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Are Corporations Amoral?

[ 139 ] March 21, 2013 |

It’s rare that I disagree with Rob Neyer. But I have to push back on his column about Major League Baseball owners deciding to eliminate the pensions of their non-player employees, despite being quadzillionaires who could obviously afford it. One thing I like about covering labor issues in professional sports is that it’s the only field that grabs the attention of enough people that the little things like this get into the spotlight. Employers around the country are destroying pensions, but when NFL owners lockout referees over it or MLB owners try it, it opens space to talk about it.

Anyway, Neyer argues that corporations are amoral rather than immoral:

But with just a few exceptions, big companies aren’t in the business of respecting people; they’re in the business of sucking as money from their customers and as much labor from their employees as possible, while exacting the maximum amount of profits. They are not generally immoral; they are intrinsically amoral. Eliminating pensions isn’t evil, and perhaps not even shameful.

Corporations have made such inroads into our consciousness that this kind of formulation is common, even among people generally politically progressive like Neyer. Corporations are not some disembodied beast. They are made up of human beings with human values. We as a society allow these wealthy humans who make up a corporation to exercise power up to a given limit, depending on our own values. In times like today, or in the first Gilded Age, when corporations exercise relatively maximum power over society, to create philosophical justifications for their existence that free them of responsibility to larger society. Profit taking becomes naturalized, rather than a socio-economic-political choice. Whether this is the Social Darwinism or Gospel of Wealth of the late 19th century or the weird corporation-as-human creation of the modern Supreme Court, these ideas give corporations room to make very human choices without suffering consequences or even criticism.

It doesn’t matter what big companies are in the business of doing. They are controlled by people who are seeking to maximize wealth at the top of society. It matters to what extent we allow those rich people to do this. Today, we allow them to do about whatever we want, a consequence of a sixty-year pushback against the New Deal that has convinced lots of Americans that business knows all. This attitude allows Bill Gates to shape education policy for no other reason than he is rich. It allows for immoral fallbacks on “fiduciary responsibility” to shareholders to justify any policy, no matter how antisocial. It allows for a Supreme Court to declare that corporations can openly buy elections.

Corporate dumping of toxic chemicals into rivers is in fact evil and shameful. That’s because doing so is a decision made by human beings to maximize profit at the cost of hurting nature and people. The same goes for union-busting, for pension-slashing, and for race to the bottom politics. So long as we apologize away the behavior of corporate leaders by naturalizing their behavior, the things that upset us about corporate control over society will continue to occur. Only by pushing back against corporate ideology do we make society more equal. And that includes for the employees of Major League Baseball.

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  1. (the other) Davis says:

    As individuals, we are constrained in our behavior by social norms as well as by legal restrictions. I’ve encountered a number of sociopathic individuals (including some self-proclaimed libertarians) who find it abhorrent (or unacceptably “coercive”) that there should be any consequences for violating social norms. Given the absence of effective control-by-norms in the corporate world, it doesn’t surprise me in the least that these types end up finding places for themselves there.

    • Linnaeus says:

      Which is interesting, since you would think that social norms would be exactly the kind of mechanism libertarians would prefer to legal restrictions.

      • (the other) Davis says:

        That’s why I’m always so confused by those self-proclaimed libertarians who get upset with social consequences. It’s almost as if what they’re really interested in is the freedom to do whatever they want without *any* consequences.

        • NonyNony says:

          It’s almost as if what they’re really interested in is the freedom to do whatever they want without *any* consequences.

          Yes this.

          Being a libertarian in the 90s it became obvious that all of the talk about small government was a dodge. Libertarians generally believe that they have a Constitutional Right to be an asshole and that they also have a Constitutional Right to never be told that they’re acting like an asshole or have to pay any kind of penalty (legal or social) for behaving like an asshole.

          People interested in liberty dabble in libertarianism until they grow up, then they become civil libertarians and move on. The assholes left behind are reliable Republican voters.

          • Dana Houle says:

            Libertarians generally believe that they have a Constitutional Right to be an asshole and that they also have a Constitutional Right to never be told that they’re acting like an asshole or have to pay any kind of penalty (legal or social) for behaving like an asshole.

            Bingo.

            I’d add one other part, though: fear of and/or inability to deal with ambiguity. Libertarianism is very simple, and very mechanistic. It’s a haven for sociopaths but also for those who desire predictability and fear the uncontrollable and the unknown.

            • NonyNony says:

              I’d add one other part, though: fear of and/or inability to deal with ambiguity.

