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The Corporate Death Penalty
Posted by
Hemos
on Sat May 26, 2001 11:54 AM
from the 1-2-3-fire dept.
from the 1-2-3-fire dept.
There's an interesting column on SiliconValley.com from Dan Gillmor (IMHO, one of the few smart columnists out there) about a probably-unimplementable idea: Killing illegal companies. The notion appeals to me though -- but even more, the idea of bad companies wearing electronic tracking bracelets amuses me. *grin*
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The Corporate Death Penalty
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Unimplementable? Not at all! (Score:3)
A common practise in Europe but probably quite unfamilar to you Americans.
Harm done to "innocents" (Score:5)
I'm a NAIC club member and stock investor. I'm also an employee. *Both* of these attributes have a certain amount of risk involved- the company I am working for may go out of buisness, or may simply downsize me, with little or no warning. The stocks I buy may declare bankruptcy, or plummet in price so far that the stocks may as well be worthless. You can't avoid risk, so you manage it. You don't put all your money into one stock, you diversify. That way if one company bombs, it doesn't take your entire portfolio with it. You keep you skills current, live in a city with many job opportunities, and keep technical contacts up, so when you loose your current job you can get another one. Risk is a fact of life.
Re:so then.. (Score:5)
Since you are so fond of Jefferson, I have a quote for you.
"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from any body. Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices."
- Thomas Jefferson, Letter to Isaac McPherson, August 13, 1813
Corporations are imaginary (Score:5)
As for the argument that corporations are created by the State, and are thus subject to destruction by the state (kind of like Bill Cosby's stand-up routine where he says to his kid, "I brought you into this world, boy, and I can take you out of it."), that's also just plain wrong. Just because the State has to approve the creation of a corporation does not mean the State created it--that's the same as claiming the State creates all houses because it has to grant building permits.
If you were to "kill" corporation X, what happens to its assets? What happens to your grandmother who lives off a pension that is heavily in X's stocks and bonds? Just liquidating a company gives you its book value, which is generally nowhere near its market capitalization... What happens to the employees?
Corporations, in many ways, are similar to democracies, except the shareholders are the citizens. Even though we have a democracy, we don't punish citizens for the acts of the government they may or may not have voted for (the punishment of poor governance is generally enough). Likewise, we shouldn't punish shareholders for the actions of the corporate executive.
A much simpler and more reasonable solution is to make executives liable for any violations of criminal law committed by their company. The legal entity of the corporation should still offer protection against civil liability (e.g., getting sued for not honoring warranties, etc.), but not against criminal prosecution (suit for manslaughter for knowingly selling excessively dangerous products without proper warning to consumers).
Re:This actually exists... (Score:3)
No, stockholders are the owners of their companies and they should ultimatly be held responcible for it's actions. We would have a very diffrent system of investment without limited liability, but our world would not collapse. Instead, the wall streat jounal would offer analysis of the risks involved in purchasing stocks. Yes, there would be "innocent" investors occasionally hurt because they accedentaly invested in a bad company, but there are "innocent" drivers occasionally convicted of manslauter after they "accedentally" ran over and killed someone. They might be a good driver most of the time and have very good intentions, but that one night they made a mistake and the way we prevent those mistakes is by punnishing them harshly.
Also, you are bitching and moaning about "self serving politicos who run around excoriating all these evil companies," but I do not see you running arround compaaining about all the "self serving politicos who run around tring to crusifing people for driving accedents." We have a very good judicial system and those "self serving politicos" should be using the same laws to deal with companies as with individuals.
If I'm a snake oil salesman who sells you poison for "relaxation" then I should go to jail and get sued for wrongful death. The same laws should apply to Philip Morris.
BTW> The real "libhertarian" pssition is that there should never be any limited liability period, but I'm moderat/practical so I propose that a few especially dangerous companies which are especially neccissary should be given limited liability, but I want to see society charge a reasonable price for limited liability and the only reasonable price is sacrificing a significant portion of control.
Re:This actually exists... (Score:4)
Luckily, there is a simple comprmize which allows both the freedom to carry out activities without governement intervention and allows the people to restrict the actions of dangerous companies/.orginisations. Specifically, deny corperations limited liability protections for their stock holders (and fine the shit out of people for doing nasty stuff).
Example: First, Phillip Morris would get sued into bankrupsy and beyond. Second, the debt would get passed onto the people who have held stock in Phillip Morris at the time of the abuses. Third, once a few very rich people lost their houses no one would ever invest in a company they suspected of being dishonest, harming the enviroment, killing people, etc. It would also mean that companies would need to "sell" their "harmless nature" to their investors.
