A private individual, sure. I'll accept that argument.
But a corporation should have no such leeway. Companies exist for the mutual benefit of the citizens, and their shareholders. Just because we've lost that sense of ethic doesn't make it not true.
Now, the predominant view is "A company can fuck over whomever they want, as long as it lies within the confines of the law", is preposterous. Public corporations are already required to be sociopathic, given the legal requirement of profit (exception given to benefit corps).
Or in much more shallow words, "I'll believe corporations are people when they execute one in Texas."
Well it's an interesting idea to consider a corporation more like a derivative of the state, as it comes into existence via state power, and is in effect immortal until its existence is ended via state power; rather than like the derivative of a person. Therefore there may be a compelling argument that as the 14th amendment extends the bill of rights requirements to all of the states to uphold, that a corporate charter extends some narrow portion as well. As in, the corporation can abridge free speech of employees as spokespeople for their company, a consistent message of what the company "says" is important to be kept clear. But abridging the free speech of its customers seems a lot more problematic, to have a broad brush to just censor anyone using the service for any reason.
I doubt such treatment will come to pass anytime soon though. It's Facebooks infrastructure, and the EULA everyone agreed to gives Facebook, contractually, the power to engage in this censorship. If you don't like it, then maybe you shouldn't have agreed to their EULA which basically says all of your contents is not yours it's theirs. And this is something people who actually read these EULAs warned about and most people just gave it a hand wave as if it wouldn't actually ever be an issue.
A corporation crosses the line when it has a single person who is protected from the legal actions of the corporation by statue (i.e., a shareholder). At this point the quasi-libertarian theory of a corporation as "just a bunch of guys" completely breaks down as there is a special legal protection for shareholders.
A corporation isn't a partnership. A partnership is just a group of people who have agreed to do business together. All of them are jointly legally liable for the criminal actions and liabilities of the corporation.
A corporation, on the other hand, has legal protection for shareholders. A VC can bankroll eMurder.com and the VC isn't liable when the officers of the corporation go on a shooting spree. The options are : Investors get no special legal protection, and creditors and the law can pursue them and their personal assets for the liabilities and crimes of the corporation OR a corporation really is a special instrument of the State, and only has particular standing because we as a society believe the corporate veil provides social benefits.
The state can still attack people in the corporate structure individually. For example, if VP Jones decides to go execute a competitor, VP Jones can be brought to trial for murder.
But if that company decides to, say dump toxic chemicals in the waterways, it's only a few hundred thousand dollars, versus millions to dispose of them. Or if the company decides to refuse doing a recall because the cost of recall doesn't equal or exceed its liability, well, too bad.
Corporations can, and do, a great deal of harm. And many of those behaviors are collective across multiple levels and people. But yet, the most we do is a hand-slap of a fine.
> Or if the company decides to refuse doing a recall because the cost of recall doesn't equal or exceed its liability, well, too bad.
Is that wrong (I think that's what you're implying)? I'm serious. More money can be used to make things safer, but there's a point where the benefits become marginal compared to the costs.
People can, and do, a great deal of harm. There's nothing in corporation that is not actions of people consisting it. Corporations are not able to do anything by themselves, there's always some person that takes specific action. "Company" never decides to dump toxic chemicals, there's always a person deciding to do it, and there's always a person doing it. At least until we invent AI, then we may have something else. Until then, there's only people all the way down.
People seem to lose sight of that: corporations are REQUIRED to be as ruthless as they can legally get away with, or they are literally in violation of the law in terms of making money for their owners.
The law is the ONLY thing that curbs their bad behavior, other than publicity so bad that it (temporarily, until forgotten) causes a sales drop.
Yeah, I'd like to see more corporate death sentences handed out, as well. It may or may not deter any other bad corps, but it would cut down on second offenses :-)
This is false. There is no such law that requires nothing but ruthless profit optimization. I invite you to disprove my claim by pointing to a relevant piece of legislation.
First, your "claim" is loaded with a false question to begin with.
Laws can either be created (legislature), or interpreted (judicial). The basis of corporate law has been founded upon the judicial branch, as well as the requirement to shareholders.
> The case still most often used in law schools to illustrate a director’s obligation is Dodge v. Ford Motor (1919)—even though an important 2008 paper by Lynn A. Stout explains that it’s bad law, now largely ignored by the courts. It has been cited in only one decision by Delaware courts in the past 30 years.