              Actually, I think that’s an attribute of conservatism of any stripe, not just libertarianism. If anything, the libertarian stripe of conservatism handles ambiguity better than the rank and file conservative of the Republican party (though admittedly probably less well than the rank and file conservative of the Democratic party – I’ll have to think on that one…)

        • Captain C says:

          Once you cut through the rhetoric and contradictions, yes, that’s pretty much it, with the caveat that the rule only applies to them (and occasionally their friends/family/business partners provided said associates are behaving in a way congruent with said glibertarian’s desires). Anyone else must be restrained if it’s convenient and/or profitable for the glibertarian.

          Or, in other words, IGMFY!

        • DrDick says:

          What do you mean “almost?”

        • Jeremy says:

          “It’s almost as if what they’re really interested in is the freedom to do whatever they want without *any* consequences.”

          I agree, but I’d put the emphasis on the “they.” Libertarians want the freedom for themselves to do whatever they want without any consequences. If I remember my Rand correctly, the way to tell who’s free of consequences can be determined by the angularity of their facial features. Howard Roark, for example, due to his “body of long straight lines and angles, each curve broken into planes,” can rape with impunity. Consequences for actions is left to the unwashed masses and their smooth features.

      • wengler says:

        Social? Such a word would be banned in a libertarian paradise. Only property has rights there. And property is not social.

  2. Dana Houle says:

    I mostly agree, but I think there’s still a role in the concept for bureaucratic entrepreneurialism and widespread complicity through small acts for large consequences. “Corporate dumping of toxic chemicals into rivers” often doesn’t begin as a deliberate decision by someone in a top position of authority who wants to maximize profit. It often starts out with some middle manager telling someone a bit below him to fix a problem that can’t be fix without addressing larger concerns, and because the larger problems aren’t addressed, someone disposes of their immediate problem. It can happen because a department in a facility loses out in the budget to some other department, and their safety infrastructure is not properly serviced. It’s often a series of these problems, that keep being avoided, OR, provide opportunities for someone to excel, but making their division seem more efficient or profitable or providing a model for behavior or management or whatever.

    In The Destruction of the European Jews, Raul Hilberg referred to the killing “process,” and he used mechanistic metaphors. The German military and bureaucracy were like machines, that didn’t require tremendous guidance from above, which is why there aren’t many written directives. But there was, in Hllberg’s view, tremendous creativity by individuals at every level of the process, including local rail officials. (It’s why Shoah starts with a train.)

    There’s often outright and willful greed and evil from people at the top of a corporation; Enron or Tyco fit that model. But there’s often problems throughout a bureaucracy, and dealing with corporations requires us to see the human agency involved, but we need to also see that the problems are not just greed but about responsibility and accountability in a large organization and that there are many motives than can result in horrible consequences.

    • Dana Houle says:

      BTW, one of our big problems is “corporations” are punished for malfeasance but too infrequently we don’t punish the individuals. It’s not just the whole “socialized risk/privatized reward’ thing, it’s also that if you’re a banker and your bank fucks tens of millions of people, it’s seen as a “corporate” problem and no individuals are held culpable.

    • Linnaeus says:

      I saw a good demonstration of this in a meeting I was in with a client to discuss a problem they needed to solve with respect to compliance with environmental regulations (though they weren’t dumping toxic waste or anything like that). But it was really interesting to see how the problem was rooted, in part, by uncoordinated decision-making.

    • Rhino says:

      Your post is the perfect example of why the concept of Godwin’s Law as an automatic thread ender is so ridiculous.

      The nazi genocide is the perfect example of the banality of evil. The majority of people involved in the process were just ordinary citizens, no more good or evil than any other tranche o their society. Yet without pressure or law to stop them, they created and perpetuated one of the greatest horrors in human history, and with very little fuss or furor.

      Sometimes in the small hours of the morning, I wonder which of the people living on my street would methodically do their jobs in a human abbatoir. On the bad nights, I wonder if I would.

      • LeeEsq says:

        Actually, I really disagree with this. Most of the perpetrators of the Shoah from the top to the botton were heirs to thousands of years of Christian Jew-hatred and were exposed to quite a bit of Jew-hatred’s 19th century mutation, anti-Semitism. They might not have been given much thought to this, they might have been moving towards post-Christianity but most of them were very familiar with a cosmology that presented Jews as annoying pests as best to cosmic evil at worse since birth. It was very easy for the Nazis to harnest this latent hatred towards the Jews in Europe and direct towards genocide.

        There is a tendency to see the Holocaust as something outside of the long history of Jew-hatred rather than as the culmination of something that began with Emperor Constantine. This is a mistake.

