Observing corporate misdeeds, we regard them as aberrations, rare occurrences to be addressed individually. We assume its like people: most are honest, law-abiding, god-fearing, where evildoers are deviations from the norm.

This is incorrect. The nature of corporations is to acquire money by any means available. Pressure to profit persists and increases as the company grows.

It is thus inevitable that large corporations will eventually engage in behavior harmful to the community. They will break laws, sometimes even performing acts which if committed by a person would result in fines, jail, or even execution. Corporations also use money to cause laws and regulations to be changed in their favor, frequently to the detriment of the health and safety of citizens.

Don’t be fooled by corporate charitable donations, claims of being green or declarations of corporate principles. Money is always the determining factor. Among humans, serious crimes are committed only by a small fraction of the population and are considered outliers. Among corporations, serious crimes are the inevitable result of their intrinsic nature.

This proliferation of corporate crimes is in the public record. See for yourself with this amusing exercise. Do a web search for the Fortune Magazine list of “America’s 500 largest corporations”. This list has been published yearly since 1955. Pick any company on the list. Do a search for the company name along with the word “crimes”. There you will likely discover multiple infractions committed by your chosen company. You will find that some corporations have very long RAP sheets. Want to see more? Knock yourself out at corporatecrimereporter.com

REPEAT OFFENDERS

In 1994, California enacted the Habitual Offender Law for individual citizen lawbreakers, better known as Three-Strikes. After being convicted of three serious or violent felonies, the individual is automatically handed a severe penalty — typically 25-years to life in prison.

Other states have enacted similar laws, but there is no corresponding law for big companies. For corporations, there is no three-strikes law. There is no 10 or 20 strikes law. There is no 50 or 100 strikes law. They can commit serious crimes, receive a penalty equivalent to what an individual might receive for jaywalking, and repeat till the sun grows cold.

That corporations are habitual offenders was observed in the mid-20th century by the sociologist Edwin H. Sutherland, president of both the American Sociological Society and the Sociological Research Association. Sutherland co-authored “Principles of Criminology” (1939), which became a standard text on the subject.

He later changed his focus from crimes committed by individuals for their own sake, to crimes committed for the sake of an employer.

Sutherland coined the term “white-collar criminal”, and published “White Collar Crime” in 1949. He included names of individual companies (lots of them) who had multiple convictions. The publisher refused to include the names, thus the first edition was abridged, with names removed. Later, in 1985, Yale University Press published “White Collar Crime — the Uncut Version” with names restored.

Imagine the shock of walking into the post office and discovering that the folks on the FBI most-wanted poster have the familiar faces of your high school classmates. You will have a similar experience with this book.

Sutherland describes how corporate misbehavior is not accidental or occasional. It is well planned:

Three aspects of the rationality of the corporation in relation to illegal behavior may be mentioned. First, the corporation selects crimes which involve the smallest danger of detection and identification and against which victims are least likely to fight. . . . A second aspect of corporate rationality in relation to crime is the selection of crimes on which proof is difficult. . . . Third the rational corporation adopts a policy of “fixing” cases.,. since it is always possible to find a weak link in the chain of persons necessary for a conviction. (1983 edition, pp 236, 238)

INCREASING PENALTIES

Infractions are typically punished by easily paid fines. Companies regard them as minor business expenses, kind of like copy paper or light bulbs. Punishment would be more effective if it resembled punishment of humans.

Severity would then increase with the frequency and seriousness of violations. For individuals, there are infractions, misdemeanors and felonies. Punishments range from small fines to big ones, from short periods in jail to long ones, to death. Everyone understands and accepts these parallel escalating scales of violation and punishment. But somehow, recidivist corporations have escaped such treatment. A similar range of punishments for corporate violators might look like this:

— Fines, small to large, as above. In the case of serious corporate crimes, only fines large enough to hurt, and thereby change the company’s risk / reward calculation, will be enough to affect behavior. Therefore, for the largest corporations and the most serious violations, fines will be billions or tens of billions of dollars. Maybe more. — Jail. Doesn’t apply directly to corporations, but employees can be punished for their illegal behavior undertaken on behalf of the company. This especially applies to executives typically given soft treatment by the legal system. Contrast this with the Savings-and-Loan scandal of the 1980’s when hundreds of executives were jailed for bank fraud. Ah! The old days.

— Restrictions on doing business in certain areas. If it appears that less severe punishments are insufficient to restrain a company from violating the law in certain areas of business, then the company could be prohibited from continuing business in those areas.

— Divestiture. The company is required to sell off specified production units or divisions.

— Execution. Sometimes a corporation’s behavior is so bad that it must be forced to halt operations. This is the corporate death penalty. This sends a message to the whole industry — the abrupt disappearance of a one of their number will get their attention.

THREATS OF PUNISHMENT

Threats are effective if corps believe detection and punishment are likely.