> Oddly, no previous management research has looked at what the legal literature says about the topic, so we conducted a systematic analysis of a century’s worth of legal theory and precedent. It turns out that the law provides a surprisingly clear answer: Shareholders do not own the corporation, which is an autonomous legal person. What’s more, when directors go against shareholder wishes—even when a loss in value is documented—courts side with directors the vast majority of the time.
Real world example: Tim Cook said outright, in an Apple shareholder meeting, that he did not consider the ROI on every decision. He's still CEO; to my knowledge no one has even sued over the statement.
Do shareholders not elect a board of directors? Do the directors not have hire/fire authority over the executives?
Not saying this chain of authority micromanages every decision, but I suspect it's the rare CEO who goes out of his way to upset the board. Or is there some law that allows the CEO to say "You cannot fire me" (outside of anti-discrimination laws or such)?
(I'm not a lawyer so take this all with a pinch of salt.)
Fiduciary duty is not profit optimization. It basically means you need to be responsible with the company's money. You can't spend it on hookers (well, unless that's your companies business). It's basically a "don't waste money" rule, not "earn lots of money". Basically, the idea with corporations is that the shareholders own everything and the management is taking care of all the assets; it's not the management's so the management has to be careful not to waste money.
For example, legal guardians have a fiduciary duty.
> Dodge v. Ford Motor Co.
"The Michigan Supreme Court held that Henry Ford could not lower consumer prices and raise employee salaries. In its opinion, the discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto. Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoliation of the company's assets. The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $19.3 million. It said the following." (from https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.)
"Among non-experts, conventional wisdom holds that corporate law requires boards of directors to maximize shareholder wealth. This common but mistaken belief is almost invariably supported by reference to the Michigan Supreme Court's 1919 opinion in Dodge v. Ford Motor Co.[5]
Dodge is often misread or mistaught as setting a legal rule of shareholder wealth maximization. This was not and is not the law. Shareholder wealth maximization is a standard of conduct for officers and directors, not a legal mandate. The business judgment rule [which was also upheld in this decision] protects many decisions that deviate from this standard. This is one reading of Dodge. If this is all the case is about, however, it isn’t that interesting.[6]"
> eBay v. Newark
"When eBay refused to sell, Jim and Craig deliberated with outside counsel for six months about how to respond. Finally, on January 1, 2008, Jim and Craig, acting in their capacity as directors, responded by (1) adopting a rights plan that restricted eBay from purchasing additional craigslist shares and hampered eBay's ability to freely sell the craigslist shares it owned to third parties, (2) implementing a staggered board that made it impossible for eBay to unilaterally elect a director to the craigslist board, and (3) seeking to obtain a right of first refusal in craigslist's favor over the craigslist shares eBay owns by offering to issue one new share of craigslist stock in exchange for every five shares over which any craigslist stockholder granted a right of first refusal in craigslist's favor. As to the third measure, Jim and Craig accepted the right of first refusal [7] offer in their capacity as craigslist stockholders and received new shares; eBay, however, declined the offer, did not receive new shares, and had its ownership in craigslist diluted from 28.4% to 24.9%."
" eBay asserts that, in approving and implementing each measure, Jim and Craig, as directors and controlling stockholders, breached the fiduciary duties they owe to eBay as a minority stockholder of the corporation."
I didn't understand this completely but it looks like craigslist was trying to restrict eBay's usage of the stock and that's a breach of fiduciary duty because eBay is a minority shareholder of craigslist and so craigslist is harming shareholders by their actions.
Perhaps it's an "emergent property" of the system of laws, and culture, that are in place?
How much "charity", percentage wise, do you think corporate management could actually take part in? (I don't mean P/R posing as charity costing 1% of net profit, I mean things like deciding to do something cleaner/safer which would cut net profit on a major product in half)
Those can also be looked at as cost reduction measures: medical premiums, lawsuits and regulatory fines result from blatant negligence. (as well as other indirect effects such as dissuading anybody competent from staffing your death-trap)
But a corporation should have no such leeway. Companies exist for the mutual benefit of the citizens, and their shareholders. Just because we've lost that sense of ethic doesn't make it not true.
Now, the predominant view is "A company can fuck over whomever they want, as long as it lies within the confines of the law", is preposterous. Public corporations are already required to be sociopathic, given the legal requirement of profit (exception given to benefit corps).
Or in much more shallow words, "I'll believe corporations are people when they execute one in Texas."