Fighting Back Against Corporatization Part 3-- Neutralizing the Psychopath

Last week, I wrote about how corporations as psychopaths because they lack empathy due to their profit motive and limited liability. Today's post will be on how to defend oneself against psychopaths. The ideas are taken from a presentation by John Clarke on "Workplace Psychopaths" and a book by Martha Stout entitled "The Psychopath Next Door."

Collective Action

A common tactic by workplace psychopaths is to identify victims' needs and to use these needs to cause emotional pain and manipulate the victim. Clarke's list of needs looks a lot like the basic needs that we have as human beings and are also preyed upon by corporations.

 
After prolonged exposure to the psychopath, the victim can develop physical symptoms as well, including stomach ulcers, high blood pressure, rashes, hair loss, anxiety attacks,  and chronic fatigue. A victim often feel like they are going crazy, because they often think they are the only ones undergoing this experience, one that defies the normal bounds of reason.

As a result, victims often feel like they are stuck and that nothing can be done. In truth, there are things that can be done.

If the victims banded together, they would not be alone. They could also gang up on the psychopath. But once they adopt this strategy, they must be completely committed to each other, because the psychopath could easily turn on them and the victims would be worse off than when they started.

Auditors can provide a check on psychopathic behavior, because they are more difficult to manipulate. They come from outside the psychopath's usual power hierarchy. They also use performance measures to evaluate people rather than subjective reports.

Both of these remedies provide useful lessons for how to defend against the bad behavior of psychopathic corporations: collective action, transparency, and oversight. Isn't it interesting that trade unions are getting slagged so badly these days?

Transparency and Accountability

One of Clarke's central arguments is that auditors are the natural enemy of workplace psychopaths, because they assess based on objective measures of performance, can see through impression management, and sit outside of the psychopath's usual power hierarchy. If we translate this over to corporations, we would need a way to generate objective measures; bypass public relations, marketing, and lobbying; and be independent.


Currently, corporations are evaluated solely on profit and loss. This isn't working very well for human beings who are more than shareholders or consumers. Measures of performance should cover factors such as labor relations, environmental impact, safety, and social responsibility. Organizations such as United Nations Educational, Social and Cultural Organization (UNESCO) and the International Standards Organization (ISO) have already started work on measurement regimes. I'm personally skeptical of balanced score cards. I'm sure corporations will find a way to manipulate these too, but maybe somebody who has a better grasp of game theory should design and implement them.

In order to calculate these measures, we'd need access to raw data from the companies, not just press releases or cleaned up data. We'd need to make it a legal requirement that companies release these figures.

The independent part basically rules out government at this point. Politicians need way too much money to get elected these days. It takes on average over $1.3 million to win a US congressional seat and over $8 million to win a senate seat. It's too hard to raise that much money without becoming beholden to someone. If it's not government, that basically leaves us. We are the ones who need to keep our collective eyes on corporate behavior.

Robert Jensen, a professor in the School of Journalism in the University of Texas at Austin has proposed a Citizen's Oath of Office. It is intended to be taken by every citizen on the same day that our elected representatives take their oaths of office. It states:

I do solemnly pledge that I will faithfully execute the office of citizen of the United States, and that I will, to the best of my ability, help create a truly democratic world by (1) going beyond mainstream corporate news media to seek out information about important political, economic, and social issues; (2) engaging fellow citizens, including those who disagree with me, in serious discussion and debate about those issues; (3) committing as much time, energy, and money as possible to help build [authentic] grassroots political organizations that can pressure politicians to put the interests of people over profit and power; and (4) connecting these efforts to global political and social movements fighting the U.S. empire abroad, where it does the most intense damage. I will continue to resist corporate control of the world, resist militarism, resist any roll-back of civil rights, and resist illegitimate authority in all its forms. [And I will commit to collective efforts in my local community to help build joyful alternatives to an unsustainable consumer society.]

 It strikes me that this oath would serve equally well for the purpose of resisting corporatization.

