Updated: 12/27/05; 7:59:28 AM.
Connectivity: Spike Hall's RU Weblog
News, clips, comments on knowledge, knowledge-making, education, weblogging, philosophy, systems and ecology.
        

 Tuesday, March 1, 2005

Summary:  Corporations are not accidentally amoral. It's a pathology built into their structure.
Notes From an audio recording of an Interview of Joel Bakan (Professor of Law at UBC , author of Corporations: The Pathological Pursuit of Profit and Power ) , other notes taken from a thesis written by one of Prof Bakan's students.

Corporations are institutions which are, by reason of their structure and the laws associated with their structure,  constrained to operate always and only for the benefit of the corporation. The corporate structure appears toc orrupt people who are under other circumstances 'good'. This corruption leads corporations into bad citizenship. Thus, it is argued, governments must oversee and constrain the corporations; this need was understood when corporations were first created in N. America in the vary late years of 18th century. They were not allowed to grow beyond a certain size or  to own other corporations and their capitalization was limited)
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What is built into ALL corporate charters, into corporate law, even, is that they are to operate always and only for the benefit of the corporation and its shareholders. This corrupting influence must be countered by the terms underwhich it is supervised and chartered by the state. Otherwise, and as is the present case, particularly in large, transnational corporations the result is a form of psychotic behavior.
    • Failure to conform to social norms with respect to lawful and ethical behaviors. (Often this is associated with making others pay their expenses. Examples of exporting expenses: exporting jobs to malaysia where workers get 10 cents an hour, failing to do proper environmental cleanup and polluting land that is not in the corporations portfolio.


    • Reckless disreregard for safety of others


    • Deceitfulness: repeated lying and conning others for profit


    • Incapacity to maintain enduring relationships


    • Callous unconcern for the feelings of others


    • Incapacity to experience guilt


    • Thus: diagnosis of personality disorder = psychopath (World Health Organization 1CD-10, Manual of Mental Disorders DSM-IV)



In Taking Charge--Corporate Charter Revocation in Canada Read Gil Yaron's careful analysis of the charter revocation strategy. (His Masters Thesis is here and a summary is here).

Excerpts(emboldening is mine, SPH):
"All corporations were once considered public institutions. The act of incorporation was a privelege (not a right) granted for a specific purpose, such as building a bridge or running a ferry. Corporations had a limited amount of capital and a finite existence. Corporations were fully liable for their actions. And where a corporation acted against the public interest or abused its charter, it could have the charter revoked. The power of the state (and in some cases, of citizens) to revoke the charter of a corporation reminds us that the corporation is not an end in itself, but rather an institution created by citizens for citizens." [p 2 of summary]

"More recently, the [sigma] Attorney General of New Yoyrk State, Dennis Vacco, initiated proceedings to revoke the charters of two tobacco lobby organizations, the Tobacoo Institute and the Council for Tobacco Research, on the grounds that they (1) obtained their charters through fraudulent misrepresentation and concealment of material facts; (2) transacted their business in a persistently fraudulent or illegal manner; and (3) exceeded the authority conferred upon them by law and abused their powers in a manner contrar to the public policy of the State. Citing numerous decisions in support of revocation where there was demonstrated a "grave, substantial and continuing abuse, involving a public rather than a private right, Crane J. of the New York State Supreme Court on October 21 1998, appointed receivers for both groups, ordered each group to file a $500,000 bond and provide a statement of assets and liabilitiess, names and creditors and claimants and all other information relevant to dissolution procedings. [pp 3-4 of summary]

"Despite its profound implications, corporate charter revocation is admittedly not a compete response to tghe issue of corporate power and influence in today's society. Corporate charter recocation does not challenge the legitimacy of the corporation itself to make decisions without input from affected individuals and communities. Corporate charter revocation does not answer this systemic imbalance within our society, but merely provides one remedy to challenge the worst cases of corporate crime and to place some meaningful deterrents on corporate behavior. [pp 5-6 of summary]
On the whole, he found, that very much still needs to be done to establish substantial precedent for charter revocation. In the US only in the case cited was this measure successful. Five other compelling cases died on or near some state Attorney General's desk.

