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Apple instigates Police Raid over lost/stolen iPhone 4G
Carol Haynes:
it's not the game that's at fault.
-Gwen7 (May 01, 2010, 02:52 PM)
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Actually that is the point - the game is at fault.
The rules are specifically set up so that corporations by law have to maximise profit - if you fail to do that then you are actually guilty of defrauding the stock holders.
It is precisely why on 911 some Wall Street traders openly admit that they were excited by the trading possibilities arising from the disaster and also a major reason why so many companies actively encourage governments (often via bribes in the form of political donations) to get involved in pointless wars.
40hz:
^ I think you may be equating rules of corporate governance with capitlist economic theory.
They're not one and the same thing.
And I'm going to need to take issue with the defrauding the shareholder argument. It's one I hear often asserted but never with anything to back it up.
Corporate officers are required to exercise fiduciary responsibility. Corporate officers may be prosecuted for taking unacceptable risks or showing gross dereliction of duty in the governance of the corporation. But I have never seen or heard of any judicial system that prosecuted a corporation or its officers for not being sufficiently "cutthroat."
If I'm wrong on that point, I'd really appreciate a link to the particulars because AFAIK no such case has ever come before a court. And other than a nusiance suit filed by a disgruntled shareholder (and soon to be summarily dismissed) I doubt there ever will be.
:)
Carol Haynes:
First and foremost it is virtually impossible to sue large corporations unless you plan to devote your life and every penny you can raise to it (see McLibell for one of the very few exceptions to this observation - and they were minimum shareholders, only in order to go to shareholder meetings). Much simpler and a hell of a lot cheaper simply to sell your shares and move if you are not happy. The ease of selling shares is why most corporations do behave like amoral psychopaths - they don't want to lose investors.
There are plenty of arguments in the opposite direction: eg. shareholders expressing concern over the flooding of Africa with baby formula foods whilst the companies argued that they were just expanding into a global market (ie. maximizing profits). At the same time the company was blatantly lying that the formula was better than breast milk.
How about the US company that released poisonous gas at Bhopal in India and is still to admit responsibility or pay compensation to the families that are still suffering to this day?
The fact is that money markets are not the preserve of individual shareholders - most shareholders are corporate entities not individuals. Individuals are so far removed from any sort of decision making or moral responsibility that the only imperative is the bottom line.
By definition corporate life is (and has to be) amoral - it is precisely why corporations were originally conceived as business entities that had a limited scope of operation. They had a corporate charter with a remit to perform one task for a limited fixed period of time and in one particular place. They were not allowed to own other businesses. It was only sleazy corporate lawyers and corrupt judges that created loopholes from the law designed to protect freed slaves that allowed the US in particular (and now most countries using the same corporate model) to become completely dominated by multinationals that owe no allegiance to countries or any other entities other than money.
Most of the people running these large multinationals are not even involved in the day to day decisions of their subsidiaries (and their subsidiaries etc.). They only have an overview of how the corporation is performing for personal profit in the first instance closely followed by shareholders. This is precisely why banks that have almost caused the collapse of the world economy are still making profits and paying out huge bonuses.
40hz:
I love Carol! :-* She make me think.
Ok...
First and foremost it is virtually impossible to sue large corporations unless you plan to devote your life and every penny you can raise to it...-Carol Haynes (May 02, 2010, 07:50 AM)
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I don't know how true that that is. Large corporations (at least in the USA) are routinely and often successfully sued by smaller challengers. What keeps most such cases from reaching a verdict is the all too frequent willingness on the part of the entities bringing suit to accept financial and other settlements rather than risk going to a jury. And the reason so little is heard about them is that the plaintiffs will also almost always agree to a non-disclosure clause as part of the settlement.
So from my perspective, we're often just as guilty as the next for allowing ourselves to be bought off. When I used to be very involved in consumer advocacy causes, I learned a bitter lesson from one attorney I got friendly with. I was extremely frustrated with the number of times we got the rug pulled out from under us when the people we were advocating for cut a deal.
She had a terrific phrase that summed up the problem very neatly:
"It's just baseball."
Out on the field, we're all in it together. But up on the plate, we each stand alone.
But I'd like to go back to my original point about legalities.