In the personal individual human decision-making process, emotion frequently overrides logic, resulting in some pretty bad decisions, harmful to the decider and others.

In contrast, corporate decision-making is undertaken with the bottom- line clearly in view. Cold logic is usually applied. This doesn’t mean corporations can’t make stupid mistakes. They do so frequently. But corporations are capable of making rational cost / benefit calculations.

If we increase the likelihood that wrongdoing will be detected and punishment applied, then fear will curtail bad behavior. Corporate C/B calculations will continue but the changed parameters will net different results.

WHAT TO DO NEXT

Changes in the law as described above are somewhere between unlikely and impossible as long as corporations enjoy corporate personhood. This will change, however, with passage of the We The People Amendment, now gaining support in Congress. Once passed, corporate personhood will officially disappear, thus allowing common sense regulation of these huge organizations who now wield way too much power and influence. See movetoamend.org to read all about it.

The post The Devil Made Me Do It appeared first on The DNA of Corporations.

You bet I’m laughing at you. My friends too. And not just at you, but all your clueless contemporaries. It’s not just regular laughing either. It’s hysterical, cackling, borderline psychotic laughing. Unfortunately, you have little recourse, since we are laughing at you from 100 years in the future. Sorry.

Why such amusement? It’s because you people all thought you had to carry 4000 pounds of steel with you wherever you went. Don’t give me that puzzled look. It can be only one thing. It’s your car.

As the disruptive technology of the day, cars quickly replaced horses in the early 20th century. Since then, over two billion cars have been manufactured, worldwide.

The auto and oil industries thus had plenty of cash for lobbying and campaign contributions, thereby assuring public transportation money was directed towards automobile infrastructure. We relied on cars to get around, as transit, the cheaper safer alternative, at least for city dwellers, became an underfunded afterthought.

We came to take for granted our car-culture related problems: traffic jams, road rage, road noise, pollution, potholes, sirens, hit-and-run, jay-walkers, tailgaters, car-theft, car-jacking, construction detours, double-parked delivery trucks, way too loud motorcycles, car-alarms with minds of their own, ladders and mattresses appearing inconveniently on the freeway, the dreary search for parking. And all those dead and injured people, tens of thousands of the former and millions of the latter, every year.

Personally we paid for: car payments, gas, insurance, maintenance, repairs, parking, registration, car washes, smog checks, tolls, traffic tickets, Auto Club.

Via taxes we paid for: roads and bridges, highway patrol, traffic cops, the DMV, legislation, traffic lights, meter maids, stop signs and all those other signs, like “do not enter”, “one-way”, “dead-end”, and my favorite: “no diving from bridge.”

Then the We The People Amendment passed. That’s right. Two-thirds of both houses, and three-fourths of the state legislatures said Yes. Can’t remember the exact date, but is was closer to your time than to mine. It clarifies that when the constitution mentions people or persons, it is referring only to actual homo sapiens type people, and nothing else. Not corporations, not labor unions, not churches, not Super PACS.

The next morning was no different from mornings past. Same birds chirping, same coffee brewing, same breezy morning talk shows. But the wheel that had been frozen solid for so long gradually began to turn. Our elected representatives, local, state and federal, began to see the possibilities.

We realized that our common public information space had been colonized by corporations lying to us for the sake of money. We began to take that space back.

First to go was tobacco advertising. We had all just assumed that the freedom of speech guaranteed in the First Amendment gave tobacco companies the right to spend millions to persuade teenagers to smoke. Nothing we could do about it.

What a crock of shit that was. Collectively, our re-awakened representatives experienced a BGO (Blinding Glimpse of the Obvious).

Quickly, tobacco advertising was proscribed. Magazines, billboards, Online, point of sale, sponsorships, merch. All gone.

Early state constitutions prohibited corporations from political involvement. These restrictions weakened during the late 19th and early 20th centuries, then disappeared.

With the We The People amendment in place, this principle gained new life. These days, corporations may no longer make political contributions nor be involved in political campaigns. Penalties for violators are severe, including serious jail time and eye-popping fines. Still, some try to skirt the law, you know, fools rush in. Today there are still a few ladies and gentlemen who, representing their companies, have recently been caught trying to influence their legislators with cash, and who now have their living expenses provided by the State.

Old-style lobbying with hordes of corporate advocates wandering the halls of congress was replaced.

A company desiring a word with our legislators must request a hearing. Individual citizens, of course, can approach their representatives any time with no constraints. No change from the past. That includes corporate executives, on their own time, and on their own nickel. But if a corporation or some other entity itself wants to talk to our representatives, it has to go through channels.

Permission is typically granted, and hearings scheduled. They are televised live. They are similar to congressional committee hearings, with representatives from both parties listening to and posing questions to witnesses. The press and the public are also invited, who are given plenty of time to ask their own impromptu questions, as cameras roll.

