Is the corporation your friend?

The funny thing is, although it is wrong to think of corporations as people, it is probably also necessary for social cohesion. If the American people are going to support business in the court of public opinion, business must to some extent have a friendly face. Otherwise politics might treat business too harshly, ultimately leading to bad consequences for American private enterprise. Furthermore, consumer loyalty to corporations, even if irrational, is part of what induces better behavior from those corporations. Companies know that if they build up a good public image and stick around with a track record of reliable service, consumers will reward them with a kind of emotional loyalty. Overall, that creates a largely positive business incentive, one that would not be present if all consumers were more aware of the somewhat more cynical truth: that corporations should be judged not as friends but as abstract, shark-like legal entities devoted to commercial profit. The more that consumers see the relationship as possibly long-term, the more loyally profit-seeking corporations will end up behaving in a long-term and socially responsible manner. Societies need their illusions in this regard, and thus it can be dangerous to fully articulate and make publicly known the entire truth about business corporations and the fundamentally dubious nature of their loyalty.

So the trick is this: the public needs to some extent to believe in corporations as people, just to keep the system running. Workers need to hold similar feelings, to maintain workplace cohesion. Yet when it comes to politics and public policy, we need to distance ourselves from such emotional and anthropomorphized attitudes. We need to stop being loyal to corporations for the sake of loyalty and friendship, and we also need to stop being disappointed in corporations all the time, as if we should be judging them by the standards we apply to individual human beings and particularly our friends. Instead, we should view companies more dispassionately, as part of an abstract legal and economic order with certain virtues and also plenty of imperfections. Unfortunately, that is not about to happen anytime soon.

That is from the final chapter of my forthcoming book Big Business: A Love Letter to an American Anti-Hero.  Ah, and there is more:

One reason we like to think of corporations as our friends is that we can feel in greater control that way. I’ve already discussed just how much we rely on corporations—for our food, for our entertainment, for communicating with our friends and loved ones, and for getting around from one place to another. But for all the talk from economists about consumer sovereignty, it’s not clear how much people actually are in control at all. It’s true you can choose what to buy in the Giant, Safeway, or Whole Foods, but it’s hard to step outside the commercial network as a whole, and the nature of that network shapes so many of our choices and thus our lives.

Of course, it is impossible for customers to ponder these philosophical questions in their deepest and subtlest terms all day long, as that would consume way too much of people’s mental and emotional energies. So instead people translate their rather bizarre, non-hunter-gatherer modern commercial society into terms that their more primeval selves are familiar with. That is, people carry around a mental picture of being surrounded by people they can trust, if only salespeople, and of being in a familiar environment in which they are exercising their free will as consumers and also as workers. Given the need to get through each day, it is emotionally very hard for people to internalize emotionally the true and correct picture of those businesses as partaking in an impersonal order based on mostly selfish, profit-seeking behavior.

You can debate exactly how true or untrue our generally held picture of freedom in modern commercial society is, but I can’t help but feel that part of it is a lie. The system offers many formal properties of freedom, such as the immense choice of products and jobs, and the relative lack of imposed coercion on most of these decisions. Still, when you combine pressures for conformity, the scarcity of attention, the stresses of our personal lives, and the need for “ready quick” decision-making heuristics, it’s not exactly a life of true freedom we are living. It is (more or less) close to the freest life a society is capable of providing us, but it isn’t quite free in the metaphysical sense of actually commanding our individual destinies through the exercise of our own free will. At least some of the freedom of contemporary consumer society is an illusion, taken upon ourselves to make our lives feel bearable and to help us feel more in control—precisely because, to some extent, we are not very much in control at all.

Recommended, by your friend, namely me.

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Perhaps we also need the false belief that the humans around us are are our friends (rather than the somewhat more cynical truth that they're animal-like entities designed to maximize the success of their own genes) to induce them to behave better.

Clever, but perhaps a bit pat. Human social dynamics are the devil we know: we've had (conservatively) a few hundred millennia to learn them, and so I'm skeptical of any claims about "false belief" in this domain. "Friend" is a word that was invented to describe an actual social dynamic between humans. It means that, not some "false" version of that.

I'm a little bit confused as to Tyler's argument. In what way does the system work better if we (or maybe just the rubes?) operate under the delusion that corporations will exhibit the same social behaviours as our fellow homo sapiens. Better for whom?