        • Dana Houle says:

          50 years of research on the Holocaust has pretty much refuted that theory. Lucy Dawidowicz pushed it early, craptastic political scientist Daniel Jonah Goldhagen pushed it and his career in the late 90′s, but the consensus among almost all historians is that historical antisemitism is an important part of the context and in some cases (like with the Ukrainians) was important, but for the most part was a secondary and insufficient cause.

          After all, at the turn of the last century Germany was far from the most antisemitic country in Western Europe (much less the East). No, the most antisemitic country was almost certainly France.

          • John says:

            I think it’s reasonable to suggest that the Holocaust was only possible because of the high level of latent anti-Semitism that most Europeans had in the early 20th century. But I think it’s problematic to refer to this as the driving cause of the Holocaust – that the Holocaust happened because Hitler “harnessed” their “latent hatred.”

            That does seem a lot like the Goldhagen thesis, which I have little sympathy for.

        • Rhino says:

          Exactly my point. Ordinary every day people were manipulated into evil acts.

          Or are you implying that ordinary Germans were champing at the bit for the opportunity to exterminate an entire people?

    • Erik Loomis says:

      Well, no question is truly black and white, that’s certainly true. And determining exactly where the line of real responsibility lies is quite tricky. At the levels of upper management though, I’d argue it’s rarely unclear.

  3. rea says:

    Neyer is right, up to a point, but draws the wrong conclusion. Corporations aren’t people–corporations are tools. So, yes, corporations are amoral, in the sense that hammers are amoral–a tool is not capable of morality. Humans aren’t amoral, though, and humans use tools, for good or evil purposes, while tools are incapable of using themselves. Mike Ilitch does not become any more or less moral simply because he uses a corporation he controls to do things, rather than doing them under his own name.

    • Dana Houle says:

      Worth noting, though, that Illitch’s team doesn’t support this bullshit. I would love to see if there’s a divide between teams owned by individuals/families vs teams owned by ownership groups and/or corporations. I suspect there is, and that the individual owners are less likely to push squeezing their employees for every penny than are the more amorphous owners.

      • rea says:

        Beat me to it by a few seconds. The Tigers actually seem to treat people fairly decently, on the whole.

        • Dana Houle says:

          Mike Illitch is one of the best ultra-wealthy people in America.

          Years ago I occasionally volunteered at a soup kitchen in Detroit. Part of the deal with volunteering there was you weren’t supposed to tell people where the food came from. Well, I’ll invoke a statute of limitations and tell you there was a lot from Little Caesars.

          He’s also very loyal to his players and to his employees. He takes good care of those who do good work for him.

          Illitch truly loves Detroit, and while his ego is obviously wrapped up with his sports teams, I believe that he also wants the Tigers to win as a gift to the city and the state.

    • rea says:

      Although in all fairness, I should point out that the Neyer article shows that Ilitch does not support eliminating pensions.

    • Scott says:

      What do you think the result would be, if instead of punishing the person wielding the hammer for a crime committed with it, we punished the hammer itself?

  4. Captain Bringdown says:

    Corporations are people. And they’re amoral. So I guess that makes them either infants or sociopaths.

  5. pete says:

    Erik is onto something here. The fact that large corporations are run by greedy, over-compensated individuals is a consequence of our current socio-political situation. The corporate system has in past coexisted with much lower income differentials and much more responsible attitudes to the “lower-echelon” employees (without whom there are no bosses, hence the quotes). I doubt we will eliminate corporations, but I am not totally without hope that we might reform them, or rather the laws that govern them.

  6. UserGoogol says:

    I think there’s an extent to which corporations do have a mind of their own. Sometimes large organizations make decisions which nobody within that organization is particular happy with simply because the rules and dynamics of the organization bind people’s hands. These rules can be changed, but that requires collective action which against requires dealing with the dynamics of the organization. So the organization gains a certain amount of autonomy from the human beings which constitute it.

    That being said, I also think it’s entirely plausible to attribute moral blame to such semi-autonomous entities. Human beings themselves are themselves collections of smaller entities, just those constituent entities are far simpler and the overall union is much more complicated. Corporations are amoral in the sense that a sociopath is amoral, but we still should feel comfortable blaming either of them.

    • Anna in PDX says:

      Yes, but calling the group dynamics of a group a “mind of its own” is an unnecessarily imprecise metaphor for group behavior. It’s almost magical thinking, this kind of weird focus on how groups behave as if they were Power Ranger Voltron things. They are groups, and group dynamics is a thing, but it’s not mysterious or mystical.

      I am not accusing you of doing this really, but I think if we started trying not to talk in this metaphorical way about corporate groupings, it would be better and people would start to feel more individually responsible for the things they do as members of that grouping.