The author suggests that attempts to build a base of precedents should not focus on transnational companies (Union Oil, in California, Weyerhauser in Washington and both involving industries with tarnished public images)and should focus on issues that are of clear concern to the state, in particular, to the Attorney General of the state where wrongs have been done. In sum, the author noted the need to focus at first on small, local institutions with minimal community presence in order to ensure minimal political fallout. What is ultimately required is that "those seeking to bring such petitions broaden their strategies [sigma] [to consider, in addition to the wrongs done] the social and political context in which the corporation operates"(p 142 of the full thesis).


Summary: Reality Check: when almost all public communication of any sort (see below) is controlled by corporations, where are we going to have the FAIR discussion of the accusation that corporations are monopolistic and unresponsive to public needs and public measures of ethical conduct? Where would any accusation concerning corporate existence get a fair public hearing? Weblogs, right? How long will that continue?


According to Bernie Sanders, Vermont representative in US Congress, "[if you are reading something on paper, listening to radio, watching a television or movie screen] Five Corporations Control The Majority of What You See, Hear and Read ". Those corporations are: TimeWarner, News Corp, Viacom, Walt Disney and General Electric. We've come a long way since corporations were created and dissolved at the discretion of state governments. A long way since the time when their sole purpose was to achieve the fulfillment of some limited public need and when profit was not a consideration.

As an illustration of breadth of control in the hands of one corporation we can look at this Viacom analysis done by Oligopoly Watch 21 months ago. (See Sanders' site, above, for Flash-based analysis of the others.) As the table illustrates, the span of ownership, and control, is incredible. 

CategorySubcategoryPropertiesNotes
TelevisionChannelsCBS, BET, CMT (Country Music Channel), Flix, MYV), MTV2, N, Nickolodeon, Nick at Nite, Noggin, Showtime, New TNN, Sundance (part), The Movie Channel, TV Land, UPN, VH1, Game One (50%, France), Comedy Channel (recently bought remaining 50% from Aol-Time-Warner) CBS usually #1 network MTV seen in over 25 countries; Nickelodeon in over 15 countries,
CBS StationsIn Austin, Baltimore, Boston, Chicago, Dallas, Denver, Detroit, Green Bay, Los Angeles, Miami, Minneapolis, New York City, Philadelphia, Pittsburgh, Salt Lake City, San Francisco
UPN StationsAtlanta, Boston*, Columbus, Dallas*, Detroit*, Indianapolis, Miami*, New Orleans, Norfolk, Oklahoma City, Philadelphia*, Pittsburgh*, Providence, Sacramento, San Francisco*, Seattle, Tampa, West Palm Beach* = Second channel owned in market
Other stationsAlexandria (MN), Walker (MN), Escabana (WI), Washington (UT), Los Angeles*2003, Viacom bought KCAL-TV, last independent station in LA
AffiliatesCBS (around 210), UPN (around 80)CBS has one affiliate in Bermuda
Film & TelevisionStudiosParamount Pictures, Paramount Television, Paramount Home Video, CIC Video (part), MTV Productions, Nickelodeon Studios, Spelling Entertainment (part), Republic Entertainment, Wilshire Entertainment, EYEMARK, Big Ticket Enterprises, Worldvision, Hamilton Projects, King World
LibraryParamount Film Library 2,500 films
Video RentalBlockbuster Video, Viacom Entertainment Stores, Blockbuster MusicBlockbuster = #1 Video chain (over 8,500 stores worldwide)
TheatersFamous Players (Canada, 103 locations, 853 screens); United Cinemas International (joint venture with Universal, 120 theaters, 1,092 screens in 11 countries)
DistributionUnited International Pictures (joint venture with Universal), distributes films in over 250 countries
Amusement ParksParamount ParksIn CA (2), NC,NV, OH, VA, and Ontario
PublishingPresses and ImprintsSimon & Schuster, Scribners, Pocket Books, Washington Square Press, Anne Schwartz Books, Archway, Minstrel, Lisa Drew, Fireside, The Free Press, Touchstone, BET Books, MTV Books, Nickelodeon Books, Star Trek
RadioCBS Radio/Infinity BroadcastingAtlanta (3 stations), Austin (4), Chicago (6), Cincinnati (4), Cleveland (4), Columbus (3), Denver (3), Detroit (6), Fresno (7), Greensboro (3), Hartford (3), Houston (2), Kansas City (4), Las Vegas (6), Los Angeles (9), Memphis (2), Minneapolis (4), New York (5), Orlando (3), Philadelphia (5), Phoenix (3), Pittsburgh (4), Portland, OR (5), Riverside (4), Rochester (4), Sacramento (6), Saint Louis (3) San Antonio (2), San Diego (2), San Francisco (7), San Jose (2), Seattle (5), Tampa (5), Washington, D.C. (4), West Palm Beach (5)#2 radio network; one of top three stations in most major markets
Radio productionWestwood One,Metro Networks, Shadow Broadcast Services, SmartRoute Systems largest U.S. supplier of traffic, news, sports, and weather, on over 3,000 stations
MusicPublishingFamous Music100,000 song copyrights
New MediaPrincipal web sitesBET.com, CBS.com, CBSNews.com, CBSHealthWatch.com (part), MYV.com, Nickelodeon.com, SonicNET (music site), VH1.com
Viacom Interactive VenturesHollywood Media, iWon, MarketWatch (part), Medscape, MovieTickets, SportsLine (part)
MarketingBrand ManagementViacom Consumer Products
Key Brands, FranchisesStar Trek, Jeopardy, Wheel of Fortune, Entertainment Tonight
Outdoor AdvertisingTDI Worldwide, Viacom Outdoor Systems, Infinity Outdoor#1 billboard company in the U.S. and Europe, 100,000 bulletin, poster, mall, and transit advertising display faces in North America and over a million worldwide.