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This passage cries out for rayward or a true legal scholar to opine as to why this happened, possibly related to so-called "In Rem Jurisdiction" cases ("State vs 150 Cigars Seized" is a typical In rem case). Let me search for a few minutes on Google...well, not quite, it seems corporations as persons were around since the First Bank of the US (first federally chartered national bank, a sort of proto-Fed Reserve) and it's actually in the Federal Code as 1 USC 1, as early in the Code book as you can get. The first corporation as person case was 1819 while the first In rem case was around 1828 (United States v. 422 Casks of Wine, 26 U.S. (1 Pet.) 547 (1828)), so they were about contemporaneous. See more here: https://en.wikipedia.org/wiki/Corporate_personhood

It started with the 14th amendment. Yes, the amendment to grant emancipated slaves the right of citizenship, was the first time corporations were treated as "persons" by the Supreme Court. Oddly, the issue isn't even addressed in the Court's opinion; instead, it's in the head note to the opinion: “Before argument, Mr. Chief Justice Waite said: ‘The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution which forbids a state to deny to any person within its jurisdiction the equal protection of the laws applies to these corporations. We are all of opinion that it does.’” That was in 1886 in the case Santa Clara County v. Southern Pacific Rail Road. And this bit of history:

"We have the likes of former U.S. Senator Roscoe Conkling to thank for the extension of Equal Protection to corporations. Conkling helped draft the 14th Amendment. He then left the Senate to become a lawyer. His Gilded Age law practice was going so swimmingly that Conkling turned down a seat on the Supreme Court not once, but twice.

"Conkling argued to the Supreme Court in San Mateo County v. Southern Pacific Rail Road that the 14th Amendment is not limited to natural persons. In 1882, he produced a journal that seemed to show that the Joint Congressional Committee that drafted the amendment vacillated between using “citizen” and “person” and the drafters chose person specifically to cover corporations. According to historian Howard Jay Graham, “[t]his part of Conkling’s argument was a deliberate, brazen forgery.”

Santa Clara was used as authority in the 1978 to justify granting corporations First Amendment rights to spend unlimited amounts on a ballot initiative, the Court stating:“[i]t has been settled for almost a century that corporations are persons within the meaning of the Fourteenth Amendment.” It was a short step to Citizens United and Hobby Lobby.

Here was a highly controversial issue that the lawyers were not even allowed to argue before the Court, a Court relying on a document of dubious validity produced by an interested party, and an opinion that does not address the issue, a headnote to the opinion instead becoming the "authority" for extending the rights of persons to corporations.

Wow rayward, that was good, thanks, the forgery part was interesting.

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For further reading, here's a lengthy article by Howard Jay Graham on the issue: https://celdf.org/wp-content/uploads/2015/08/everyman_s-constitution-graham-Conspiracy-Theory-web.pdf

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This is inspiring: https://www.nytimes.com/2019/04/03/opinion/mount-athos-monks.html

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Brings a new meaning to the phrase “self-recommending”!

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Alright, Prof. Cowen, now you have finally captured my interest. You actually discuss the lack of true freedom in a capitalist, commercial society, and the true nature of corporations as networked organizations designed to maximize profit, yet even accepting all this you are still making a case for big business as we know it. I’m sure you’ve included more recommendations in your book for improvements from the status quo, and I can’t wait to pick it up to read the details! Thank you for the excerpts.

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Mitt Romney just needed to add one minor conjunction: "Corporations are people, [and] my friend."

TC takes a rather Platonic view of the matter.

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"...the public needs to some extent to believe in corporations as people, just to keep the system running. Workers need to hold similar feelings, to maintain workplace cohesion. Yet when it comes to politics and public policy, we need to distance ourselves from such emotional and anthropomorphized attitudes. "

Only problem is that corporations are transforming all the time: merges, acquisitions, spin-offs, bankruptcies, private to public, public to private, growth times, layoff 10% of workers times. Any salaried worker that sees a corporation as people is on a highway to disappointment and probably burnout.

On the other hand, this illusion do exist and workers are emotionally attached to corporations. It's good for workplace cohesion but people is left with emotional damage after a bankruptcy, the can't move on. IF the illusion exists, there are upsides and downsides.

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'If the American people are going to support business in the court of public opinion, business must to some extent have a friendly face.' - B-B looks like a ruggedly handsome man in his mid-forties, with a black moustache, one assumes.

'Furthermore, consumer loyalty to corporations, even if irrational, is part of what induces better behavior from those corporations.' - No wonder Comcast doesn't care - they are essentially in a monopoly position, and thus don't care about 'consumer' loyalty, much less customer loyalty.

'but as abstract, shark-like legal entities devoted to commercial profit' - But also able to inspire a love letter, on the plus side of the ledger.