      Gee, this is awful writing – how many times can I use the words “group” or “grouping” but I guess I will just leave it like that.

  7. wengler says:

    I think people like Neyer that make these sort of arguments don’t realize that organizations that do the exact same thing can act in very different ways based on who is making decisions at the top.

    Costco and Sam’s Club are in the same retail sector with the same member-based large volume-selling model, but one pays its employees top to bottom a lot more than the other. Because Costco’s head thinks it’s both the right thing to do and a great way to avoid employee turnover and shrinkage(retail term for lost inventory usually due to theft). Sam’s Club on the other hand, seeks to externalize every single cost they can.

    To be amoral means not being in control of your own choices due to ignorance or being so constrained by a structural pressures as to make it impossible to do the right thing. This is simply not the case.

    • NonyNony says:

      Because Costco’s head thinks it’s both the right thing to do and a great way to avoid employee turnover and shrinkage

      But see, if it were just the case that Costco’s CEO thought it was the right thing to do but he couldn’t point to actual economic reasons for it, then his shareholders would shred him.

      This is what (I think) people mean when they call corporations “amoral” – they mean that corporations “have to” make decisions without using the morality of the decision as a guide or a restriction or a justification for the decision.

      (And I know some family members who insist that Costco’s CEO is lying about the economic benefits for his company and is just lying about it to get good press and steal business from Sam’s Club. Which is weird, but what happens I guess when “shopping at Wal*Mart” is part of your “tribal identity”.)

      • But see, if it were just the case that Costco’s CEO thought it was the right thing to do but he couldn’t point to actual economic reasons for it, then his shareholders would shred him.

        Who are the shareholders? I dunno anything about Costco but there ARE companies that do things for reasons that don’t have to do with profitability. On the one hand public giving of one kind or another and on the other rewarding their executives with millions whether their companies fail or not.

        • NonyNony says:

          On the one hand public giving of one kind or another

          Public giving is assumed to be a “PR investment” – companies have to pay for advertising and lobbying too. If the “lobbying” in this case is the donation of a nice park to the city that they’re headquartered in, and that city has “coincidentally” cut them a sweetheart tax deal, well, shareholders understand back scratching.

          and on the other rewarding their executives with millions whether their companies fail or not.

          This is because shareholders are generally chumps who buy into the argument that if you want to “attract and retain good people” you have to “pay the going rate of the market”. It’s a long con on the part of the CEO class that the investor class is never going to figure out because it’s essentially an affinity con – something that Bernie Madoff went to jail for essentially because he was thinking too small.

          But note in BOTH cases the justification is economic, not a “we have to pay our CEO seven figures because how could he afford to raise a family on just six figures” “moral” argument.

          • Sherm says:

            This is because shareholders are generally chumps who buy into the argument that if you want to “attract and retain good people” you have to “pay the going rate of the market”.

            Actually, its really because the compensation decisions are made by fellow corporate insiders and the shareholders have no real ability to prevent the rape and pillage. You are otherwise nailing it on Costco and the corporate model.

            • NonyNony says:

              This is also quite true, and is also an explanation for why some investors who should have the clout to prevent the pillaging refuse to do so. Large institutional investors, for example, could (with some difficulty, admittedly) force CEO compensation to more reasonable levels in their investments if they chose to exert their influence.

              Of course, that would cause a nasty conversation about the large institutional investors’ executives and their own compensation levels. And nobody wants nasty conversations, so just pretending that the status quo is appropriate because THE MARKET HAS DECIDED is a much neater way to go.

          • Public giving is assumed to be a “PR investment”

            I understand the cynicism and share it, but it simply isn’t the case that all corporations do all they do to maximize profit under the threat of their shareholders. There are people running it and people do what they figure is the right thing to do. Certainly it’s often a horrifying depredation for the reasons you describe – obviously some larger corporations continue trying to destroy the world – but nobody follows the bible all day long and nobody satisfies the shareholders all day long either. Donations and honest-to-god good behaviour without tangible benefit to the bottom line can happen from time to time.

            • NonyNony says:

              Donations and honest-to-god good behaviour without tangible benefit to the bottom line can happen from time to time.

              I don’t actually dispute that this is possible, but I don’t actually have any examples of it in front of me. I’d love to have some because it would restore my faith in my fellow human beings.

              But any examples that I’m given, when you run them out, become not-so-obvious examples of spending a company’s advertising budget in a non-traditional way, “payola” to a community to get them to forget all the ways the company has screwed them over in the past, or things that are feel-good PR moves that ALSO will pay off for the company materially in some way.

