SF writer Charles Stross is railing against corporations:
Corporations do not share our priorities. They are hive organisms constructed out of teeming workers who join or leave the collective: those who participate within it subordinate their goals to that of the collective, which pursues the three corporate objectives of growth, profitability, and pain avoidance. (The sources of pain a corporate organism seeks to avoid are lawsuits, prosecution, and a drop in shareholder value.)
Corporations have a mean life expectancy of around 30 years, but are potentially immortal; they live only in the present, having little regard for past or (thanks to short term accounting regulations) the deep future: and they generally exhibit a sociopathic lack of empathy.
Piffle. In the first place, Stross is engaged in reification to an absurd degree:
We are now living in a global state that has been structured for the benefit of non-human entities with non-human goals.
Admittedly, reification is semantically useful. It permits us to utilize a form of shorthand. It is easier to say General Motors did so and so than to attempt describing the complex process that actually occurred. Reification, however, can be dangerous.It confuses the forest for the trees--the thing for the people.
Properly understood, the corporation is a set of relationships among people who have various stakes in the enterprise. Employees provide labor. Creditors provide debt capital. Shareholders initially provide equity capital and subsequently bear the risk of losses and monitor the performance of management. Management coordinates the activities of all the firm’s stakeholders. The corporation thus is not a thing, but rather a nexus or web of explicit and implicit contracts establishing rights and obligations among the various people making up the firm. It is a fundamentally human endeavor. Indeed, the business corporation is really a community of human beings, acting together to provide goods and services to other human beings.
Within that larger corporate community, moreover, we often find sub-communities of people whose shared values and goals gives meaning to their lives. If it is true that we now bowl alone, it is also true that those who work for corporatio0ns do not work alone. Instead, As Michael Novak observes, “Some persons today are closer to their colleagues in the workplace than to their family.”
Worse yet, Stross utterly ignores the tremendous contributions corporations have made to the betterment of mankind.
“The limited liability corporation is the greatest single discovery of modern times... Even steam and electricity are far less important than the limited liability corporation, and they would be reduced to comparative impotence without it.” -- Nicholas Murray Butler
The corporation provided a vehicle for small and impecunious entrepreneurs to start and grow new businesses. Without the shield of limited liability, only very wealthy persons would dared go into business.
At the same time, however, the limited liability corporation provided an essential vehicle for vast industrial enterprises that produced the goods and services that we now take for granted in modern life. The numerous technological changes wrought by the Industrial Revolution, especially the development of modern mass production techniques in the nineteenth century, gave great advantages to firms large enough to achieve economics of scale. In turn, those advantages gave rise to giant industrial corporations. These firms required enormous amounts of capital, far exceeding the resources of any single individual or family. They could be financed only by aggregating many small investments, which was accomplished by selling stock or bonds to many investors—each of whom held only a tiny fraction of the firm’s total capital.
Limited liability corporations thus also contributed to society by making it possible for anyone to invest their savings in corporate stock. Under conditions of limited liability and diversification, shareholder passivity is possible because the shareholders stand to lose only a small portion of their individual wealth in the event one of their portfolio firms goes bankrupt. Indeed, if the bankruptcy of Firm A redounds to the benefit of competitor Firm B, diversified shareholders who own stock in both might even be better off. If the shareholders are personally liable for damages, however, they will want to monitor not only how the corporation conducts its business, but also the creditworthiness of their fellow investors. Hence, without the development of the limited liability corporation, we would not have a burgeoning class of investors holding corporate stock, because the costs of holding a diverse portfolio would be too large. The corporate form thus has done much to help the middle class build and preserve wealth.
The corporation's contribution, of course, comes not only in the material but also in the political. The corporation acts as a vital counterweight against the state – an alternative island of power within society. Hence, Novak argues the corporation has proven to be a powerful engine for focusing the efforts of individuals to maintain the requisite sphere of economic liberty. Those whose livelihood depends on corporate enterprise cannot be neutral about political systems. Only democratic capitalist societies permit voluntary formation of private corporations and allot them a sphere of economic liberty within which to function, which gives those who value such enterprises a powerful incentive to resist both statism and socialism. Because tyranny is far more likely to come from the public sector than the private, those who for selfish reasons strive to maintain both a democratic capitalist society and, of particular relevance to the present argument, a substantial sphere of economic liberty therein serve the public interest. Or, as Novak put it, private property and freedom of contract were “indispensable if private business corporations were to come into existence.” In turn, the corporation gives “liberty economic substance over and against the state.”
In sum, I stand with Micklethwait and Wooldrige's The Company: A Short History of a Revolutionary Idea