Now, there are essentual companies (like power) which would become impossible under this scheme. The solution would be to allow these essentual companies to give up 50% control to publically ellected officials in exchange for limited liability protection for stock holders. This would be a really good deal for the companies since these ellected officials would typically belong to diffrent parties and thus disagree, but it would still give the public the necissary ammount of control over the company.
(BTW nice quote)
there is precedent (Score:5)
corpwatch.org has a well-researched article [corpwatch.org] by Russell Mokhiber discussing cases going back more than a century of states revoking the corporate charter of corporations found guilty of crimes. The state granted the charter in the first place, giving "birth" to that corporation, and what the state gave it can take.
Absolutely! (Score:5)
Therefore, it makes logical sense that something that is created entirely by the State can be killed by the State (lets thank god 1984 isn't here yet, when the State starts making babies, the same logic will apply =( ).
Note that a corporate death penalty can be taken to mean a couple of different things. For example, if Microsoft lost its case and was sentanced to death, does that mean:
A similar but unrelated question is "when should the corporate veil be pierced for investors in a corporation that commits criminal acts?" Shouldn't the investors/shareholders - who are the OWNERS be held responsible for the actions of the organization they are a part of? People would THINK a lot more on Wall Street if they were, and perhaps the mindless and ruthless actions of Transnational Corporations would be help back somewhat if the investors knew they would be liable (criminally or civily) for them...
Hmm.. another question, should/could Firestone or Ford be charged with murder? Manslaughter? If proven that they had knowledge of the fatal consequences of their actions and as a corporation did nothing about it - perhaps. Also... cigarette companies? Can they be charged with murder, since they're aware as a company that they are more or less responsible for thousands of deaths each year? Makes me wonder if Florida is a death penalty state...
So yeah, they should be treated exactly as people. =)
Re:lifting the corporate veil (Score:3)
While this would work (and is happening) in the specific case mentioned, it wouldn't in many others. The entire point of a corporation, in some ways, is to protect individuals from responsibility. In a large, multi executive company, the plausible deniability of any given individual is huge. Thats why most sexual harrassment cases are made against companies and rarely individuals. The individual offender wasn't warned so he didn't know it was a problem, and the supervisor didn't think there was anything he could do because the department manager didn't hear enough to take it seriously, and the vice president didn't make a policy because he wasn't even in that position when it started, and the executive vice president who was in that position certainly can't be held responsible for NOT doing something that long ago and is in London now anyway....
In some cases, the corporate veil is more like an onion - you lift all the layers and then it turns out there's nothing there. So do you throw up your hands and say "guess there's no one we can hold responsible", or do you you declare the whole onion rotten and take what you can out of it?
Kahuna Burger
There is a corporate death penalty. (Score:3)
This has been used against individuals as part of the drug war. This has been used unfairly and unjustly. One person who had been arrested for drunk driving lost his car, though he was found not guilty. A woman lost her car, because her husband was arrested in it for getting a blow-job from a prostitue.
The same penalty applied to a corporation could take all assetts of a corporation since it would be intermingled. No money -- no corporation.
Yeah, but... (Score:3)
Yeah, but how do you fit them around those huge company ankles?
ooh yeah (Score:4)
He's got it backwards (Score:5)
Why would you want to punish the corporation instead of the executives? It's just an imaginary thing anyway.
I'm sure the executives at Avant! would have rather had the corporation killed than having to pay $27 million dollars out of thier own pockets.
That's why you form a corporation in the first place. The primary purpose of a corporation is not to IPO. It's to tranfer liability from you personally to this imaginary fixture.
Trolls throughout history:
The real problem is... (Score:5)
The real crime here is that while a corporation or a company is realy a posession even if it is owned by hundreds or thousands of people, it serves as a protective sheild for real criminal behavior.
It is said that a society grows more corrupt the more laws it has. Well, rather than imposing new laws that punish a corporation or its members for wrongdoing, I propose instead removing laws and tax code that grant corporations 'person status'. Remove the laws and tax code that allow a corporation to profit instead of its owners. Remove everything that grants rights to a corporation, and I think you'll start to see a little better accountability.
Re:there is precedent (Score:4)
On the site is a .pdf of a phoney "Corporate Charter Revocation" form that some Canadian activists posted all around the headquarters of a mining company, and the stock market. The company's share too a dive.
The reasoning behind real corporate dissolutions (besides the joke ones) is that corporations have massive power, have the same rights as natural humans and because of their massive wealth still manage to evade the laws. There is no real accountability from corporations. Having the threat of dissolution return could cause some of them to smarten up, ie. tobacco companies, Avant!, FireStone, etc.
This actually exists... (Score:5)
For more on this, see the AdBuster's web site:
http://adbusters.org/campaigns/corporate/tour/1.h
--
Convictions are more dangerous enemies of truth than lies.
Individuals (Score:3)
Otherwise, we already have a death penalty. Its called going-out-of-business.