              • I stayed in Cairo with a guy from the World Bank and we were talking about some corporate shenanigan and I said something like “Well, what’s to prevent them from doing X if there isn’t a law?”

                He said “There ARE codes of ethics.”

                At which point I laughed, but still…

            • Malaclypse says:

              I don’t actually dispute that this is possible, but I don’t actually have any examples of it in front of me. I’d love to have some because it would restore my faith in my fellow human beings.

              I’ve seen family-run corporations do this, where there is little separation between ownership and management, make decisions that, from a bottom-line perspective, made no sense at all, but were nevertheless Good Things.

              But I’m skeptical that this could happen in a non-closely-held corporation without the risk of an ugly proxy fight that would probably be lost.

            • Joel Patterson says:

              Publicly made donations are NOT charity. The dollars are exchanged for greater social esteem.

            • Uncle Ebeneezer says:

              This happens all the time in green energy companies too. The people who start and run the companies usually are there because they care alot about the environment and will often make decisions that are not the best for the bottom line if it accords with their principles.

      • wengler says:

        Back about 10 years ago, Costco stock was rated down due to the fact that financial analysts thought their employees were paid too much money.

        So Costco certainly took a hit for not being a good corporate retail citizen and toeing the line by paying their workers as little as possible.

        • NonyNony says:

          Exactly. And that was with data and evidence compiled by Costco showing that their ideas were sound and justified by their employee retention and low shrinkage rates.

          Imagine if it were just the CEO saying “this is the right thing to do so we’re going to do it.” He’d be out on his ass inside of a week.

      • (the other) Davis says:

        And I know some family members who insist that Costco’s CEO is lying about the economic benefits for his company and is just lying about it to get good press and steal business from Sam’s Club.

        What’s weird is that “good press” and “steal[ing] business” are in fact “economic benefits.” So said family members think they’re lying about the economic benefits in order to obtain economic benefits.

        • NonyNony says:

          Yes, basically. But trying to point that one out sailed right over their heads too. Because they don’t want to believe it.

          (Same family members will go on about how government spending didn’t end the Depression because massive government spending on WWII ended the Depression. You can’t argue with that, so I’ve stopped trying. They’re ignorant and proud and it just makes me sad.)

    • actor212 says:

      Ironically, Sam Walton would probably be spinning in his grave if he knew what his scions and outsiders have done to the employees in his company. Walton believed the folks on the floor were the most important people in the entire company, and so he introduced profit sharing, which was unheard of in retail.

      Still paid minimum wage, true, but he made it up each year. You could live on a Wal-Mart salary and bonus when Sam was alive.

      • Sherm says:

        Still paid minimum wage, true, but he made it up each year. You could live on a Wal-Mart salary and bonus when Sam was alive.

        When Kennedy extended the minimum wage laws to retailers, he schemed legally to avoid paying his workers the minimum wage. I imagine old Sam would be proud of what his company has become.

      • Joel Patterson says:

        In the 80s, a high percentage of Wal-Mart employees needed public assistance to make ends meet.
        Let’s not turn Sam Walton into something he wasn’t.

  8. Peter Hovde says:

    But don’t forget all those corporate leaders who go to D.C. and say: “Please save us from ourselves! We don’t want to do all these bad things, so regulate us so we can all stop doing them at the same time!”

  9. wengler says:

    I, of course, don’t know this for sure, but my guess is Mr. Neyer has a 401k and an implicit promise that markets will forever rise.

    It’ll be great as long as you don’t live too long.

  10. Data Tutashkhia says:

    Of course corporations are amoral.

    What happens is that the rules of the game, the competition, result in the most ruthless and conscienceless individuals succeeding, getting on top. But that’s just natural selection in a capitalist environment. Dog eat dog, and all that.

  11. John Glover says:

    The management of a corporation has a legal duty to maximize profits for its shareholders. They are not entitled to make moral judgments. There is nothing that they do that is not geared to the bottom line. They are money making machines, period.

    As an example, people think that corporate gifts and sponsorships of charitable activities are evidence of “good corporate citizenship.” They’re not. When a corporation decides to do this, it is essentially determining that the public relations value to their image outweighs the cost. And you can be damn well certain they have analyses to back up that conclusion. If that weren’t the case, management should justifiably be fired.

    The only thing that limits their actions is legality. You know as well as I do that the biggest corporations have armies of lawyers to help them exploit every loophole to further enhance profits.