Token Economy

Clarke's third suggestion is to institute a token economy to reinforce good behavior and deter bad behavior. A token economy is a system of behavior modification that uses systematic positive reinforcement of target behavior using symbols or tokens. It is often used with children, mental institutions, and prisons. Privileges can be earned or lost based on choices made.

I find this idea appealing, because it's cute. I don't know how well it would work, but Clarke is an advocate and it has been used elsewhere successfully with recalcitrant populations. This idea also ties in well with the accountability measures discussed above. If you don't damage the environment, your charter can be extended. If you treat your workers well, your corporation is allowed to grow larger. If you're not socially responsible, we'll increase your tax rate. (I'm not crazy about this last one, because I think we should be simplifying our tax code, not making it more complex.)

Resist the Urge to Pity

"The Psychopath Next Door" by Stout has a chapter on 13 rules for dealing with psychopaths.  IMHO, it's the best part of the book.  I include two of them here.

9. Question your tendency to pity too easily.
Respect should be reserved for the kind and the morally courageous. Pity is another socially valuable response, and should be reserved for innocent people who are in genuine pain or who have fallen on misfortune. If, instead, you find yourself often pitying someone who consistently hurts you or other people, and who actively campaigns for your sympathy, the chances are close to one hundred percent that you are dealing with a sociopath.

In other words, don't feel sorry for corporations. When an automaker says that it's too difficult to meet new emissions or fuel efficiency standards, make them comply anyways. When a corporation complains that the taxes are too high, tell them that this is nonsense. When a mining corporation protests that safety regulations are too stringent, don't listen.

The last rule on her list is "Living well is the best revenge." I'll be writing about this in my next post.

Fighting Back Against Corporatization Part 2-- Striking at the Roots

Last week, I wrote about the rationale behind the creation of corporations as legal entities. If these institutions are not serving us well, then let's change them. Today's post will be about some of the ideas afoot about how this might be done.

Limit the Scope of Corporations

In "The Story of Citizens United v. FEC,"Annie Leonard explained that in the 19th century, corporations were created to undertake short term projects, such as the construction of a bridge or railroad. Upon completion of the projects, the corporation would be dissolved. We could try going back to this model, by limiting the size or duration of a corporation. For instance, any corporation with a market capitalization greater than a certain number of dollars would be forced to divide itself into new competitive units. This would also eliminate the problem of some corporation, such as a bank or auto manufacturer, being too big to fail. Another option is to have expiry dates for corporate charters, for example, it can't last more than, say 6 years.

Limit Limited Liability

When a corporation causes some harm to people, through, for example, environmental damage, drugs with side effects, faulty products, or outright malfeasance, the victims and their survivors can only sue the corporation for its assets. Limited liability prevents them from suing the shareholders, owners, or managers of the corporation for their personal assets. Unfortunately, the value of the claims can often exceed the available assets and someone invariably gets the short end of the stick.


Michael Rozeff, a liberatarian, has argued for abolishing limited liability entirely, because the arrangement skews risk assessment and market valuations. Arguments in favor of abolishing limited liability have also come from progressives, such as the article in Mother Jones following the Union Carbide gas plant accident in Bhopal, India, and the spill of the Exxon Valdez in Alaska.

Less dramatic options exist as well. Shareholders could be made liable for their capitalization and any earnings that they have received. In other words, they could lose the value that they initially invested PLUS any dividends that they were paid. For example, someone who held shares of a high profitable tobacco company would have to return the money they made if it was needed to cover claims by victims or their survivors. Another option that is currently popular is to increase the personal  responsibility of executives.

Change the Tax Code

Currently, capital gains, i.e. income from an investment, is taxed at a lower rate than earned income. I see two problems with this. 1) It encourages people to buy shares and sit on their butts, rather than to use their money do work that increases other kinds of value. 2) It encourages creative accounting to move income from one category to another. It would be more beneficial to society for this creativity to be directed elsewhere. The simple solution is to simply remove the category of capital gains. Income is income. Investing in corporations would no longer be the default choice for making money grow and people would look closer at other options, such as supporting local projects.

