Introduction to Corporations

INTRODUCTION TO CORPORATIONS

By Roland Watson

Throughout the website I have made numerous critical comments about the consequences and costs of corporate behavior. In this series of articles I will organize, and expand on, these comments, and begin to consider possible activist responses. I will do this by reviewing in turn the various publics and environments on which corporations have an impact, and also their broader role in shaping the tenor - the social harmony, or lack of it - of our times.

But first, I need to make a few preliminary remarks. As we saw in the last section, corporations are the vehicle by which capitalism is implemented; indeed, in modern society they are synonymous. And, as we have seen, a corporation's purpose or goal is solely to earn profits. Furthering social welfare forms no direct or even implicit part of this purpose. Any real, tangible contribution by corporations to social welfare is only an indirect and often unintended outcome of their quest for profits.

Of course, you might argue with this. You could say that corporations function as follows:

- Humans have needs.

- Corporations evaluate how those needs can best be satisfied.

- They then provide the necessary goods and services.

- And the needs are satisfied.

I would agree that in many cases, such as in the U.S. in the decades following World War II, this is, or was, how the system worked. (It actually still works this way with industrial goods, in other words, with sales between corporations.)

Unfortunately, the system has evolved. Now it works as follows:

- Corporations have needs: to make profits.

- They evaluate which goods and services will generate the greatest profits.

- Through behavioral conditioning, foremost via advertising, they seek to manipulate the public to desire these goods and services.

- The public, unaware of form and its consequences, is thus manipulated.

- The corporations earn their profits, and hence their needs are satisfied.

In fact, going so far as to satisfy human needs may be contrary to a corporation's purpose, since it is better for them if they can habituate us to a series of deals that give us almost, but not quite, what we actually want. As an example of this, consider quality versus price. We need long-lasting quality goods, but in most cases corporations have persuaded us to focus on price, to accept cheap, shabby goods, with programmed rapid obsolescence, so that we must buy from them again and again.

Also, corporations are subject to markets, which may seem to be the same thing as being subject to customers, but which in a subtle yet important way is not. The underlying idea of capitalism is that markets will solve all problems, but of course they don't. Markets, and hence corporations, prioritize problems on the basis of their profit potential. They ignore those with marginal or risky returns, or problems that, although important to many people, offer no return at all.

In the section on nations we saw that government should be slimmed down and that all functions not essential to its mission be privatized, i.e., that they be sold to corporations. But, isn't this a contradiction? Taking such functions out of the hands of government, where they receive at least some oversight to ensure that the needs of the public are considered, and instead giving them to corporations, which often operate as if they exist only to exploit us: how can this be the appropriate course of action?

The answer, the resolution of the contradiction, is that this can work if the purpose and responsibilities of corporations are reshaped to conform more closely to our real human needs.

The choices appear to be either a socialist system, as in Scandinavia, where everyone pays high taxes and the government's responsibilities are greatly increased, or the corporate/capitalist system. I am opposed to the first, on the aforementioned practical grounds, but also because it constitutes greatly increased form: giving a centralized government extensive rights to tell us what to do. But with corporations, we can tell them what to do. They are not people, so this is not form. They are simply legal entities. We retain the power, even if at the moment we do not realize it, or exercise it. But we still have the power, and we can - we must - use it. We can tell corporations what they must do. They are our creation and we can dictate to them, either by changing their legal foundation or by forcing them to adapt to our voluntarily chosen (as in the product of will) consumption patterns.