Your post reminded me of something from J. R. R. Tolkien I read this weekend. In a letter to his son, he said that he wished people would use personal names rather than referring to Government in the abstract. He thought that it would help clarify thinking if people said “King George and his council” or “Churchill and his gang” than to speak of Government.
Computers don’t pass the Turing test either, but we continue to grant incredible power to them as we delegate various tasks and systems. Of course, with computers, we (ostensibly) maintain ultimate and have the ability to intercede if necessary.
Thus, delegating power to governments (or, yes, even corporations) is not inherently bad. I agree that delegating too much is bad. The trick is to delegate the right amount—in the right ways—while maintaining a flexible system of checks. The problems we see right now (particularly in the US) are a combination of too much power and not enough oversight—that system of checks has not been maintained in proportion to the amount of power accrued by the governments and corporations.
As an aside, in science fiction where computers have achieved something like sentience, a gambit for granting them personhood often involves incorporating them (since corporations are, apparently, people). So if this becomes science fact, corporations and computers might often be one in the same….
Dominic Amannsays:
The reason is obvious from your own statement. Corporation also fail the Turing test (or rather, the decency test), so we have government to protect us from the excesses of corporations. I is far easier to attempt to hold one government to account than a huge number of corporations.
What the libertarians always forget is that in the absence of government, we would all be serfs to corporations – as we were in the days of Kings and Barons.
Dominic Amannsays:
Meh. So what? Corporations would exist by any other name. There will always be people who will “lord” it over others to do their bidding to gain power and profit.
“Government” exists to govern that so these individuals do not run roughshod over the rest of us, as they used to do BEFORE the government made them into corporations.
Dominic Amannsays:
So to be clear, what you are arguing against is not the corporation itself, but the concept of limited liability (which is but part of the concept of a corporation).
The idea as far as I understand it (IANAL) – is that a corporation is only liable to the extent of its total investments. That is to say, if I personally create a corporation, then only the wealth that I (and others) invest in it is “on the hook” if I do wrong, or screw up or fail to make money etc.
Do you really think that concept is wrong? And how can you argue (from this) that we should not have government?
Yes, there were terrible folks who abused their power before corporations were created, and there will be such terrible folks in the future.
However, these people are not the same as corporations. Corporations are not people.
Google and Apple are not people. The government created them. It is simply not true to say that they would exist “on another form” if governments decided that corporations can no longer exist (or are limited to a 5-year term, or whatever). Corporations are a recent invention and there was no equivalent to the corporation before.
You had wealthy families, for sure. But they did not have limited liability. If they overextended their reach or misbehaved, they could go to their ruin and be unable to recover. The family itself would be ruined: they could end up in the streets begging. If they misbehaved, it is the family name that would be soiled.
Without the concept of a corporation, you would have bought Windows from Bill Gates himself. His employee would have worked for him, directly. He would have been liable for all his decisions, personally.
You can claim that it is equivalent, but I think we would have found that Bill Gates would have been a lot more careful about growing his business. He would also have been a lot more careful about his actions because at every step, his personal reputation would have been on the line.
I don’t think it is possible to grow large businesses like Apple or Google without the concept of the corporation.
Instead, you would get small businesses collaborating in a giant market.
Corporations are more than just limited liability, but yes, I think limited liability is a problem. Consider the following scenario. A corporation poisons people. Thousands die. Or maybe it pollutes a lake to death. The government takes a tough stance and issues a fine to the corporation. The stock owners take a small hit, but, most likely, the CEO who runs the company is left mostly unaffected. Most importantly though, the reputation of the stock owners is unaffected. Even the CEO can let the blame fall left and right.
Consider for example the Deepwater Horizon oil spill. The BP stock prices did take a dive, but it is now back where it was in early 2009, before the spill. What about BP’s CEO? He did resign, but he did not spent a day in prison nor did he received any fine. In fact, he is doing quite well.
So all his well. We do this dance of the government stepping in to protect us from the corporate overlords, but what actually happened?
