Making Book

I just finished doing a tax return for a corporation, and the sole owner of this corporation will soon realize one of the greatest benefits of the corporate structure: protection of personal assets in bankruptcy proceedings. We on the left often demonize “corporations” as if they were persons. In fact, a corporation is nothing more than a legal fiction, a way of encouraging risk-takers, and of raising large pools of capital. It’s very hard to envision an industrial society without such a structure.

Are corporations evil? (Are “sole proprietorships” virtuous?) Not at all. All of the evil perpetrated by humans on one another is done by humans, and humans alone. The corporate structure merely facilitates some of our worst traits.

When I lived in Billings, I encountered a term bandied about by employees of the Billings Gazette: “making book”. It’s not something ever seen in print. (As Molly Ivins reminded us, if you want real news, you don’t read what reporters write. You drink with them.) “Making book” meant delivering a certain rate of return to the corporate owners, say, 12%. The owners didn’t care how the Gazette publisher went about it – let some people go, raise rates, trim the page size, boost the ad/news ratio. Didn’t matter. Just make book.

So the publisher did what he had to do. People got hurt – the publisher, unless his name rhymes with wheelie, was not a bad person. In fact, with very few exceptions, none of us are bad people. Yet we are constantly doing bad things to one another. We do it out of necessity – we need to eat, we want to accumulate wealth and be secure. We do so without corporations, but the corporate structure magnifies our worst traits.

The reason is simple – top-down authority. In corporations, people below must carry out the orders of people above. If they don’t, they are soon gone. For the people above, they are removed from the effects of their decisions. (The management of Union Carbide didn’t live near Bhopal; the Dow boys never smelled napalm-burned flesh or gazed upon a deformed Agent Orange baby.)

Greed is a tool, like a hammer, than can build or destroy. Corporations are built around greed. Removal of accountability unleashes naked greed, and it is unabashed, unrestrained greed that gives large corporations a bad name. Monsanto right now is pushing legislation (HR 875) introduced by Rep. Rose De Lauro (whose husband works for Monsanto) that would put organic farming out of business. It’s called the “Food Safety and Modernization Act”. It’s not about safety, and its not modern. It’s as old as time itself. Monsanto doesn’t like all the competition it’s getting from non-chemical based farming. They want it stopped.

Hugh Grant is the CEO of Monsanto. He made the decision to introduce that legislation. It is being carried out below, by the wife of one of his employees. It’s a very bad deal for thousands of small farmers and people, like me and my wife, who like organic food. The farmers will either buy and use Monsanto’s (or some similar corporation’s) pesticides and fertilizers, or stop farming. And we’ll have to eat that crap. We’ll all be hurt.

Hugh Grant will never have to answer to us. He’s alone in his office, unaffected by his decisions.

Perhaps we on the left need to clean up our own act, clarify our concepts. We attack evil corporations. What we mean is that we want to bring corporations under control of law and stakeholders, make them accountable. That’s all we mean. If we do that, if CEO’s are held accountable for more than just making book, we will have a better, cleaner, safer, and nicer world.