Amend the Constitution

This proposal is specific to the US, because it addresses a uniquely American problem. The idea is to amend the constitution to explicitly state that corporations are not persons and subject to protections under the bill of rights. Much of the  outrage surrounding corporate personhood came to a boil last year after the Citizens United v. FEC case was decided by the US Supreme Court and limits on how much money corporations could contribute to political campaigns were removed. These limits, it was decided, were an infringement of corporations first amendment rights to free speech. Many people felt that this overstepped the bounds of reason and are mobilizing. Perhaps the most visible example is Stanford University law professor, Lawrence Lessig, and his root strikers project.

Interestingly, the origins of corporate personhood are murky at best. As Rushkoff wrote in Life Inc., the concept crept into law through dogged persistence on the part of corporations and a clerical "error."

The passage of the Fourteenth Amendment, written to guarantee the rights of citizenship to former slaves, gave corporate lawyers the legal framework to make their cases. For reasons historians can't quite articulate, the Amendment uses the phrase "persons" instead of "natural persons." Corporations argued that this was because it was meant to include their own, non-natural personhood. In their opinions, justices repeatedly scolded corporate lawyers for attempting to exploit a law written on behalf of emancipated slaves. But the corporations had patience, and opportunistically sought out every leak and crack in the system.

Finally, in 1886, in a legal maneuver that has yet to be conclusively explained, a Supreme Court clerk with documented affinity for corporate interests incorrectly summarized an opinion in the headnotes of the decision on Santa Clara County v. Southern Pacific Railroad Company. The clerk wrote, "The defendant corporations as persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution... which forbids a State to deny any persons within its jurisdiction the equal protection of the laws." There was no legal basis for this statement, nor any discussion about it from the justices. From then on, however, corporations were free to claim the rights of personhood. The more precedents that were established, the more embedded the law became. Over the next twenty-five years, 307 Fourteenth Amendment cases went before the Supreme Court. Two hundred eighty-eight of them were brought by corporations claiming their rights as natural persons.

At present, movetoamend.org is gathering signatures in support of three constitutional amendments, one of which is to "[f]irmly establish that money is not speech, and that human beings, not corporations, are persons entitled to constitutional rights." Their effort builds on the work of reclaimdemocracy.org, which has written the following draft amendment. 

An Amendment to Preclude Corporations from Claiming Bill of Rights Protections

SECTION 1. The U.S. Constitution protects only the rights of living human beings.
SECTION 2. Corporations and other institutions granted the privilege to exist shall be subordinate to any and all laws enacted by citizens and their elected governments.
SECTION 3. Corporations and other for-profit institutions are prohibited from attempting to influence the outcome of elections, legislation or government policy through the use of aggregate resources or by rewarding or repaying employees or directors to exert such influence.
SECTION 4. Congress shall have power to implement this article by appropriate legislation.

Getting a constitutional amendment passed is not an easy task, especially in the face of opposition supposed and financed by corporations, but it is a very cool solution. If we get it done, it will be something to tell the grandkids about.

Profit motive + limited liability == lack of empathy == psychopathic corporations

In yesterday's post, I talked about the three design principles behind the invention of the corporation-- the profit motive, limited liability, and centralization of existing person-to-person relations. In today's post, I'm going to further examine the implications of the first two.

Profit Motive

The desire to make money in and of itself is not a bad thing. It's a fact of life in our industrialized, urbanized lifestyle that we operate on a currency-based economy. Besides, who wouldn't want lots of money to spend on a big house, fancy vacations, and a top-of-the-line iPad 2. When money becomes the highest or even the only priority, the profit motive becomes problematic.  Some words that we would use to describe a person driven only by the profit motive include: greedy, materialistic, shallow, miserly. I, for one, wouldn't be eager to make friends with someone like this.