Naturally what we now"get" from these communication organizations is linked to corporate profit rather than world, ecological, national, local or personal need. This linkage -- to needs-- used to be central to incorporation. For the first 100 or so years of our republic corporations were created to serve needs and dismantled after that need had been addressed. Dissolution also occured at governmental discretion when, for example, a corporation was viewed to be violating terms of their charter.

In the present day world, each of these giant communication corporations has been represented as an oligopoly , i.e., a monopoly without the regulation. Each of these corporate entities is, in terms of accountability, a "person" and, because of US Constitutional protections for personal freedom, nearly* unassailable. Public utility no longer is central.

Here's how the workings of oligopolies have been described:


Oligopoly and the market



In the ideal free-market economy of our politicians, every product has an equal chance to make it big. But in the real world, entrenched forces combat equal opportunity. The market in most sectors is not a democracy but an oligopoly. Even the Internet, which was supposed to "change all that" is in danger of becoming still another tool that mostly enhances the power of the oligopolies that rule major markets.



In many developed market sectors, two or three players now command over 75% of the total market. Just as Coke, Pepsi, and Cadbury-Schweppes dominate soft drinks, so too so Budweiser, Miller, and Coors share the American beer market, while Nabisco, Keebler and Pepperidge Farms are the masters the cookie industry. (Typically enough, Sunshine Bakeries which used to be number three, was acquired by Keebler in 1996. Keebler in turn was acquired by Kellogg in 2000. Nabisco is a division of Kraft/Philip Morris and Pepperidge Farm is owned by relatively minor player Campbell.)

This tendency toward oligopoly is accelerating, as fewer and fewer companies grapple to control the limited mind space. In the book industry, historically an arena of many small and mid-sized competitors , there are now far fewer major players, both on the production and distribution side. A few large conglomerates (Bertelsmann, The News Corporation, Viacom, and, until it recently pulled out of the book business, Time-Warner) publish most leading titles, and a few chains (Barnes &Nobles and Borders) dominate retail sales, along with online shopkeeper Amazon. This state of affairs has been brought about by a series of mergers, acquisitions, and bankruptcies over the past thirty years.

In the same way, there are far fewer major recording studios than twenty years ago; fewer and fewer movie chains and movie studios. As for magazines, they are dominated by just a half dozen companies -- Conde Nast, Time-Warner, News Corporation, Hearst, Hachette Filipacchi and Bertelsmann.

[Oligopoly Watch (6/7/2003)]

*Unless we put corporate existence on an accountable footing by removing bogus personal rights. See this page at ReclaimDemocracy.org for some study materials.


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Spike Hall is an Emeritus Professor of Education and Special Education at Drake University. He teaches most of his classes online. He writes in Des Moines, Iowa.


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