Furthermore, Tapscott is right to mention that corporations are psychopathic by the definition of the American Psychological Association (and psychopathic personalities are more common in corporations). So what holds them back? Regulators, first and foremost. Without government regulators, corporations would be truly scary. Second, what holds them back is whatever morality (or lack thereof) employees bring to their jobs, as mentioned. Third, we have the courts.
And so, the only meaningful checks on the abuses of corporations come from outside the corporation, and everybody agrees on that. That's worth remembering.
To wit, even right-wing ideologue Dr. Milton Friedman realized corporate excesses would have to be checked somehow. Rather than regulations, he preached that society should rely on the courts to alleviate the externalities and suffering that corporations foist on their customers and non-customers alike. (Never mind that sick people can't be made well, and the dead can't be resurrected, by courts, no matter what penalties or monetary awards they grant in retrospect.) Even Milton Friedman acknowledged that corporations would do very bad things if left to their own devices.
Why? Because corporations are not human. When it comes to human beings in society, we're very particular about assigning responsibility (or blame) and holding individuals accountable. Yet the genius, the key innovation of the corporation, is the limits it places on each shareholder, founder's or employee's liability for the bad stuff the corporation does, as well as the financial risks it takes.
No such limits exist, nay, would be not tolerated, by society when it comes to individuals. Conservatives are most adamant on that point; liberals, at least stereotypically, are the ones making all sorts of excuses for individuals' behavior: nurture, not nature, and societal forces and all that, they plead. Such liberal "excuses" drive conservatives nuts. And yet when it comes to corporations, whose main innovation in the history of mankind is to limit individual responsibility, and thereby make individual risk-taking more palatable, conservatives don't see any contradiction with their professed ethical-moral values.
This diffusion, or rather, dissipation, of moral responsibility has recently reached absurd proportions. For example, how could one employee of Goldman Sachs, Fabrice Tourre, be held responsible (in a civil, not criminal, suit, mind you) for $3.2 billion fraudulent trades, and yet Goldman's management escape unscathed? OK, Goldman paid a $550 million fine to the U.S Government while admitting no wrongdoing, but that fine was paid by Goldman's shareholders -- while investors in those fraudulent trades received nothing, and company officers kept their jobs. Where's the accountability?
And finally, Tapscott is right to mention the influence of the Internet on corporate transparency. Is it any wonder that the fig leaf of Corporate Social Responsibility (CSR) coincides with the birth of the Internet? But yet again, the Internet is external to the corporation; it depends on active citizens to monitor the activities of the corporation. It is citizen-sponsored regulation, or external regulation by other means, and arguably not the most efficient means.
Tapscott's conclusion is dead on: "The blanket assertion that corporations are people obfuscates the complex issues at play in the changing business world. Corporation are institutions. People are people."
By Dan Tapscott
September 16, 2012 | Huffington Post
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