the employed. ‘global corporations now have implicit sovereignty over people throughout the world, since they are beyond the reach of any nation-state. They hold government and its instrumentalities to ransom for use of land, for reprieve from taxation, for access to natural resources far below cost, for direct monetary subsidization, and for use of land, air, and water as a repository for refuse; all by the simple expedient of bargaining one government against another for the claimed economic benefit of their presence. Global corporations are creating a market for government in which they are the sole buyer -- they can move their money, their operations, their products, and their management at will worldwide. No government can do so. No community can do so. Few individuals can do so.
Such corporations are gradually becoming superb instruments for the capitalization of gain and socialization of Cost. When a corporation rips from the earth irreplaceable energy or resources, no matter how much it pays for them, or any resources more rapidly than they can be replaced or at less than full replacement cost, it has socialized a cost and capitalized the gain. When it “downsizes” workers, abandons a community, or pays less than a living wage; when it creates and disposes of waste in the process of manufacturing or marketing a product, or at the end of its useful life; when it receives a subsidy, guarantee, or relief from taxation by government, it has socialized a cost and capitalized the gain.
When a corporation utilizes highways, railroads, airlines, postal departments, or other public infrastructure at less than their full cost; when it uses the military the CIA, or any other government instrumentality to protect its interests; when it diminishes topsoil, depletes the water table, or pollutes and poisons any biological system on which life depends, it has socialized a cost and capitalized the gain. When a corporation engages in unsound lending or currency speculation and looks to government, the World Bank, or the International Monetary Fund to bail out its customers, public or private, in order that they may repay their debt; when a corporation is awarded scarce portions of the electromagnetic spectrum to market its ideology and wares, it has socialized a cost and capitalized the gain. The possibilities for socializing cost and capitalizing gain are endless, as those who hold power or wealth within monetized corporations have discovered to their endless benefit.
This effect of this vast corporate socialization of cost and capitalization of gain is no longer limited to the current generation. Liability for the socialized cost is transferred to the unlived life of the young and to generations yet unborn through countless government guarantees, instruments of long-term debt, and depletion of natural resources that require centuries for regeneration. Interest is added to such debt and, when collected, paid to the same people who hold most shares in corporations, for it is their surplus wealth that is borrowed to fund government or private debt future generations must pay.
Round and round the merry-go-round, as fewer and fewer get richer and richer and ever more powerful, while more and more people fall into poverty and despair, and generations unborn are placed deeper in bondage to the appetites of the moment, The fascinating thing about the whole of it Is that there are no evil people who wish it so, or who have conspired to make it happen. All are victimized by a false metaphor, a wrong concept of organization, an internal model of reality that is flawed; a consciousness of reality neither whole nor wholesome. The excuses we give, receive, and too often believe ring hollow. “That some have is evidence that all may get.” “Power and wealth are the result of superior intelligence, effort, and ability.” “Poverty is the result of a lack of determination and character.” “That some rise from the bottom to the top is proof that all others could, if they had sufficient intelligence and will.” “There is fault at the bottom and virtue at the top.” “Unlimited pursuit of self-interest (the ‘invisible hand’) will result in the greatest good for all.” “A rising tide lifts all boats.”
When we trumpet the glories of monetary capitalism and praise the fiction of free markets while decrying the evils of socialism we are engaging in cant and hypocrisy. Clearly, we make love to socialism in the balance-sheet bedroom called cost, and make love to capitalism in the bedroom called gain. It is tearing the physical world apart and most of us as well. If the purpose of each corporation is not primarily the health of the earth and well-being of all life thereon, if its principles are not based on equitable distribution of power and wealth, if it avoids responsibility for the sustenance of family, community. and place, if it has no belief system, or one devoid of ethical and moral content, it is difficult to see why it should have the sanction and protection of society through government.
We know how monetized corporations were. We know how they are. We know what they are becoming, and it is not a happy prospect for the vast majority of people. It is far past time to examine how corporations ought to be. There can be no doubt that the people who control corporations should lead this odyssey in the most profound way. If they profess to be leaders, they should “go before and show the way.”