Additional unexpected benefits appeared. Without constant pressure from lobbyists, who outnumbered your representatives by around 20 to 1, and pleasing corporate donors no longer an issue, Legislators paid closer attention to actual problems. They spent more time in serious dialogue among themselves. The result: more agreement and more effective legislation.

Personal transportation was one of many re-examined issues. Somebody got the bright idea that public transit should be universal and free to all.

This notion was greeted with its own round of raucous laughter. Where are we going to get money for this? Tax-and-spend insanity some said. These people hate America, some said. They want to spend us into oblivion, they said. Lock ’em up, they said.

Then they put their heads together and did the math. Calculations revealed that transit was way, way cheaper than owning a car. Cars were the second biggest expense for most families, just behind housing. How much cheaper? About $8000 a year, per vehicle.

So the question changed from “How could we possibly pay for all of this” to “what are we going to do with all that extra money?” The nation now spends hundreds of billion of dollars per year less on personal transportation than it did at the height of the homo- automobilus era. This one change lifted many out of poverty.

Everybody came out winners, auto and oil companies excepted. You can still acquire your own car, and with our legacy highway system, which is now maintained better than ever, driving is easier, safer and more pleasant. But most people have no need and use free public transit instead, saving a fortune.

Buses, trains, trams, and some innovative specialized vehicles are always there for a safe and comfortable ride. People hating transit turned out to be fake news. If you check the boxes, they will come: accessible, reliable, frequent, safe, goes where you need to go, inexpensive.

Vastly improved sidewalks and bike paths make walking and biking good options. If you absolutely must have your own personal vehicle, you can order a robot car or SUV to appear at your doorstep. Drive it yourself, or let the robot do it. Your choice.

We took other steps to ease citizen movement from point A to point B. For example, housing with more than a minimum number of dwelling units must now include retail. Need lunch or a haircut or your nails done or your shoes repaired? A pleasant walk will get you there.

So don’t give me that hang-dog look. Take heart in knowing that your great-grandchildren will be better off than you are.

The post Hey, You Laughin’ at Me? appeared first on The DNA of Corporations.

Previously, we looked into the operations of some of the worlds Most Polluting Industries.

Others might plausibly claim the title of Most Polluting, and we mean no disrespect to those who remain unmentioned. But we have to pick a winner, so here it is: the World’s Worst Polluter is the fossil fuel industry. The FF people, besides being mega-polluters, have limited time to claim their medal. They are, in fact, the walking dead.

FF companies are destined for extinction due to the unstoppable transition to renewable energy. This is not because of government subsidies, or lobbying by solar panel manufacturers, or the influence of communists. It is because the price of renewables, which was at one time extremely high, suitable only for expensive scientific projects, has decreased dramatically over the last two decades.

Now, in most of the world, renewables produce electricity cheaper than fossil fuels. They are also better by most objective measures. Their pollution of the environment is a fraction of that of FFs, and on a human time scale, they are inexhaustible.

Thus, electricity generation is rapidly shifting from coal and natural gas to wind and solar. In the correct usage of the term, it is growing exponentially.

Electric cars are flying off dealer’s lots. In the lifetimes of most readers, gas cars will be obsolete. Gas demand will shrink to a fraction of today’s.

It’s harder to electrify large trucks, but transition from diesel is only a matter of time. So-called green hydrogen will likely play a role.

Several companies now produce electric transit and school buses. Their use is expanding worldwide. Before long, FF powered buses will be found only in the scrapyard.

For air conditioning, electric heat pumps are the new better technology. A single unit can both heat and cool your house. Heat pumps replace gas and fuel oil space heaters. They give you better control of the temperature of individual rooms. They are cheaper and safer to operate.

Gas stoves are giving way to electric induction stoves which are the successors to those older models with the glowing coils. Water heaters? Same deal: out with the gas, in with the juice.

When the first iPhone appeared in 2007, a top Microsoft executive declared such devices, Smart Phones we now call them, had no market and no future. He soon realized his error. Your flip phone became a relic overnight. Your ICE car will soon join it. When these disruptive changes occur, than can happen fast.

Sad Prediction

As the transition to EVs accelerates, gas stations will wink out. Your favorite local provider will close its doors. Or, it may decrease the number of pumps, while adding charging ports, along with more varieties of chips (the edible kind), until one day, the last pump goes offline.

The shrinking population of ICE car drivers will be frustrated. Some will elect to store gasoline at home. This is not recommended. It will happen, however, with occasional unfortunate consequences: fires, explosions, destroyed buildings and dead people. Sorry to ruin your day.

The above is an introduction to the next installment where we will explain in detail why the FF folks get the prize.