Consider the financial crisis of 2008. Bankers broke the law repeatedly by knowingly selling toxic assets. You can check on them if you want. Though some of us lost a lot of money, they were not inconvenienced. You can try suing the corporations for your losses if you want. Good luck with that. The individuals themselves who were responsible for the frauds even got stimulus money from the government.
(BTW, since you are Canadians, you might want to know that our banks were secretly bailed out as well.)
Of course, the government said “we’ll put laws in place so that it can’t happen anymore”. Whatever. I can assure that the same people will happily knowingly sell toxic assets again.
This is not, by the way, capitalism as understood by Adam Smith. Capitalism through corporations is effectively crony capitalism. It is really the worse mix: you take the worse of capitalism mixed with the worse of socialism.
There is a world of difference between that, and you, personally, poisoning thousands. You’d end up in jail and your reputation would be ruined. Your mother would not speak to you anymore. “How could you let that happen?”
Of course, corporations do not commit such horrible acts every day. But they do smaller ruthless things that most human beings would not get away with.
As an individual, if you are at least semi-sane, you probably care a lot more about your reputation (“will my kids want to speak to me in the future?”) than short term financial gains.
Corporations, in fact, organizations, are amoral.
But who grants freedom of speech, limited liability, unlimited existence to corporations? Governments do. Governments create corporations out of thin air.
This is not an argument leading to the conclusion that we “should not have government” as you write. Rather it is an argument that say that it is an ill-posed statement to say that governments are there to protect us from corporations. Governments *create* corporations in the first place. That would be like saying that guns protect us from bullet injuries. There would be no bullet injuries without guns. There would be no corporations without governments.
Rather, you should ask why governments create such corporations in the first place? Corporations have their uses, for example, to gather capital. But we could develop alternative systems where private enterprises can have an easier time collecting capital, without falling back in the limited liability trap.
As to why governments were created. Quite clearly, they were created to support the ruling class. It is not like the Roman folks said “we need a way to protect us from rich folks, let us create the Roman Empire”. In fact, most governments are founded on military might.
It does not make governments are bad thing, and certainly, the liberals saw governments as a tool to keep us free. But governments are not, intrinsically, a force for the good. They are, like all organizations, amoral. Governments are shameless and ruthless. More so that 99% of the individuals you might meet on a given day.
What I am saying is that you can trust people, but you should probably not trust organizations. A government will happily send you fight a senseless war (the US has done it often enough). Most people would be very careful before risking the life of neighbors in a similar fashion.
Eloisesays:
I would agree you can trust some people. But I’m not sure that “all organisations will fail the Turing test” equates to “all organisations are evil and not to be trusted.” I’m also assured by old adages like “serial killers are always the ones you’d least expect it to be” that we can be fooled as to who we should trust.
I’d rather a court that failed the Turing test but upheld strict standards of Justice than one that was nice to me and made a lot of mistakes for example.
I live in the UK so our healthcare is primarily governmentally controlled but it’s still a huge organisation. While I hope at the patient treatment end it’s friendly, responsive and approachable in the face of the nurses, doctors etc. that I come into contact with, I pretty much hope that somewhere there’s someone or a committee making tough decisions about the amount of healthcare provision for the greatest good of the greatest number. Despite the posturing of various government ministers, I’m pretty satisfied they do a very good job in very nasty circumstances. In the UK private healthcare is more uncommon but (in part thanks to the NHS) has to provide a better level of access to health care and typically manages this. I’m pretty sure they have grey people sitting in dull meetings making hard decisions and organisationally failing the Turing test too.
I can keep going with more examples if you want.
I think we’re in more trouble from companies that maximise short-term profits at the expense of everything else. I can’t think of an organisation that does this, but you could posit an organisation that has really good front-facing customer service and yet acts in a way that screws the customers as hard as possible while keeping it’s good reputation. Better or worse than an organisation that has a mediocre reputation for customer service but makes choices that enable it to continue making a profit but maximises the actual benefits to its clients? I’d rather the second thanks, but your mileage may vary.
(1) Wars and genocides don’t usually erupt between individuals. They are systematically initiated by organizations such as governments. Some individuals are racist, but racism only become a real problem, in practice, when it is institutionalized.