The situation is the same for corporations. The profit motive is not necessarily bad, but when coupled with an insensitivity to all other priorities it becomes downright evil.

Limited Liability

The intent of limited liability is to encourage new enterprise and innovation. The scheme helps corporations to locate capital, because the liability of the shareholders are limited to the amount that they contributed. In other words, members of the corporation can lose their initial stake, but they won't lose their other assets. This not entirely unreasonable, because large projects can have large risks, but are nonetheless worthwhile undertaking.

The problem with limited liability is it further exacerbates the negative consequences of the unfettered profit motive and further shields the corporation pressures to be more empathic to people. Limited liability is essentially a license for "one person to damage another person with impunity." Consequently, corporations can make as much profit as possible, with no regard for harm. To my knowledge, no such license is granted anywhere else in society. Even police, the military, and intelligence services are granted such license on an exceptional basis and under civilian oversight. Shareholders could provide similar oversight, but limited liability means that they don't have to. The worst thing that could happen (losing their initial investment) is not that bad, and best thing that could happen (limitless wealth) is pretty fabulous.

Lack of Empathy

The combination of profit motive and limited liability means that corporations are largely insensitive to priorities other than making money. Without pesky shareholders to keep corporate feet to the fire of a human conscience, corporations have no pressure to be socially responsible or do more than the bare minimum to be in compliance with environmental or product safety regulations. 

In "The Story of Citizens United vs. FEC," Annie Leonard described the lack of empathy this way:

Unlike people, who are driven by all kinds of motivations doing the right thing, love for family their country, the planet, publicly traded corporations are required by law and markets to do one thing above all others: maximize value to shareholders, make as much profit as possible. That's it. ...Yes, it is people running these corporations. But their human motivations come second. If they prioritize anything at all above making profits, they're out of there. Can corporate leaders do good things like give to charities or try be more green? Sure, but not if it conflicts with maximum profits.

When people act without regard to the feelings and needs of other people, we hear terms like  insensitive, callous, and remorseless. Yet when corporations do this, we hear terms like job creation, economic boost, fiscally responsible, and fiduciary duty.

But to be completely accurate, the lack of empathy doesn't extend to all human beings. Last year in the US, CEO pay increased 27%, while worker's wages rose only 2.1%, barely keeping pace with inflation. The median CEO pay is $9 million, which is more than 280 times the approximately $32 000 earned by the average worker last year.

Psychopathy

In psychiatry, there is a term for people who don't feel empathy and that's "psychopath," sometimes referred to as intraspecies predators. Yes, this is the same label that they apply to serial killers. Not all psychopaths become serial killers. For that matter, not all become violent offenders. About 1-3% of adult males and 0.5-1% of adult females are estimated to be psychopaths. Both figures are believed to be underestimates. Some researchers have pointed out that corporations are also psychopaths, because they lack empathy.

Psychopathy is a psychological defect with a biological basis. The part of the brain responsible for empathy is absent or badly malformed. In contrast, mental illness, such as depression, is like a cold, meaning that it's transient and someone can get over it. Psychopathy is permanent and possibly not treatable. I once dated a psychopath and a professional told me that the only thing to do was to stay away from him. Wikipedia characterizes psychopathy as follows:

Psychopaths gain satisfaction through antisocial behavior, and do not experience shame, guilt, or remorse for their actions.^[12][13][14] Psychopaths lack a sense of guilt or remorse for any harm they may have caused others, instead rationalizing the behavior, blaming someone else, or denying it outright.^[15] Psychopaths also lack empathy towards others in general, resulting in tactlessness, insensitivity, and contemptuousness. All of this hampers their tendency to make a likable first impression; psychopaths have a superficial charm about them, enabled by a willingness to say anything to anyone without concern for accuracy or truth.

Currently, we have psychopathic corporations tell us who we should be electing (unprincipled politicians), what is valuable (knick-knacks at gift shops), and how we should be spending our time (watching TV, where they show ads). This is crazypants.