But before that, we acknowledge up front that over the centuries, civilization changing amounts of energy have been provided by FFs. They have been a contributor, perhaps the main contributor, to the lifestyles we enjoy today. Those looking back in history get dizzy at the thought of living as people did 1000 or even 100 years ago, without the modern conveniences we now deem essential. This we don’t deny, and will spend no time judging past decisions. Fossil fuels did their job, and just as telephones replaced telegraphs, cars replaced horses, and Facebook replaced Myspace, FFs will be replaced by superior technologies.

Coming up: The no good, very bad, cosmically awful environmental record of the fossil fuel industry. Before beginning, be sure to ingest, smoke or otherwise deploy your chemical of choice. It’s not a fun read.

The post Who Pollutes the Most? — The Reveal appeared first on The DNA of Corporations.

Candidate Number 1

We might begin with the nuclear power industry. Today there are 437 nuclear reactors operating worldwide. The first began sending electricity to the grid in the early 1950’s. Their output, besides electrons, is large quantities of nuclear waste.

How much of this dangerous waste material, produced during the last 70 years or so, is now located in its final resting place? Answer: 0%. That’s right. None of it. It all waits in temporary storage.

When first removed from reactors, spent fuel, still hot and radioactive, is placed in pools of cooling water which must be continuously refreshed so it doesn’t boil away. If that happened, the spent fuel would quickly overheat and melt, causing catastrophe. This requires a reliable water supply, pumps to keep the water flowing, and people, real live people, to monitor the operation.

After a few years, the waste, cooler but still dangerous, is transferred to dry casks where it waits and waits.

Collections of these casks are vulnerable to weather and seismic events, clueless sightseers, and gun-toting citizens bent on target practice. And of course there are evildoers who might get the bright idea to blow them up or set them on fire. This is ok for temporary storage, but for long-term, it just doesn’t cut it.

But help is on the way. One country is now preparing to store nuclear waste permanently deep underground. No, not the USA, not France, not China, and definitely not Russia. It is Finland, population 5.5 million. The first load is scheduled for interment in 2023. Bravo to the Finns.

Nuclear power plants have other problems. There is the potential for catastrophic accidents. They don’t happen often, but when they do, it’s a big deal. The 1986 Chernobyl accident in Ukraine resulted in the permanent evacuation of the nearby town of Pripyat. Population pre-accident: 49,000. Population today: zero. The 2011 Fukushima Japan nuclear accident resulted in the evacuation of 154,000 people. More such events are inevitable in coming decades and centuries.

Then there is lake Karachay. It was a mid-twentieth century Soviet Union nuclear waste dump. It is located 1100 miles due east of Moscow. This lake became so radioactive that standing next to it for an hour would give you fatal exposure to radioactivity. Note: we are not talking about swimming in the lake. That would pretty much be suicide. This is just taking a stroll near the shore. If you plan on visiting, leave your water-skiing equipment at home.

Candidate Number 2

The next nomination goes to the mining industry. Abandoned mines are everywhere. By one estimate, there are more than a million worldwide. A question was posed to the web site communityliteracy.org. It was: Are old mines toxic? Here is the answer, quoted from the site:

Abandoned mine sites are great safety hazards. Many of these structures contain dilapidated frames, open shafts, and water- filled pits. The dangers that are found in the mines include old explosives, hazardous chemicals, bats, snakes, spiders, bobcats, mountain lions and other predators.

Yikes!

If you find this interesting, watch Tar Creek, the film about Picher, Oklahoma, a town in the northeast corner of the state. Picher is so polluted by mining that the EPA paid residents to move. Some folks, however, attached to their home town, refused to leave despite the danger. Most recent census: population 20.

Another unfortunate town can’t be excluded from the narrative. It is Wittenoom in Western Australia. A substance called “blue asbestos” was mined there from the 1930’s to the 1960’s. Turns out there are six types of asbestos, and of those, the blue variety is considered the most dangerous to humans.

This blue asbestos stuff so thoroughly permeated the landscape that the town couldn’t be restored to livability. Residents were evacuated, and the town was literally wiped off the map. Don’t go there.

Candidate Number 3

Or maybe the plastics industry. Wherever you go, you see it: water bottles, plastic bags, an uncountable variety of plastic containers, all non-biodegradable. Plastic floats on the ocean in huge rotating pools. They call them “gyres.” There are six big ones. The biggest is called The Pacific Garbage Patch.

Although most of this stuff floats near the surface, some has sunk to the bottom. More will do so over time, making it even harder to clean up. Whales, porpoises, dolphins and other sea-creatures find themselves entangled in plastic fishing lines and nets. Some of these aquatic creatures, mistaking pieces of plastic for food, scarf it down. Unfortunately, its food value is zero.

In a world that makes logical sense, manufacturers would play a role in the cleanup. But apparently, they do not. Instead of them, it was a Dutch teenager, Boyan Slat, who developed a technology for removing floating plastic from the ocean.