99% of the individuals out there would rather just get along and mind their own business.
There are a few evil individuals for sure, but their evil is tiny in comparison to what governments and corporations have done to people.
(2) The justice system is often based around judges. They sign their own verdicts. Though it might be the Crown that sentences you to murder, we insist that a judge, a human being, signs off on it and addresses you, if only briefly, with the verdict.
Though I don’t know how the NHS works, in Canada, we insist that MDs meet with the patients, face-to-face, human being to human being. Treatments are signed off by a human being (the doctor) who is personally liable.
I submit to you Eloise that the reason we insist that things be this way (human being-to-human being) is because we intuitively fear what would happen if people were taken care “by the organization” in such cases.
(3) As for short-term profits, I would say that this tends to be a characteristics of the corporation rather than the private enterprise. (There is a difference between a company you, Eloise, owns, and a corporation.) Sure, there are some people who will sacrifice their long term reputation for short term financial gains. The problem, however, is that they can’t recover easily from this… Meanwhile, if you invest in a corporation that does bad things, you can make a lot of cash, without any effect on your own reputation because it was a fictitious person (the corporation) doing it.
Let me take an example. Some people think Mosanto is a truly evil corporation. For the sake of argument, let us say that it is true. Yet, for all I know, you and I may own a Mosanto stock (in fact, I may very well own some through my pension fund). Yet you’ll never be held responsible for any of the evil.
I don’t know who you are Eloise, but chances are good that whenever you do something that might hurt someone, you feel something in your gut. I’m not a religious person, I’m just saying that we were naturally selected to get along (generally).
Now, people are pretty nasty when left to their own devices… so if we are on a deserted island, and you are the only other person there, I might watch my back at first. But if we are in a village, I’d be a lot less concerned because if you screw me over, others might notice and this could end up poorly for you.
The corporation escapes these social norms entirely. It lives outside the human society.
Your post reminded me of something from J. R. R. Tolkien I read this weekend. In a letter to his son, he said that he wished people would use personal names rather than referring to Government in the abstract. He thought that it would help clarify thinking if people said “King George and his council” or “Churchill and his gang” than to speak of Government.
Computers don’t pass the Turing test either, but we continue to grant incredible power to them as we delegate various tasks and systems. Of course, with computers, we (ostensibly) maintain ultimate and have the ability to intercede if necessary.
Thus, delegating power to governments (or, yes, even corporations) is not inherently bad. I agree that delegating too much is bad. The trick is to delegate the right amount—in the right ways—while maintaining a flexible system of checks. The problems we see right now (particularly in the US) are a combination of too much power and not enough oversight—that system of checks has not been maintained in proportion to the amount of power accrued by the governments and corporations.
As an aside, in science fiction where computers have achieved something like sentience, a gambit for granting them personhood often involves incorporating them (since corporations are, apparently, people). So if this becomes science fact, corporations and computers might often be one in the same….
The reason is obvious from your own statement. Corporation also fail the Turing test (or rather, the decency test), so we have government to protect us from the excesses of corporations. I is far easier to attempt to hold one government to account than a huge number of corporations.
What the libertarians always forget is that in the absence of government, we would all be serfs to corporations – as we were in the days of Kings and Barons.
Meh. So what? Corporations would exist by any other name. There will always be people who will “lord” it over others to do their bidding to gain power and profit.
“Government” exists to govern that so these individuals do not run roughshod over the rest of us, as they used to do BEFORE the government made them into corporations.
So to be clear, what you are arguing against is not the corporation itself, but the concept of limited liability (which is but part of the concept of a corporation).
The idea as far as I understand it (IANAL) – is that a corporation is only liable to the extent of its total investments. That is to say, if I personally create a corporation, then only the wealth that I (and others) invest in it is “on the hook” if I do wrong, or screw up or fail to make money etc.
Do you really think that concept is wrong? And how can you argue (from this) that we should not have government?
@Dominic
Corporations are created by governments. They exist by state-issued charters. Unlike human beings that exist independently from the state.