As I said, I keep hearing people, and to be fair (on rare occasions) even corporate officers, assert that corporations can be held legally liable for not availing themselves of every and any means at their disposal to maximize revenue. And that would include immoral, amoral, or borderline legal actions.
And to which I again say: Simply not true.
The requirement to exercise fiduciary responsibility neither allows nor justifies illegal or immoral activity on the part of a business. Whether or not they routinely do, in fact, get away with such behaviors is up for debate. But there is absolutely nothing in any corporate law that either states or implies a requirement for businesses to act in such a manner.
And that was what I was taking issue with.
How about the US company that released poisonous gas at Bhopal in India and is still to admit responsibility or pay compensation to the families that are still suffering to this day?
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I assume that you're referring to Union Carbide's chemical plant disaster here?
Probably not the best example to cite for corporate irresponsibility...
I was outraged as the next person when that story originally came out. However, if you look beyond the original headlines, and follow up on what went on before, during, and after that tragedy, a very different picture emerges. And that picture involves political posturing, collusion on the part of the Indian government to limit the scope of the investigation in order to deflect shared responsibility for numerous questionable actions initiated at their request; and the refusal of the Indian government to allow an independent international investigation to be conducted into plant design changes and circumstances leading up to the occurrence.
Then there's the unresolved scientific debate surrounding exactly what the proximate cause for the explosion was. Something which remains unanswered to this day due to India's insistence on gathering and controlling all the evidence and testimony in the original and subsequent investigations. It just goes on and on.
I also have to take issue with the characterization they "released poisonous gas." In keeping with the demonetization theme, that implies some huge uncaring giant villain deliberately or carelessly elected to kill a few thousand helpless and unsuspecting people. It paints a picture of actual intent where none exists. Far more accurate to say "an explosion at a plant jointly owned by Union Carbide and a consortium of public and private Indian investors resulted in the release of a toxic cloud of gas which caused the death of many people." Maybe not as catchy and righteously indignant as headlines like "Union Carbide Kills Thousands in India!!!" But it would be a lot more accurate statement.
I'm not defending Union Carbide. It's their plant, it's their responsibility. But I strongly question whether it should fairly be considered theirs alone.
Unfortunately, there's a tendency with most governments to take the easy way out in situations like this one. The formula seems to be: unilaterally blame the foreign interest for everything; if at all possible, demonize said foreign interest to deflect domestic criticism; accept no local governmental responsibility for anything despite having regulatory authority; and stonewall any and all requests for independent outside review.
Bophal was tragic. But what was even more tragic was how the survivors are still waiting for some relief, largely because of the Indian government's absolute demand that Union Carbide USA be held solely to blame. Something which they continue to insist on despite a large amount of evidence to show there's plenty of blame to be shared by all parties involved.
The posturing continues to this day with the refusal of the Indian judiciary to vacate a warrant for manslaughter against Warren Anderson, who was the CEO of Union Carbide at the time of the incident. It's of interest to note that Anderson was given advance notice, taken into custody and placed under house arrest for a few hours, allowed to post a bond of something like $2,000 dollars - and then placed on an Indian government owned plane and flown out of the country.
It's generally understood that charging Anderson was primarily done as a symbolic gesture intended to pressure Union Carbide into more rapidly settling charges made against it.
But apparently this little bit of puppet theater continues to make hay for some local politicos. Because the warrant is still outstanding. And there ain't nuthin' better than a bad guy on the loose to make people want to vote for the guy who promises to bring him in.
Someday....
But despite the fact that the United States has an extradition treaty with India, and the fact that Anderson is still under indictment - AND officially listed as a fugitive under Indian law since the early 90s - absolutely no real efforts have ever been made to seek a US extradition warrant for his return to India to face these charges.
Sic transit gloria mundi...
By definition corporate life is (and has to be) amoral - it is precisely why corporations were originally conceived as business entities that had a limited scope of operation. They had a corporate charter with a remit to perform one task for a limited fixed period of time and in one particular place.
--- End quote ---
That isn't, nor has it ever been the case in the US.
The primary reason the corporate structure was created in the US was to provide for legal continuity. Prior to that, businesses couldn't legally survive the death of their founders. Corporations were initially designed to create a separate and immortal legal entity to act as the perpetual "owner" and representative of the business.