Slat, now 28, has worked on his project for a decade or so, founding a company called The Ocean Cleanup. It is funded largely by donations. Devices designed by the company team are now deployed around the world, removing large quantities of plastic from the ocean and also rivers. Watch his jaw-dropping explainer video here.

I could find no information about plastic manufacturers contributing to this cleanup effort. I could also find no indication that manufacturers are accepting the plastic thus collected to aid in disposal or recycling. Who knows more about plastic than the companies who create it? They are in the best position to deal with waste plastic. They have the know-how and the experience. But they are missing in action. If this is incorrect, and I am unjustly accusing them, please let me know, and I’ll be happy to give them credit.

These are some of the nominees, but the winner rules them all. Announcement coming soon.

The post Who Pollutes the Most? — Some Candidates appeared first on The DNA of Corporations.

We might expect a tobacco ban to net similar results: black markets, organized crime, products of suspicious provenance, overworked and underfunded police. So although everyone, smokers included, agree smoking is a bad habit, they might also agree that banning cigarettes would be a mistake.

But what about tobacco advertising? The general assumption in the world of commerce is that a product legal to sell is also automatically legal to advertise. Taken for granted.

But during these last days of corporate personhood, we might reconsider that principle. When corporations no longer have constitutionally protected freedom of speech, why would we continue to put up with tobacco advertising?

Early state constitutions required corporations to operate for the good of the community. State legislatures were empowered to hold them accountable, even to the extent of revoking charters, i.e. dissolving the company and putting it out of business. They were dead serious about corporate misbehavior.

So although not allowing a company to advertise seems extreme, it may not be in light of this principle. Banning cigarettes would not be for the good of the community, but banning their advertising would be.

Tobacco advertising, despite company denials and the demise of Joe Camel, is directed at children. This is because few people over the age of 20 are dumb enough to start smoking. Every adult knows that smoking causes cancer and other unfortunate respiratory ailments. For example, ask someone with emphysema to describe their experience. You will be horrified.

Non-smoking adults rarely start. To maintain their business, cigarette companies must recruit new smokers, and only the young are available. Parents and teachers preach to teenagers the dangers of smoking. But, big surprise, teens don’t always believe what adults tell them.

Once we have eliminated corporate personhood and control over corporate behavior is re-established, advertising, sponsorship, merchandise, and all other public promotion of cigarettes will be eliminated. While we are at it, we will also mandate so-called plain packaging.

If this freaks you out, please note: we have not prohibited their sale. We have placed no constraints on the freedom of individuals. You can buy cigarettes and you can smoke them in any appropriate venue. Four packs a day? It’s up to you. But you will have to supply your own motivation. Smoke or not, it’s your choice. But there will be no advertising messages attempting to talk you into it. A big win for public health.

Once we have de-normalized and eliminated tobacco advertising, what’s next? Are there other legal products whose advertising should be constrained? You might provide your own speculation.

Every vendor wants to maximize sales. For most items, there is a right amount, and then there is excess. For the company, however, there is no such thing as too much. Alcohol is an obvious example. Many engage in social drinking without consequence. We try to limit our own consumption, and take an Uber home if we’ve had too much.

You might be a responsible drinker, but many are not. A quick search reveals how many have lost their lives to alcohol. We are talking alcoholism, and we are talking traffic accidents. Nevertheless, sellers use every opportunity to convince us to consume more. Alcohol advertising definitely needs a second look.

Examples multiply. As of 2022 the obesity rate in the USA is 36.2% A few very small countries have higher rates, but among large nations, we are the fattest. We are not fat-shaming anybody, just reciting the statistics. Despite this, wherever we go, we are encouraged to chow down on double-bacon cheeseburgers or similar fare. Why is this a good idea? Even George H.W. Bush, may he rest in peace, would agree that if we replaced burger ads with broccoli we would be a healthier country.

It is not in the public interest to allow large corporations unlimited access to our common space. To say freedom of speech means its ok to use limitless corporate cash to convince people to do things that are bad for them is a perversion of the principle. Once corporate personhood has been eliminated, we will take back our space and manage it carefully.

And Speaking of Common Space . . .

Although Common Space as discussed here can be anywhere advertising reaches us, wherever we happen to be, the more traditional definition of Common Space is “outside.” Whenever you are outside, beyond your own yard, at least, you are in common space.

Walking down the sidewalk, driving, feeding the birds, hiking or biking. In common space, you are free to roam.

America is fortunate enough to have neither cities ruined by conflict, nor countrysides contaminated with land mines. We have built an amazing place through the efforts of generations of Americans over centuries. What does this landscape, this common space that belongs to the community, look like after these back-breaking efforts by millions of hard-working people? Well, here is what it should look like: beautiful, safe, clean, quiet, and well-maintained.

If you go outside, and you experience anything short of that, then you have been cheated. You and your forefathers have worked for it, and you shouldn’t settle for less.