In a very real way, corporations are extensions of the state. The state found that it was desirable to have corporations, so it created them.
Adam Smith was not fond of them as he saw that as violation of the free market ideal.
@Dominic
Yes, there were terrible folks who abused their power before corporations were created, and there will be such terrible folks in the future.
However, these people are not the same as corporations. Corporations are not people.
Google and Apple are not people. The government created them. It is simply not true to say that they would exist “on another form” if governments decided that corporations can no longer exist (or are limited to a 5-year term, or whatever). Corporations are a recent invention and there was no equivalent to the corporation before.
You had wealthy families, for sure. But they did not have limited liability. If they overextended their reach or misbehaved, they could go to their ruin and be unable to recover. The family itself would be ruined: they could end up in the streets begging. If they misbehaved, it is the family name that would be soiled.
Without the concept of a corporation, you would have bought Windows from Bill Gates himself. His employee would have worked for him, directly. He would have been liable for all his decisions, personally.
You can claim that it is equivalent, but I think we would have found that Bill Gates would have been a lot more careful about growing his business. He would also have been a lot more careful about his actions because at every step, his personal reputation would have been on the line.
I don’t think it is possible to grow large businesses like Apple or Google without the concept of the corporation.
Instead, you would get small businesses collaborating in a giant market.
A very different world.
@Amann
Corporations are more than just limited liability, but yes, I think limited liability is a problem. Consider the following scenario. A corporation poisons people. Thousands die. Or maybe it pollutes a lake to death. The government takes a tough stance and issues a fine to the corporation. The stock owners take a small hit, but, most likely, the CEO who runs the company is left mostly unaffected. Most importantly though, the reputation of the stock owners is unaffected. Even the CEO can let the blame fall left and right.
Consider for example the Deepwater Horizon oil spill. The BP stock prices did take a dive, but it is now back where it was in early 2009, before the spill. What about BP’s CEO? He did resign, but he did not spent a day in prison nor did he received any fine. In fact, he is doing quite well.
So all his well. We do this dance of the government stepping in to protect us from the corporate overlords, but what actually happened?
Consider the financial crisis of 2008. Bankers broke the law repeatedly by knowingly selling toxic assets. You can check on them if you want. Though some of us lost a lot of money, they were not inconvenienced. You can try suing the corporations for your losses if you want. Good luck with that. The individuals themselves who were responsible for the frauds even got stimulus money from the government.
(BTW, since you are Canadians, you might want to know that our banks were secretly bailed out as well.)
Of course, the government said “we’ll put laws in place so that it can’t happen anymore”. Whatever. I can assure that the same people will happily knowingly sell toxic assets again.
This is not, by the way, capitalism as understood by Adam Smith. Capitalism through corporations is effectively crony capitalism. It is really the worse mix: you take the worse of capitalism mixed with the worse of socialism.
There is a world of difference between that, and you, personally, poisoning thousands. You’d end up in jail and your reputation would be ruined. Your mother would not speak to you anymore. “How could you let that happen?”
Of course, corporations do not commit such horrible acts every day. But they do smaller ruthless things that most human beings would not get away with.
As an individual, if you are at least semi-sane, you probably care a lot more about your reputation (“will my kids want to speak to me in the future?”) than short term financial gains.
Corporations, in fact, organizations, are amoral.
But who grants freedom of speech, limited liability, unlimited existence to corporations? Governments do. Governments create corporations out of thin air.
This is not an argument leading to the conclusion that we “should not have government” as you write. Rather it is an argument that say that it is an ill-posed statement to say that governments are there to protect us from corporations. Governments *create* corporations in the first place. That would be like saying that guns protect us from bullet injuries. There would be no bullet injuries without guns. There would be no corporations without governments.
Rather, you should ask why governments create such corporations in the first place? Corporations have their uses, for example, to gather capital. But we could develop alternative systems where private enterprises can have an easier time collecting capital, without falling back in the limited liability trap.
As to why governments were created. Quite clearly, they were created to support the ruling class. It is not like the Roman folks said “we need a way to protect us from rich folks, let us create the Roman Empire”. In fact, most governments are founded on military might.