    That’s why it’s so important that we have a livable minimum wage. That’s why it’s so important that we as a society not rely on their role as employers to provide basic benefits to our citizens. That is why we need strong regulatory agencies in place to police their actions. That is why it’s so important that crimes committed in their names be prosecuted. And there definitely should be situations where the penalty for violating the law should be revocation of their charters – the death penalty – and prosecutors should be willing to use it to keep them in line. It used to be that legality was an effective bar to corporation acts. Unfortunately, with TBTF, that is going by the wayside.

    I’ve been practicing as a corporate and tax lawyer for over 25 years, and I have never seen a situation when a corporation does something out of the goodness of its heart. The only limitations on their acts are strict enforcement of the law.

    • mds says:

      … Okay, so corporations are amoral, thanks to the rampant immorality of those who created the legal framework for corporations? I can accept that.

    • Erik Loomis says:

      “The management of a corporation has a legal duty to maximize profits for its shareholders. They are not entitled to make moral judgments. There is nothing that they do that is not geared to the bottom line. They are money making machines, period.”

      The fact that they have this legal duty shows that humans chose to create this structure.

      We can also change the law and take away this legal obligation.

      • John says:

        Yeah, I’m not sure why it’s taken for granted that it’s a good thing.

        I think corporations ought to be transparent with their shareholders about what they’re trying to do, but the idea that they basically have a legal responsibility to value short term profits over all other factors seems seriously problematic.

        • Anonymous says:

          I don’t believe this “legal duty” exists in Canada or other countries. So we certainly could change the law and make it a legal duty for corporations to be “pro-social” in everything they do.

          Also both advertising and charitable giving are tax deductions and come out of the public purse, in a sense.

      • rea says:

        “The management of a corporation has a legal duty to maximize profits for its shareholders. They are not entitled to make moral judgments. There is nothing that they do that is not geared to the bottom line. They are money making machines, period.”

        You know, I don’t think that’s the law at all. The management of a corporation is most certainly entitled to behave morally.

        • Sherm says:

          Granted, the fiduciary duty to profit has been overstated here by me and others, but not by much. It is pretty damn axiomatic that officers and directors owe a fiduciary duty to act in the common good of the corporation and its shareholders, and no one else, and that their duty to shareholders arises out of the shareholders’ expectation of profits. Yes, corporate officers and directors can act morally, but they have no legal duty to do so. Their only legal duty is to act in the best interests of the corporation and to make profits for its shareholders. Morals are irrelevant.

    • Harold says:

      I don’t believe this “legal duty” exists in other countries, such as, say, Canada. So (theoretically) it could easily be amended here to require corporations to be pro-social in all their actions. Regulations stipulating the ratio between pay of CEOs and employees could also be regulated with pro-social consequences.

    • Walt says:

      Management does not actually have a legal duty to maximize the profits for shareholders. This is a myth.

  12. divadab says:

    Well put, Erik. Every corporation is a kingdom with a king. Feudal and hierarchical in nature. And having a non-virtuous cardinal aim: Desire for Profit, which is defined as sinful in pretty much every ethical and moral system, including our own (Thou shalt not Covet is in the big law tablet; also greed is specifically a sin in Catholic and Episcopal doctrine).

    such kingdoms and duchies are supposed to be regulated by our government, not own it.

    • divadab says:

      And let us not forget a later dispensation – in the words of JC: “It is harder for a rich man to enter the kingdom of Heaven than for a camel to pass through the eye of a needle”.

    • Dave says:

      Well, that couldn’t be much more wrong on the history of corporations if it tried. They exist as mechanisms to extend legal protection to groups of people who emphatically are NOT the feudally ‘privileged’ – quite the opposite. The fact that that protection is in the form of ‘limited liability’ for the shareholders, not anybody else, should not obscure the fact that corporate existence is, historically, AGAINST the ‘feudal’ social hierarchy.

      • Bill Murray says:

        but that wasn’t what was argued. The argument was that a corporation is its own feudal hierarchy, not that corporations grew as part of the existing feudal hierarchy

        • divadab says:

          Thanks, Bill. And as globalization proceeds apace, the sheer span of control of the new feudal lords is growing as the number of kingdoms decreases (i.e. as the corporate consolidations reduce the number of companies in each industry until we live under a series of oligopolic markets.)

          Corporate entities are organizations of men. The old rules of human relationships continue to apply. For example, do you doubt that the corporate agricultural system is based on plantation slavery, even in 2013? What are “illegal immigrants”, all 12 million of them, but a class of slaves?

          Thus will the empire crumble, as those before it, through destruction of its yeomen through the importation of slaves by greedy masters.

  13. Sherm says:

    Neyer is right (as usual). Corporate officers and directors owe their fiduciary duties to corporate shareholders, and not to society as a whole. As such, corporate decisions are made with profits in mind and are inherently amoral in that right or wrong is entirely irrelevant to the decision-making process. If a corporation could maximize profits by adhering to moral principles, it would. Conversely, if a corporation could maximize profits by violating moral principles, it would.