'to some extent to believe in corporations as people' - We have always been at war with treating corporations as soulless organizations, but victory has grown measurably closer under B-B's inspiring leadership.

'It’s true you can choose what to buy in the Giant, Safeway, or Whole Foods but it’s hard to step outside the commercial network as a whole, and the nature of that network shapes so many of our choices and thus our lives.' - Well, strangely, outside of the U.S, a lot of people also get to decide what to buy from farmers in their region, and though obviously this process involves commercial networks, corporations do not play such a prominent role.

'It is (more or less) close to the freest life a society is capable of providing us' - Well, most of the industrial world gets the added benefit of essentially universal health care, providing a level of personal freedom that most Americans do not seem to enjoy. Still, always nice to have a goal, right?

"No wonder Comcast doesn't care - they are essentially in a monopoly position, and thus don't care about 'consumer' loyalty, much less customer loyalty."

You've got to be kidding. Comcast is no monopolist. If Comcast is overcharging me, I can let them know what AT&T, Verizon, Dish Network, etc., is offering and I'll bet they'll try to match or beat it...especially if I am a loyal customer. They also compete with others on content and pay license fees to their competitors.

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I would be embarrassed to have written something like this. This reads like a high school term paper.

Yet soon to be a best seller, undoubtedly.

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It’s written as if people in industrialized societies do mostly think of corporations as friendly people, but presumably there’d be no reason to write the book if that were already true. I think real-world attitudes are highly variable, and major institutions like corporations and governments can persist a long time even if people don’t actually like them very much — I think we can do without all the noble lies.

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"Recommended, by your friend, namely me."

That's a nice change of pace from the typical Tylerian "self-recommending".

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There might also be relevant quantum criteria to adduce (as we sneak up on the end of the first century of our Quantum Era):

http://fictionaut.com/stories/strannikov/velocities-of-disputation-fact-measurement-perception-volition

(Even if freedom is an illusion, it might be an illusion more worth preserving than "god" [a role TC is reluctant to assign to contemporary corporations]: yet if losing "freedom" is the necessary preamble, perhaps we'll find by the end of the second century of our Quantum Era that "truth", too, can no longer prove a helpful distinction.)

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The funny thing is, although it is wrong to think of corporations as people, it is probably also necessary for social cohesion.

This is one of those things that ties people up in knots, but seems perfectly obvious to me. Corporations are not *individual* persons, corporations are *groups* of people. So the correct interpretation of Citizens United is not 'corporations are people' (yay! or boo!), but rather that groups of people who form a corporation, don't lose their constitutional rights in the process. Given U.S. laws, the only practical way that the like-minded people comprising Citizens United could band together and raise and spend money (without running afoul of various tax laws and other regulations) was as a (non-profit) corporation. But that decision to incorporate should never result in them losing the constitutional rights they had enjoyed as individuals before incorporation. Or, put another way, a group who incorporates should never have diminished constitutional rights as compared to a single wealthy individual who has enough money to go it alone. (Nor should the profit/non-profit distinction matter in this instance -- the NY Times is a for-profit corporation after all).

Given that, there is no reason at all that we should not have friendly feelings toward some corporations but not others any more than it is wrong to have friendly feelings towards some organized groups but not others.

Citizens United was judged fairly, but I still would prefer that only individual citizens were allowed to donate. Corporations, labor unions, PACs, ect should all be banned.

"but I still would prefer that only individual citizens were allowed to donate"

Why? Shouldn't the Sierra Club, for example, be able to provide some of the funding for a Netflix series promoting action on Climate Change? Why should citizens who join the Sierra Club be limited to freedom of speech that they produce and publish directly rather than in cooperation with other like-minded groups?

Too many groups spending the groups money on political speech that many, sometimes most, don't agree on.

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A fair point, but worth keeping in mind that having their "constitutional rights" curtailed in some ways is total fair play given that their liability is also limited in others.

So you think it would be fair and constitutionally acceptable for the NY Times, CNN, NBC, etc (for-profit corporations all) to have their free speech rights curtailed in some ways in exchange for limited liability?

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"Otherwise politics might treat business too harshly, ultimately leading to bad consequences for American private enterprise. "

So true. Which is why we had so many corporate executives sent to jail for their role in destroying the economy and the savings of millions of Americans during the 2008 Financial Crisis.

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How we anthropormiphised an investment vehicle will puzzle future anthropologists much as does Mayan human sacrifice today.