If you live in a wealthy enclave, or in one of America’s picturesque small towns, then you may experience something close to this ideal. Unfortunately the resources that might have gone to maintain this beautiful place have instead migrated to the hands of a few very rich individuals, through the mechanism of the Corporate State. Thus for most of us, the environment is ugly, dangerous, dirty, noisy, and neglected. Americans deserve better, and they should demand it. How? Go to movetoamend.org

The post For God’s Sake, Don’t Ban Cigarettes! appeared first on The DNA of Corporations.

Even in big super-profitable companies, employees commit crimes for company profits. Why would they do that? Isn’t the company making enough money already? Dumb question. There is no such thing as enough.

Bribes. Phony accounting. Furtive disposal of toxic waste. Ignoring workplace safety. Insider trading. Greenwashing. Lying to congress. Threatening whistle-blowers. Just a few of many.

Those caught, at least sometimes, are charged and prosecuted. If due process finds them guilty, punishment follows. This legal mechanism we all understand and accept: the alleged bad guys should have their day in court, and if the evidence is there, pay the price.

But that’s only step one. Once the employee is convicted, we must also punish the company. This should occur even if the actions of the individual are taken on his own initiative, and not directed by a superior within the company or by any other employee or agent of the company.

Such punishment should occur even if the offending employee is not an executive or a decision-maker within the company. Sanctions should be applied even if the original perpetrator of the crime is an entry- level employee or a new-hire.

Punishing the individual deters him from further criminality, the intended effect. But if punishment does not reach beyond individuals, the employer has no incentive to hire better people.

We might compare two competing companies. If company A guards against criminal employee behavior and its competitor B does not, then in the absence of penalties, company B with the looser standards has a competitive advantage.

Company B is now more likely to gain market share over time, with corresponding greater odds of survival in the corporate arena. Although the offending employee may be gone, company B has no reason to hire an honest replacement. One evildoer can thus easily replace another.

Note it is not necessary for a personnel department to say “let’s hire some crooks, because we know we can get away with it”. Human resources staff would be justly offended by this suggestion. Rather it is a matter of what does not occur. If there is no penalty for hiring people likely to commit a crime, then there is no incentive to apply safeguards making their hiring less likely.

To disrupt this pattern, therefore, when employees break the law for the sake of the corporation, the company must also be penalized. Automatically.

Can we do this in the current era of corporate privilege? No, we cannot. Corps, though not human, currently enjoy constitutional protection which prevents application of such penalties. The Founders did not intend this.

But in the post-corporate personhood era, which many dedicated citizens are working hard to make a reality, we will gain control over these now unaccountable organizations and pass laws enabling these kinds of penalties. Companies will thereby be incentivized to hire more honest folks.

Corporations are not, and never have been “people.” Once corporate personhood is eliminated, rights that have been mistakenly provided to them will be removed. They will still get due process of course. We are not returning to the wild west. But due process for corporations does not have to be the same as due process for bona-fide human citizens.

Punishment of the employee will then be followed by punishment of the corp. Note that we are not suggesting the reverse: that employees should be automatically penalized for corporate wrongdoing. That would not be possible or desirable whether corporations are considered persons or not.

When the company is held liable, but no individual employee crime can be identified, then no person can or should be punished. Eliminating corporate personhood does not loosen the standards for criminal prosecution of people. Corporations are not people, but people are still people.

When the company is punished, it should hurt. Symbolic punishment is useless. If you could buy yourself out of a murder conviction for pocket change, it wouldn’t be much of a deterrent. The same principle applies here. For crimes of sufficient gravity, therefore, painful punishment will be delivered. Currently, companies are often fined for various infractions, but the amounts are usually small enough to be regarded as incidental business expenses.

For minor crimes, that’s fine. But for the really bad stuff, we will get the company’s attention. Increased fines will be proportional to the company’s prosperity. If two companies (or their employees) commit the same crime, the larger of the two companies will pay the larger fine.

What about equal punishment for equal crimes? We are not abandoning that principle. We are just measuring the severity of punishment in pain instead of dollars. Different size companies will pay different amounts for the same crime, but the pain, or economic suffering they experience will be the same.

Remember the following. In fact, write it on your wall:

If a fine doesn’t tank the stock price, its a slap on the wrist.

Sometimes a company is fined, and the stock price actually rises. It is a stock-holder sigh of relief that the problem is over. This should never happen.

There are cases, however, when the behavior of the company is so egregious that no fine is sufficient, and the company must be dissolved. Coming up: “The Execution of Corporations.”

The post Crime, Punishment and Prevention appeared first on The DNA of Corporations.