    • JRoth says:

      That whole “fiduciary duty” thing was retconned in the ’70s to justify rapine; it certainly isn’t found in the British common law from which American corporations derive their origins.

      • Bruce Baugh says:

        It’s basically a peer of the idea that the “biblical view” of abortion has always been complete opposition. (Cf. Fred “Slacktivist” Clark, “The ‘biblical’ view that’s younger than the Happy Meal“.) Unsurprisingly, there’s overlapping patronage.

      • Erik Loomis says:

        Exactly. These fiduciary duties are not gravity. They are laws that were created by people and can be repealed by people. They have histories and they change over time.

        • Malaclypse says:

          Beyond that, “fiduciary duty” is not simply to shareholders. I have a fiduciary duty to owners, yes. I also have fiduciary duties to anybody currently in our 401(k) Plan. I have a fiduciary duty to properly segregate and pay trustee taxes to various governments. Who fiduciary duty is owed to is not something that should simply be defined by the glibertarians of the world.

        • Sherm says:

          Apples and oranges. The question here is whether Neyer was wrong in stating that corporations are amoral rather than immoral. You are addressing the morality of other actors and the society which permits corporations to act as they do. Different questions, unrelated to Neyer’s conclusion.

    • Brandon says:

      That it holds to one particular core principle does not make all of its decisions to adhere to that principle amoral.

  14. wengler says:

    It should be noted that MLB isn’t really a corporation, but rather a professional baseball cartel that governs and coordinates the actions of its 30 constituent members.

    There’s no investor ‘amorality’ argument to be made, since shares aren’t traded publicly or privately.

  15. mtraven says:

    For corporations to be immoral actors, you have to accept that they are persons (as several other commenters have suggested). Or, you have to have some theory about how non-person organizations can be moral or immoral. Or, what you really mean is that corporations encourage and enable immoral human acts and actors (eg, they let greedy people be even more greedy).

    All of these are interesting and problematic possibilities, and I don’t think we have very good language for discussing them. (And sorry to blogwhore, but I was just on this topic)

    • divadab says:

      good point, Mtraven. Perhaps it’s that the cardinal “virtue” of the corporate entity is non-virtuous? That is, desire for profit. Greed is a sin in most moral and ethical systems, no?

      • John Glover says:

        It’s not a “desire for profit.” Profit is their reason for being. They only exist to make a profit.

      • S_noe says:

        Perhaps it’s that the cardinal “virtue” of the corporate entity is non-virtuous?

        I’d go with that as a start.
        But even accepting greed as a legitimate motive – my experience working for public corporations convinced me that (absent the kind of exceptional leadership atypical of public corporations) they are structurally disinclined to be capable of anything like rational long-term decision making. (I.E., its all about the share price in the near term – longevity be damned.)

        Some kind of long-term thinking’s probably a prerequisite for acting “morally,” or at least not amorally or immorally.

        • divadab says:

          Strange incentives are produced, it seems, when an individual’s time scale for profit is short-term. COrporate officers are bonused based on profit. If your longevity in a particular job is 2-5 years (like most corporate postings), your incentive will be to always take the immediate profit over a longer-term strategy that might yield more profits over the longer term for your successor to profit from!

          This is an issue of structurally poor management. Like the federal political system is structurally corrupt.

    • Brandon says:

      Corporations are not moral agents in and of themselves–they’re not agents at all. The people that make decisions and take actions as a group organized as a corporation are moral agents.

      • Anna in PDX says:

        This is a much better way of saying what I was trying to say in a nested thread higher up. And you only used the word “group” once – well done!

  16. DrDick says:

    No. As legal abstractions they have no agency. They are run by immoral monsters for the most part, however.

  17. cpinva says:

    don’t be an idiot, of course corporations are amoral. a corporation is simply a legal entity, not a sentient being, so it can’t possibly be anything but amoral. the people that run the corporation, on the other hand, can be moral, immoral or amoral. they make the decisions, not the “corporation” and, per adam smith, those people will make decisions they perceive as being in their own best interest. if they happen to align with other people’s interests, great. if not, oh well.

    • cpinva says:

      rats! what would it cost for an edit key on here?

      neyer is wrong as well, ascribing strictly human traits to an inorganic entity. this is the kind of “thinking” that gave us Citizens United, from people who should know better. it’s the kind of thinking that allows the people running the corporation (and making the decisions) to escape responsibility for their actions, by attributing those actions to the corporation.