It does not make governments are bad thing, and certainly, the liberals saw governments as a tool to keep us free. But governments are not, intrinsically, a force for the good. They are, like all organizations, amoral. Governments are shameless and ruthless. More so that 99% of the individuals you might meet on a given day.
What I am saying is that you can trust people, but you should probably not trust organizations. A government will happily send you fight a senseless war (the US has done it often enough). Most people would be very careful before risking the life of neighbors in a similar fashion.
I would agree you can trust some people. But I’m not sure that “all organisations will fail the Turing test” equates to “all organisations are evil and not to be trusted.” I’m also assured by old adages like “serial killers are always the ones you’d least expect it to be” that we can be fooled as to who we should trust.
I’d rather a court that failed the Turing test but upheld strict standards of Justice than one that was nice to me and made a lot of mistakes for example.
I live in the UK so our healthcare is primarily governmentally controlled but it’s still a huge organisation. While I hope at the patient treatment end it’s friendly, responsive and approachable in the face of the nurses, doctors etc. that I come into contact with, I pretty much hope that somewhere there’s someone or a committee making tough decisions about the amount of healthcare provision for the greatest good of the greatest number. Despite the posturing of various government ministers, I’m pretty satisfied they do a very good job in very nasty circumstances. In the UK private healthcare is more uncommon but (in part thanks to the NHS) has to provide a better level of access to health care and typically manages this. I’m pretty sure they have grey people sitting in dull meetings making hard decisions and organisationally failing the Turing test too.
I can keep going with more examples if you want.
I think we’re in more trouble from companies that maximise short-term profits at the expense of everything else. I can’t think of an organisation that does this, but you could posit an organisation that has really good front-facing customer service and yet acts in a way that screws the customers as hard as possible while keeping it’s good reputation. Better or worse than an organisation that has a mediocre reputation for customer service but makes choices that enable it to continue making a profit but maximises the actual benefits to its clients? I’d rather the second thanks, but your mileage may vary.
@Eloise
(1) Wars and genocides don’t usually erupt between individuals. They are systematically initiated by organizations such as governments. Some individuals are racist, but racism only become a real problem, in practice, when it is institutionalized.
99% of the individuals out there would rather just get along and mind their own business.
There are a few evil individuals for sure, but their evil is tiny in comparison to what governments and corporations have done to people.
(2) The justice system is often based around judges. They sign their own verdicts. Though it might be the Crown that sentences you to murder, we insist that a judge, a human being, signs off on it and addresses you, if only briefly, with the verdict.
Though I don’t know how the NHS works, in Canada, we insist that MDs meet with the patients, face-to-face, human being to human being. Treatments are signed off by a human being (the doctor) who is personally liable.
I submit to you Eloise that the reason we insist that things be this way (human being-to-human being) is because we intuitively fear what would happen if people were taken care “by the organization” in such cases.
(3) As for short-term profits, I would say that this tends to be a characteristics of the corporation rather than the private enterprise. (There is a difference between a company you, Eloise, owns, and a corporation.) Sure, there are some people who will sacrifice their long term reputation for short term financial gains. The problem, however, is that they can’t recover easily from this… Meanwhile, if you invest in a corporation that does bad things, you can make a lot of cash, without any effect on your own reputation because it was a fictitious person (the corporation) doing it.
Let me take an example. Some people think Mosanto is a truly evil corporation. For the sake of argument, let us say that it is true. Yet, for all I know, you and I may own a Mosanto stock (in fact, I may very well own some through my pension fund). Yet you’ll never be held responsible for any of the evil.
I don’t know who you are Eloise, but chances are good that whenever you do something that might hurt someone, you feel something in your gut. I’m not a religious person, I’m just saying that we were naturally selected to get along (generally).
Now, people are pretty nasty when left to their own devices… so if we are on a deserted island, and you are the only other person there, I might watch my back at first. But if we are in a village, I’d be a lot less concerned because if you screw me over, others might notice and this could end up poorly for you.
The corporation escapes these social norms entirely. It lives outside the human society.