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.
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Corporate Penalties- Share