Did you know that there are at least 20 different new cars available today with sticker prices of a million dollars plus? Alongside well- known makers like Ferrari, Rolls-Royce and Aston Martin, we have the Rimac Nevera, the McLaren Speedtail, the Gordon Murray T.50, and my favorite, the Koenigsegg. Note that Ferrari and some other high-end automakers have generously supplied the market with less expensive models for those who can’t quite stretch to seven figures. You will be relieved to know that you can acquire an entry level Ferrari, the 2022 Ferrari Roma, for just a little north of $200,000. Thanks Ferrari, for not forgetting the little guy.

And suppose you are running out of room on your yacht: it could be 100 feet, 200 feet, maybe more. But it’s still too small. You have filled your house, or I should say your houses, with stuff, and now the boat is full too. You are out of room. What to do? You are becoming impatient and irritable. Your wife thinks you’re turning into a jerk, and suggests you call a therapist.

But throw away that phone number! There’s a better way. Slightly more expensive than therapy, but worth it. A shadow yacht. There are dealers specializing in this type of vessel, and there is one for you available today.

A shadow yacht is an extra boat that follows your main yacht across the seas. It has space for more things, more staff, and if necessary, an extra helicopter pad. Think of it as a seafaring mobile storage unit. Your worries are over. Whew! Close call.

And how about a nice watch? You can acquire a $20,000 Rolex and impress the proletariat, but elicit only a yawn from your rich friends. Better to call the RW Smith watch company, and get in line to have a watch custom made just for you. A watch from the world’s best watch maker will cost about the same as one of those less expensive Ferraris.

Or, since the wait time is in years for a Roger Smith watch, and you are impatient to wear on your wrist what amounts to more than the life savings of most people, then available now are less rare but still frightfully expensive offerings from Patek-Phlippe, Vacheron-Constantin and A. Lange & Sohne.

Many more such items are available to those with the cash. For a look at sparkly things you never imagined, go to jamesedition.com

This is indeed a nation of fabulous wealth. But not for everybody. Many more Americans inhabit the opposite end of the economic spectrum. People who can barely afford the basics even while working one, two or three jobs. People who constantly worry about feeding and housing themselves and their kids. People who don’t spend a lot of time pondering the current selection of Ferraris. They number in the tens of millions.

The United States is indeed the richest country, but some would also describe it as the “best” country. It is a subjective judgment, to be sure, but is held by many. And they have a case. The Founding Fathers. The Constitution. Wide open spaces. Elvis. I get it.

But in this country, the richest and the best, this land of unimaginable wealth, where lighting cigars with 100-dollar bills is not unknown, we have somehow collectively decided that it is perfectly fine to allow companies to profit from squeezing the last nickel out of this population of desperate people.

Thus we have predatory lending. It comes in many flavors, and as we dig deep, we pass student loans, equity stripping, loan flipping and several others, until we finally arrive at the very bottom of the sewer and there we discover “payday loans.”

Every company has a business model. Sometimes it involves receiving a few huge checks from wealthy people. Sometimes it is receiving many small checks from poor people.

A borrower walks into the store, writes a check and receives cash in return. The check is for the amount of the cash, plus a fee. Typical: $200 in cash, and a check for $230. The extra $30 is the fee, which is interest on the loan. The lender holds the check, then cashes it on an agreed-upon date. This is usually the day after the borrower anticipates depositing his next paycheck.

He has thus paid $30 for the benefit of receiving some portion of his paycheck maybe two weeks early. What is the annualized interest rate on this loan? Here is the calculation: 52 weeks divided by 2 weeks times 30 over 200 times 100 = 390%.

Wait a minute! This must be fake news. This kind of rip-off couldn’t possibly exist in the USA, can it? Well, it can and it does. But don’t take my word for it. Do a search. Data is easy to find. It’s a real number. 390% is actually on the low end for payday loans.

Imagine a Texas road trip. As you roll across the desert, you will from time to time spot a lonely oil rig, moving up and down slowly and patiently. This is a so-called “stripper” well. After the majors have extracted most of the oil and it no longer makes economic sense to maintain the field, they hand it over to smaller companies to squeeze out the last drops. Perhaps just a few barrels a day.

Payday loan companies are the equivalent of stripper wells, applied not to oil fields but to people.

This kind of business is a natural outcome of living in a corporate state. In case you forgot, here is the definition:

The Corporate State is a system of government, nominally a democracy, whose executive, legislative, judicial and regulatory decision-making is conducted for the benefit of for-profit corporations through the influence of money.

If all this makes you uncomfortable, then click HERE to find out about the grass-roots organization Move to Amend, and their proposal for a constitutional amendment intended to improve the lot of the poorest Americans, and thus all Americans.

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Native to Australia is the Koala Bear. Not really a bear, he is a marsupial, related to kangaroos and possums. Koala’s are furry and cute. You can see them when traveling Down Under, or else at the zoo. Toy stuffed versions are also available. The Koala’s diet is pretty boring: it eats nothing but eucalyptus leaves. If you are a dog owner, you know that dog food comes in limitless varieties. You are forced to choose. You could avoid this problem by switching to a koala.

