The Corporation Page #2

as they had done

for so much of

our history.

And what happens is the

corporations come into court

and corporation lawyers

are very clever.

And they say

Oh you cant deprive

a person of life

liberty or property.

We are a person.

A corporation is a person.

And so supreme court

goes along with that.

And what was particularly

grotesque about this was

that the 14th amendment

was passed

to protect newly

freed slaves.

So for instance

between 1890 and 1910

there were 307 cases brought

before the court

under the 14th amendment.

288 of these brought

by corporations

19 by African Americans.

600000 people were killed

to get rights for people

and then with strokes of

the pen over the next 30 years

judges applied those rights

to capital and property

while stripping them

from people.

Everybody makes a mistake

once in a while

but I just cant be

personally responsible.

That's one of the weaknesses

of a partnership

isn't it Sid?

Well maybe you'd better

incorporate the store.

Incorporate?!

Yes

Incorporating would give you

the big advantage of

what you want right now

limited liability.

You start with a

group of people

who wanna invest their

money in accompany.

Then these people apply for

a charter as a corporation.

This government issues a

charter to that corporation.

Now that corporation operates

legally as an individual person

it is not a group of people

it is under the law

a legal person.

Imperial Steel Incorporated

has many of the legal rights

of a person.

It can buy and

sell property...

It can borrow money.

It can sue in court

and be sued.

It can carry

on a business.

Imperial Steel

along with thousands

of other legal persons

is a part of our

daily living.

It is a member

of our society.

Having acquired the legal rights

and protections of a person

the question arises

What kind of person

is the corporation?

Corporations were given

the rights of immortal persons.

But then special

kinds of persons

persons who had no

moral conscience.

These are a special

kind of persons

which are designed by law

to be concerned

only for their

stockholders.

And not say what

are sometimes

called their stakeholders

like the community or the

work force or whatever.

The great problems of having

corporate citizens

is that they aren't

like the rest of us.

As Baron Thurlow in England

is supposed to have said

They have no soul to save

and they have no body

to incarcerate.

I believe the mistake that

a lot of people make

when they think

about corporations

is they think you know

corporations are like us.

General Electric is a kind

old man with lots of stories.

Nike young energetic.

Microsoft aggressive

McDonald's young

outgoing enthusiastic

Monsanto immaculately dressed

Disney goofy.

The Body Shop

um deceptive

very lovely.

Do you know what the

body shop is?

Nope.

They have feelings

they have politics

they have belief systems

they really only

have one thing

the bottom line

How to make as much

money as they can

in any given quarter.

That's it.

Of course they

make a profit

and it's a good thing.

That's the incentive that

makes capitalism work.

To give us more

of the things that wanted.

That's the incentive that

other economic systems lack.

People accuse

us of only paying attention

to the economic leg

because they think

that's what a business

persons mind set is

it's just money.

And it's not so

because we as

business people

know that wanted to certainly

address the environment

but also wanted to be seen as

constructive members

of society.

There are companies that do

good for the communities.

They produce

services and goods

that are of value to all of us

that make our

lives better

and that's a good thing.

The problem comes in in

the profit motivation here

because these people

there's no such

thing as enough.

And I always

counterpoint out

there's no organization

on this planet

that can neglect

its economic foundation.

Even someone living under

a banyan tree is dependent

on support from someone.

Economic leg has to be

addressed by everyone.

It's not just

a business issue.

But unlike someone

under a banyan tree

all publicly

traded corporations

has been structured

through a series

of legal decisions

to have a peculiar and

disturbing characteristic.

They are required

by law

to place the financial

interests of their owners

above competing interests.

In fact the corporation

is legally bound

to put its bottom line

ahead of everything else

even the public good.

That's not

a law of nature

that's a very

specific decision.

In fact

a judicial decision.

So they're concerned only

for the short term profit

of their stockholders who are

very highly concentrated.

To whom do these

companies owe loyalty?

What does loyalty mean?

Well it turns

out that

that was a rather

naive concept anyways

as corporations are

always owed obligation

to themselves to get large

and to get profitable.

In doing this

it tends to be more

profitable to the extent

it can make other

people pay for the bills

for its impact

on society.

There's a terrible word that

economists use for this

called externalities.

An externality is the effect

of a transaction

between two individuals.

Third party who

has not consented to

or played any role

in the carrying out

of that transaction

And there are real

problems in that area.

There's no

doubt about it.

Running a business is

a tough proposition.

There are costs to be

minimized at every turn

and at some point

the corporation says

you know let somebody

else deal with that.

Let's let somebody else

supply the military power

to the middle east to protect

the oil at its source.

Let's let somebody else build

the roads that we can drive

these automobiles on.

Let's let somebody

else have those problems

And that is where

externalities come from

that notion of let somebody

else deal with that.

I got all I can

handle myself.

A corporation is an

externalizing machine

in the same way that a shark

is a killing machine.

Each one is designed

in a very efficient way

to accomplish

particular objectives.

In the achievement

of those objectives

there isn't any question

of malevolence or of will.

The enterprise

has within it

and the shark

has within it

those characteristics that

enable it to do that

for which it was designed.

The pressure is

on the corporation

to deliver results now

and to externalize

any cost

that this unwary

or uncaring public

will allow it

to eternalize.

To determine the kind

of personality

that drives the corporation

to behave like

an externalizing machine

we can analyze it

like a psychiatrist

would a patient.

We can even formulate

a diagnosis

on the basis of typical

case histories of harm

that is inflicted

on others

selected from a universe

of corporate activity.

Well this is the office

of the national

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