Friday, July 15, 2011

Sentient Corporations

Whenever corporations pollute the environment or subvert the rules or outright cheat and lie to make a profit, we (the public) are pissed off. Not just because we’re getting screwed by a corporation, but because we feel a sense of moral outrage. They’re pumping toxic chemicals into rivers! Polluting the atmosphere! Cheating and losing millions of investors’ dollars! Why shouldn’t we be outraged?

Well, we shouldn’t be outraged because we shouldn’t be treating corporations like people in the first place. They have different goals, and expecting them to act like people and obey moral and environmental rules will disappoint you every time.

Here’s how I see it. In a capitalist society, there is one goal animating a corporation: Making a profit. Everything else is secondary or a subset of this goal. Without money, the corporation will go bankrupt and “die”; it follows that environmental and financial regulations, to name a couple, tend to stand in the way of this goal. That’s why corporations regularly subvert them or engage in underhanded tactics.

I find it makes the most sense if you think of a corporation as a sentient organism, that needs money the way we need food or water. And unlike with humans, the marginal value of money does not decrease as its gained. The more money a corporation has, the more money it wants.

Seen from this perspective, it’s easier to understand why corporations break the law. A CEO who pushes fracking policies that the public deems unsafe is only acting in his own best interests. And the thing about this system is, as long as the corporation is acting in its own best interest, it supercedes the opinions of people within the corporation. Individuals may embezzle, steal, act in moderation or otherwise not work towards the goals of the corporation, but these will eventually be found and replaced with people who will.

Corporations are doing what they have to do to survive. That’s not to excuse the scandals that seemingly appear every other week, concerning the many misdeeds of Company Z or Corporation Q, but rather to understand them. Who knows: maybe understanding them is the first step towards designing regulations that actually work.

(Hat tip: Charles Stross and Accelerando.)

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