Corporations are like koalas. Just replace eucalyptus leaves with cash. For koalas, there is no substitute for eucalyptus leaves, and for corporations there is no substitute for money.

Few corporate problems cannot be solved with enough money, and nothing can save one that runs out. This is not a criticism, merely a description of how they operate as human-created economic entities. Companies who can’t pay their employees or suppliers or lenders quickly perish.

Once we have internalized this point, other corporate behaviors become less mysterious. For example, you might read an article lauding a company as “a good corporate citizen”, or admonishing it to become one. However, being a good corporate citizen is only useful to the company to the extent that it helps sales or the ability to borrow. If there is a conflict between being a good corporate citizen and acquiring money, then its an easy call.

This preoccupation with money is inherent and unchangeable. This is similar to our own obsession with eating and drinking. Humans will continue this habit, and none of us expect that to change.

Corporations can pool capital to produce abundant goods and services or complete large projects. These capabilities we would be loath to abandon. And we don’t have to. We can’t change corps’ nature to put profits first, but we can control their behavior via our elected representatives.

Some day, the sooner the better, we will implement common sense principles, guidelines and rules to alter corporate behavior to be more in line with human well-being. This will be much easier once corporate personhood has been eliminated. In the words of Neil Young “should have been done long ago.” At that time, we will be able to curtail or eliminate corporate lobbying, and disallow corporate contributions to politicians and other government decision-makers. Corporations can continue doing what they do best, but with stricter rules. Policy-making will be left to us homo sapiens.

CORPORATE DECISION-MAKING

Consider the following scenario: There are competing companies A and B. Each has a smokestack that pollutes the air causing health problems for nearby humans. Suppose Company A’s management decides to do the “right thing” and install scrubbers on their smokestack, reducing pollution. We might admire this, but it could be a bad business decision.

Company A has just increased its costs, and is forced to increase prices, giving company B competitive advantage. However virtuous the social decision by company A, that decision could lead to its demise. In a competitive environment, companies who make too many such decisions wind up in the corporate graveyard.

The solution to the pollution problem is for a third party to require both companies to install the appropriate equipment. Then we have cleaner air without giving one competitor an advantage. The third party is called “government”, and the means of requiring is called “regulation”, known in some circles pejoratively as the “R” word. This particular scenario has in fact taken place in the United States. It is part of the Clean Air Act of 1963 / 1970.

HEAD-SCRATCHING ACTIVITY

The scrubbers noted above are an example of a company taking an action with no apparent financial return. Doesn’t that contradict the money- first principal? How to explain? There are many possibilities. Here are some. Partial list.

The pressure within a company to make money doesn’t mean it is impossible for executives to err. We admire the executives who made the scrubber decision, but the balance sheet is pitiless. A morally righteous action could be a business mistake. First example.

Second are bad marketing decisions. There was the intention of making money, but it just didn’t work out.

At the Dollar Store you will see both familiar and unfamiliar products from well-known makers. The familiar are usually damaged goods which can’t be sold at regular outlets. More interesting are the marketing errors. Perfectly good products that consumers never warmed up to. They are remaindered to the Dollar Store or similar retailers. Big companies, especially those selling food and other high-volume consumer products, are always experimenting with new lines. Some succeed, some don’t.

Third is PR. Donations to charity, for example, are made publicly, so all can observe the company’s virtues. Note that unless it makes an extremely unlikely major accounting error, charitable contributions will not cause the company any financial damage.

Fourth is when companies observe trends in opinions among potential customers. “Going green” is popular these days, so why not go green yourself, or at least pretend to.

If companies believe that particular corporate actions or statements, independent of their products, could cause customers to back away, they might decide to change the behavior in question.

Finally there is preemptive action taken when regulation is judged imminent. If a corporation or industry believes it cannot avoid regulatory constraints, that is, all its lobbying efforts to avoid them have failed, then it may ask congress to adopt a particular set of regulations, hoping to prevent stricter ones from being implemented later.

One could grow tired hearing of corporate lust for money. Sure they like money. just like all the rest of us. Most of us worry about money all the time, and never feel like we have enough. Aren’t they just the same as us?

Well, in some ways, yes, but with one big difference. If you were to take a piece of paper, and write down the things you would NOT do for money, you would produce a long list. Were a large corporation to be asked the same question in an honest moment, it would return a blank sheet.

This protracted discussion of corps and money has a goal: to adjust our thinking and enable us to answer the question: “Why is the company behaving as it does?”

So instead of pleading “How could they possibly do that?” while assuming they are some uniquely evil entity, or an outlier in the corporate world, calmly ask yourself “How does this activity result in profit?”, or in other words, follow the money. If you approach the question in this manner, you will get the right answer every time.

Money is indeed the decider for these non-fuzzy versions of Koala Bears.



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