It's no more or less puzzling to anthropomorphize a company than it is any other kind of group with identifiable leaders and a distinct culture, history, set of goals, etc. There's nothing more abstract or non-human about Google as compared to, say, the Rotary Club or the Catholic Church or the Audubon Society or Black Lives Matter or the Boy Scouts.

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| "...corporations are *groups* of people" |

..

... and "governments" are legally just 'groups of people'

But most people eagerly embrace 'governments' as individual legal entities with full (somehow usually superior) rights.

Corporations and Governments are quite similar legal abstractions.

It is illogical to reject the legitimacy of Corporations ... while reflexively endorsing the legal concept of Governments.

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Does the book address the "corporate rock still sucks" ethos that many of us grew up with? Shitty commercial music was my first reason for distrusting corporations when I was young and naive.

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Corporations are good at large scale processes - better than the governments on the average and better than the military since they tend to be more efficient. This expertise can be leveraged for social good through government policies.
For most people, ignoring the hoohah of "corporations are evil" from the left and "corporations are people" from the right", corporations are the people who work for them. We judge a corporation by how well it managers treats their workers, whether its CEO cheats at golf or spends millions dollars on his daughter's wedding or plays high stakes blackjack. The point is that corporations are judged by the choices its people make and by the same criteria we have for judging people - are they honest? - do they clean up after themselves? do they treat people with respect? are they greedy? do they admit mistakes?

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I disagree.

Corporations are legal fictions that give special rights and privileges to their owners. And corporations are becoming world-wide entities almost immune from most countries laws. Corporations certainly have enabled much growth, but there are limits to everything.

Do you want google, facebook, ford, cigna, to control your everyday decisions?

I don't. But I do not know how to avoid it.

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Just for the record, corporations are not my friend.

How can you think otherwise.

Can I invite a corporation over for dinner?

I am amazed that you even started this string with "Is the corporation your friend?"

Just remember that corporations running private prisons would be over joyed to see both you and me and all the other commenters here behind their bars.

Open up your eyes!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Friend indeed! Just look at the cases of fraud involving Poland Springs, FIFA, Volkswagen, Wells Fargo, AIG, Enron, 1MDB, etc. etc. Are these instances of business fraud rare outliers or just the few unlucky bastards who got caught?

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This is embarrassingly bad. I hope it’s some kind of April Fools joke.

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What is the purpose of all of this? Is Tyler trying to promote a new behavior for society to follow? Maybe I am confused as to what Tyler is trying to compare this 'modern corporate society' to.

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It is no doubt true that most companies are shark like even though they lie and try to appear friendly, but I suspect at least some companies lie to their owners and pretend to be shark like when they are in fact friendly or even downright artistic.

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"At least some of the freedom of contemporary consumer society is an illusion, taken upon ourselves to make our lives feel bearable and to help us feel more in control—precisely because, to some extent, we are not very much in control at all."

I'm surprised at the melancholy tone of this. If you, Tyler, of all people, don't feel you have control over your life, who does? You write, you travel, you could change your job easily and exercise huge amounts of choice in your day to day life.

Compared to a hunter/gatherer, a peasant farmer, or even a city tradesman, we all have far more choice than ever before. What, exactly are you complaining about?

Also, I've known some CEOs, and they really don't sit around wondering how to degrade their products and lie about it to increase their profits. They tell themselves that they run a great company that people like. They may be lying to themselves, but a cynic simply can't do that job (it's hard work!) and can't get loyalty from their workers.

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Kind of like... personifying the human condition and something responsible for the design of it all as God. And the image being a buff old guy with a beard. Pretty much all of western civilization personifies existence like that in contrast to more eastern mental models.

Our major religions all have personification as the driving mental model. As much as buddhism in and of itself is all about not being personified, it has Buddha. Without Buddha, it doesn't spread.

And we all know that the definition of all things in existence isn't found in our religious teachings, but, in the US Tax Code definition.

I always find the comments on your articles enlightening. The constrained intellectualism and need to categorize and objective every last thing. Reminds me of a NOVA episode where researchers blamed the massacre of millions in India mid-century on western civilizations need to do this. Tracing the introduction of these mental models to the introduction of census taking in the late 1800s. People didn't think about themselves as this or that and as this way of thinking about the world unfolded it became a spreadsheet for which people suddenly saw data as the tool used to determine resources in the new world of global territorial boundaries.

In the real world, people do not think of themselves through the categories, the rules systems developed in our academic pillars, etc.

Has always felt like someone could build an entirely new, modern construct from the what seems to be like a 200 year old idea of selfish genes.

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