Saturday, January 8, 2011

Corporations and the Federal Government's Bass Ackwards Priorities

If there's anything in this world that should be regulated, it's corporations. If there's anything that centralized government should do, it's protect the common folk from these monstrous behemoths. Some might think that's blasphemy coming from a free market enthusiast like I am. That's because for decades, perhaps even centuries, people have been misinformed, perhaps deliberately, as to the nature of corporations. Many people have come to believe that to be pro business, pro free market is tantamount to being pro corporation. This is not so. In fact, I believe just the opposite. I think that being pro corporation is being anti business. I think that being pro corporation is being anti free market, in fact it's tantamount to being anti freedom in general.

What many don't realize, or don't think about, is that corporations are creatures of the state. They are an invention of the government. Without the state, they would not exist. What they have done is to create an entity that has all the benefits of a business, but relieves those involved of any of the risks. They have created, in essence, a privileged group. Even in law, corporations have been granted the rights of individuals, yet because of their makeup they aren't held accountable for their actions as individuals are.

Corporations are able to operate with the blessings of the state. If they do something wrong, no one is held responsible. British Petroleum and all the corporations involved with the Deepwater Horizon oil spill are a great example of this. For all the damage they've done to the Gulf of Mexico, they have hardly been punished. To describe their punishment as a slap on the wrist is to describe it as a far sterner punishment than they actually received. Eleven men died on that platform and no executive, no one near the top or making command decisions, have been held to account. No one has been brought up on manslaughter, or even negligence, charges. All the money spent on the clean up, which is of dubious quality, and on litigation avoidance schemes has come from the company. No individuals at the top have been forced to spend one cent of their own money for their lack of concern with what their own company has done to nature and humanity. Worst of all, these same elite, unethical, un-empathetic individuals are still in charge and their corporations are still operating.

Consider for a moment what would have happened if John Doe's oil company had owned the Deepwater Horizon rather than BP and the same scenario had unfolded. John Doe would have been ruined. His oil company would have gone out of business. Likely any companies associated with his endeavor would have also suffered greatly. If they and their executives were held accountable they should have had at least portions of their personal wealth taken to make things right with those harmed. If they had been unable to contain the spill as BP was, then those who were going to be directly affected would have acted to minimize the damage. This might well have been more effective than what actually happened, as those who wanted to take action were told not to and to let BP handle it. That attitude may well have ended up causing damage that could have been avoided had other entities been allowed to help.

There is an argument to be made in this case that modern corporations have too many shareholders to hold everyone responsible for such an incident and that those shareholders are punished by a drop in the stock price. Well, I suppose that's true in a sense. Yet this is the core of the problem. These people are protected by law. The only risk they're taking is that their stocks will lose value. The only risk an executive has to worry about is that his bonus at the end of the year will be less. It is these people, the executives and the decision makers more than the general investors, who should be held accountable for such happenings. As it stands, it is the common folk, the fishermen and others who make their livings from or consume the products of the gulf, who end up shouldering the burden. They had absolutely nothing to do with causing the disaster, yet it is they who are punished for the mistakes of others.

This scenario has happened often. Corporations are protected from the common folk by the legal monopoly on force that is government, while the common folk have little to no protection from the crimes committed by corporate entities. Just the opposite should be true. It is highly unlikely an average Joe like you or I will ever be able to cause great harm to any corporate entity, yet some multi national corporation can cause you, your family or your neighbors great harm with impunity through some action they know to be risky or possibly damaging. The idea behind the federal government of the United States of America was to protect weak individuals from such powerful forces such as over zealous police states and extremely wealthy corporations. This idea has been apparently forgotten in all the propaganda of providing security.

In the past, other governments had no qualms with allowing powerful and wealthy entities to run roughshod over the common folk. In many cases, especially in Western European monarchies, the government was actually the entity doing so and they would do so for their own benefit. Back then, governments felt they owned the populations on their lands and would claim the products of their serfs' labor as their own and use such products in trade with other governments. It was this type of system the founding fathers of our nation were trying to get away from. It is such a shame we have fallen so far from those original principles. It is a greater shame that the world seems to be devolving back to a feudal type system through insidious manners.

If anything, our federal government should be taxing and regulating corporations, particularly large multi national corporations, and leaving the rest of us alone. To those who say that this would mean higher prices for consumers, I say it would open up opportunity for small businesses who are willing to take the risk to compete with the large mega corporations to offer better products for a fair price. To those who say this would chase the corporations from our shores I say fine, let them run. I have confidence that American entrepreneurs would pick up the slack and provide the goods and services that were in demand. The bass ackward federal government has done just the opposite for decades, taxing and regulating the little guys and letting the corporations do as they please while providing corporate welfare. Look where that's landed us.

I believe the United States should lead by example. Let us either hold the mega corporations accountable for their misdeeds or tax them heavily for the privileges granted to them through the federal government and let's see the how long it takes before the competitive nature of humanity brings prosperity back to these shores. It was John D. Rockefeller who claimed that competition was a sin, I think that competition is a blessing for all and monopolies are a curse. If there were no government sanctioned unfair advantages to corporations it wouldn't be long until there would only be businesses competing in the marketplace that could be held accountable rather than being able to fall back on government legalities and regulations that let them off the hook.

As I stated earlier, I am not anti business. I want businesses to open in the United States and provide jobs, goods and services to our economy. I want our economy to prosper. I just believe that incorporating and granting privileges to powerful entities is the wrong way to go about it. I am tired of the unfair privileges I see granted to the mega corporations. I want to see businesses operating in such a way that those who run or own them are held liable for any mistakes made.

I believe that if these entities were forced to operate without the advantages given to them by the often convoluted regulations that usually favor huge, wealthy corporations the market would soon provide us with more choice and better services at cheaper prices. I believe we would see less damage taking place and would be better able to vote with our dollars which businesses would survive and which would fail. Perhaps I'm wrong, but as it stands I think we can easily see where the mistakes have been made. Hindsight is 20/20. We've been doing it their way for a long time now and it's led us down a path to economic ruin. It's time to try another way, a better way.

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