And that's not purely symbolic either.
Over here, a corporation has always been thought of as some amorphous but very real person who exists as a citizen with all the rights and responsibilities any other person has under the law. It can own property; enter into contracts; petition for relief and redress for grievances; and seek protection under the rules of due process just like any other citizen. In short, it is guaranteed full protection under the US Constitution and Bill of Rights in all matters of law.
And this legal theory isn't a loophole that got created by sleazy lawyers and judges. It was something put there by design from day one.
Then there's the issue of scope...
US corporations can have as broad or as limited a charter as they choose to elect.
Yes, US Corporations are chartered to do specific things. But a US corporate charter almost always includes a clause which says "and any other business it may legally conduct." Under US law, all incorporated American businesses are generally presumed to operate with 'unlimited scope' and 'in perpetuity' except when a company self-elects to limit its charter (note: hardly any ever do) or when it is in an industry that has specific rules regulating its range of legal activity.
I've been given to understand the UK, and many other countries, truly think of corporations as "limited" companies, hence the 'Ltd.' that appears in so many business names?
In the US, the use of the term "Ltd." in a corporate name generally serves no purpose other than to try to make a business sound more cosmopolitan and sophisticated than the more usual "Inc." designation would allow.
So maybe part of this debate stems from some very real differences in what various countries think of when they think of corporations. Over here, corporations are artificial albeit real 'people. '
Which is probably why they sometimes look and act like Frankenstein's Monster. :)
It was only sleazy corporate lawyers and corrupt judges that created loopholes from the law designed to protect freed slaves that allowed the US in particular (and now most countries using the same corporate model) to become completely dominated by multinationals that owe no allegiance to countries or any other entities other than money.
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Woo...that's an interesting bit of info! Which law for the protection of freed slaves is it that the US corporate model retooled (or loopholed ?) - and which law(s) was it designed to circumvent?
I actually have a business degree - but that's a new one for me. Obviously that's not an interpretation that gets taught here, so I'm quite interested in gaining some new perspective.
Most of the people running these large multinationals are not even involved in the day to day decisions of their subsidiaries (and their subsidiaries etc.). They only have an overview of how the corporation is performing for personal profit in the first instance closely followed by shareholders. This is precisely why banks that have almost caused the collapse of the world economy are still making profits and paying out huge bonuses.
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Ah...the absentee ownership issue. Most excellent point. That is a major problem which plays into our general uwillingness accept responsibility for things which occur remotely even when there is a clear cause and effect relationship. The neuroscience crowd says it's mainly due to a cognitive blind spot in our psyche. What isn't right in front of us isn't as 'real' as what is.
It's the old "out of sight - out of mind" mechanism rearing it's ugly head.
That's one of the reasons I'm so opposed to all this new autonomous and remote military technology. It reduces warfare to the status of a video game, except there's no "new" or "undo previous move" options. Remove any direct awareness of the pain and suffering warfare inflicts from the act of waging war, and you pave the way for untold human misery.
And as with war - so with business.
A faulty analogy, but quite apt in this context.
:)
Carol Haynes:
That isn't, nor has it ever been the case in the US.
The primary reason the corporate structure was created in the US was to provide for legal continuity. Prior to that, businesses couldn't legally survive the death of their founders. Corporations were initially designed to create a separate and immortal legal entity to act as the perpetual "owner" and representative of the business.
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Try this page which explains the history if incorporation:
http://www.reclaimdemocracy.org/corporate_accountability/history_corporations_us.html
Woo...that's an interesting bit of info! Which law for the protection of freed slaves is it that the US corporate model retooled (or loopholed ?) - and which law(s) was it designed to circumvent?
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It is the 14th amendment to the constitution which was created primarily to stop the removal of property from black people and in particular freed slaves. There is some info on this towards the end of the same article.
Also see http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution
Also see:
As Adam Smith pointed out in the Wealth of Nations, when ownership is separated from management (i.e. the actual production process required to obtain the capital), the latter will inevitably begin to neglect the interests of the former, creating dysfunction within the company. Some maintain that recent events in corporate America may serve to reinforce Smith's warnings about the dangers of legally-protected collectivist hierarchies
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(source http://en.wikipedia.org/wiki/Corporation)
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