  18. Chet Murthy says:

    Erik,

    I wonder if you have any thoughts on the history of the corporate barrier, and specifically whether there’s any political thought around “corps have responsibilities in exchange for that barrier”?

    • cpinva says:

      the “barrier” you speak of is the “corporate veil”, which shields the sh’s from personal financial liability, in excess of their investment in the corporation. it also, to an extent, sheilds the corporate officers from personal liability, for acts of the corporation. however, the “veil” can be pierced, for illegal acts, committed by sh’s or officers.

  19. actor212 says:

    Morality has no business in American corporatocracy.

    Capitalism, where workers own the means of production and the capital, those folks would give a rat’s ass about their neighbors and employees. These folks? Not so much

  20. sleepyirv says:

    Is Rob Neyer politically progressive? Like his mentor Bill James I get a strong “political illiterate who loves counter-intuitive arguments for their own sake.” He wrote some stupid things about labor after Melvin Miller’s death. And I remember being pissed off when Neyer goes off non-baseball tangents before, but I can’t think of any specific articles at the moment.

    Asking counter-intuitive questions about something you understand deeply like baseball is both useful and likely to anger the conventional wisdom. While in politics, it tends to make you sound silly AND like any old pundit. Mostly because politicians need camouflage for their stupid ideas “Cutting taxes will raise more money for the government!” doesn’t sound right but it wouldn’t take you too long to find some unconventional thinker to argue the case just to buck tradition/ show how smart they are

    • JB2 says:

      I was just going to say the same thing. I’ve enjoyed Neyer’s baseball writing for a long time, but I’ve never thought of him as particularly progressive.

      And I agree on James, as well – his true crime book had many interesting and well-researched stories about the various crimes. But most of his attempts to draw larger meanings from them were idiotic.

    • I’m something of a fucking huge Miller supporter, but that does not strike me as saying “stupid things about labor.” If you read between the lines, it seems more like a sort of lament that owners and commissioners have been elected to begin with.

  21. S_noe says:

    I have no beef with the amoralists or immoralists. Both positions are good ways of approaching the problem of corporate malfeasance/stupidity/whatever.

    My totally individual approach, based on a lifetime of corporate employment? Corporations are LOVECRAFTIAN ENTITIES. Neither immoral nor rationally amoral. They operate according to a logic beyond our understanding. They care not for their employees, investors, customers, OR FOR THE PLANET THEY CURRENTLY INHABIT.

  22. Brandon says:

    “Mankiw Morality” seems essentially correct while also being an unintentionally damning critique of unregulated capitalism.

    • John Glover says:

      I always thought it funny that a entity that only exists because a statute says it does is somehow supposed to be free of statutory restrictions….

      I’ve never figured out how libertarians get around this one.

  23. blondie says:

    I suppose you could say the same of sociopathic serial killers. They aren’t really immoral, but just amoral. So that’s okay, then, ‘sallgood.

  24. Njorl says:

    One thing to note: NFL teams are not publicly held corporations. There is one individual who is personally responsible for anything an NFL team does. I believe they set it up so that no team could fall back on “duty to shareholders” as an excuse to backstab the other owners, but as a byproduct, they can’t make that excuse to labor or consumers either. Well, they can’t make that excuse honestly.

    • Thlayli says:

      With one exception, of course.

      Al Davis engineered his takeover of the Raiders in such a way that he wound up with the title “President of the General Partner”. I’ve always loved that.

  25. They are controlled by people who are seeking to maximize wealth at the top of society.

    Oh? You really think when a tester says, “hey, we have to hold back this software release that was supposed to go out tomorrow because we found a bug that makes the product unusable in 90 percent of cases,” his peers say, “The purpose of this company is to maximize wealth for its owners, so the original schedule will be met”?

    If so, please tell me where these people are, so I can avoid them. (Can you give me a hint? Are they in Rhode Island?)

  26. Ken says:

    There seems to be a general consensus among the comments that yes, corporations are not bound by any moral principles. Which presumably means none of us are going to be called as expert witnesses by Hobby Lobby et al in their lawsuits, arguing that corporations are deeply moral institutions whose religious freedoms are violated by the healthcare laws on birth control.

  27. Not literally as a rule. Any more than corporations (or the people in them) literally aim to move wealth to the top of society. Or for that matter than corporations reliably move wealth to the top of society without intending to. But people who became convinced they were supposed to aim to move wealth up (rather than actually doing their job), to get with the program, might be more inclined to ignore testing results that indicated problems.

  28. djillionsmix says:

    basically:

    greed isn’t good.

    greed is irrational and destructive.

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