Practically A
Solution
For
Ameliorating the Discord Inherent in a Society of Economic Inequality
In recent months, before winter and
sanitary needs set in, a stroll in a familiar park was disrupted or
totally prevented in cities and towns throughout our nations (and
others) by protesting occupiers of those spaces. By
self-proclamation, they represented the economically lower 99% of
Americans disproportionally removed from the nation’s financial
wealth, as embodied in investments principally owned by the other 1%.
While this 1% owns 43% of the interest in corporations (and the next
19% owns another 50%), the vast majority of Americans have only a
small slice of control over corporate actions which define their
jobs, income, goods and services to purchase, and general economic
world in which they live.
At the beginning of the 19th
century, there were only 300 corporations in America (and only eight
were in manufacturing). Now, a bit over 200 years later, there are
nearly 6 million of these legal fictions allowed to act with the
privileges and obligations granted to a “person” under civil law.
With the ability to gather the resources and powers of many
“natural” people into a single “corporate person”, these
entities conduct vital business in our society in a coordinated and
self-perpetuating manner beyond the scope of mere human individuals.
But whether with fear, resentment,
and/or envy, we are reacting to the corporate Pinocchios not only
escaping the control of their human creators, but grasping the
strings to dictate the stage and the play of our human drama. Their
collective lobbying and legal actions over the last two centuries
have extended their privileges seemingly beyond those of natural
citizens while avoiding, or at least diminishing, the extension of
their obligations. It is right that they have done so, for their
fiduciary responsibility required them to gain value and better
advantage for themselves (and thus, indirectly, for their owners).
It is what made (and still makes) America grow. But both the owning
and non-owning human citizens of America now share their relative
disadvantage to our fellow corporate citizens.
Recently I was asked by a learned
friend if I might apply my modest skills of research and analysis to
examine this issue. The nature of the situation has been studied and
discoursed upon by many before me, both scientifically and
emotionally. For somebody to come forward with a plan to balance the
dynamic needs of an economy for investment of otherwise unencumbered
funds and the incentives of prosperity to drive productivity and
progress with the egalitarian desire for all society members to
participate contentedly in our shared community would be worthy of
universal praise. Humbly, I present such a plan herein, not for
fame, but for the simple benefit of restoring our American unity and
pride.
While the reason it has been overlooked
heretofore is unclear to me, the solution is obvious. Natural
persons need to become corporations. Humanity has run its course as
a basis for society and its exchanges.
My fair reader may ask, how does the
flesh and soul of our humanity holds us back from the benefits of the
artificial embodiment of corporations?
Mortality.
Unburdened from the frailty of flesh, the corporation is prepared to
be immortal. While in actual fact an incident of unfavorable cash
flow can be as lethal to a corporation as excessive loss in blood
flow, the lifetime of a corporation is independent from those of its
mortal owners (and employees).
Liability.
Bound by personal responsibility, humans have the
consequences of their actions able to tap into (and deplete) all
their available resources for recompense, whether related to the
actions or not. Corporations limit the liability felt by its owners
to only those resources invested in the corporate enterprise. Buy a
million dollars of stock – risk a million dollar loss, but never a
larger one.
Criminality.
While corporations are persons of legal standing,
corporations lack the body to serve the time. Even the
managers of corporations seem rarely to serve punishments for the
“white collar” criminal misbehavior and malfeasance; they are
more often seen to be rewarded with retention bonuses and stock
options for their clever (albeit failed) stratagems to test the
bounds on the behalf of the corporation. Owners not employed by the
corporation are clear of personal risk of such charges, bearing only
(limited) financial risk. The corporation picks up the tab for any
penalties and changes its practices to avoid (being caught)
committing such offenses again.
Taxation. The
corporate citizen pays its taxes. But the rules for income and gains
versus expenses and losses recognize the long term nature of the
corporation and its needs to perpetuate, grow, and even thrive beyond
a mere tax season. A person receiving $10,000 in income and spending
$5,000 to feed and clothe the demanding body required to earn that
income is still liable for taxation on the full $10,000. But a
corporation selling $10,000 of goods to produce its income and
spending $8,000 for raw materials, equipment, and labor (by
self-clothed/-fed employees) to manufacture and deliver the goods has
tax exposure merely on the net profit of $2000. The allowable
necessities of human life are limited to standard and well-defined
itemized deductions, while the necessities to conduct business life
are less confined in definition and volume in their cost
subtractions. At the federal level, taxable income of large
multi-billion dollar corporations are treated essentially equal in
tax rates (34-35%) as all but the smallest corporations (net income
less than $335,000) without the disincentive of progressive taxation
to limit their entrepreneurship, growth, and contribution to the
societal economy.
Sexuality and
Sensuality. Lacking anatomical and metabolic components, Lust
drops out of the cardinal sins that tempt and drive corporations.
While the same may not be possible to say for its human owners and
employees, the goals and motives for corporate actions are not thrown
into disarray by hormonal surges. Similarly, the corporation does
not fall prey to the carnal whims of hunger, thirst, nor pain.
Morality and
Religion. The moral duties of the corporation are defined by the
fiduciary trusts in its founding charter. In the very many cases of
“for profit” corporations, that chief responsibility is to manage
the owners’ investments to maximize financial return. All
corporations must act within the rules of Law, but are not generally
bound by the diverse sets of non-secular rights and wrongs of our
many competing religions. Corporations derive their moral code from
that which can be agreed upon by all religions and non-religions, not
their differences. That and what their accountants and market
research tell them.
How does our society convert
humanity into negotiable corporate commodity?
One of the greatest beauties of the
proposal offered here is that its requirements for implementation
have already been enacted in our American jurisprudence. The
replacement of the word “person” with “corporation” in our
legal and constitutional documents is established law under the
prevailing interpretation of the due process of the Fourteenth
Amendment. The simple completion of the process from an implicit
application of our laws to an explicit literal statement in the laws
is a mere find-and-replace operation away. Any word processing
software on the market can achieve this task. It is but a mild
additional complexity to search for “people”, “man” and “men”
(“woman” and “women” if such exist) to perform similar
substituting edits.
As our Declaration of Independence
proclaims, all corporations are created equal and endowed by their
creator with certain unalienable rights (life, liberty, and pursuit
of happiness (profit)). To secure these rights, governments are
instituted amongst corporations, deriving their just powers from the
consent of the governed (corporations).
While initially people of all ages will
need to file their incorporation documents to ensure their rights
under the United States of America Inc., henceforth the process of
citizenship would commence at birth (or as the final step of
naturalization – hereafter called “citizen acquisition mergers”).
Following a two-week investigation and review period triggered by
the IPO filing for the newborn, the parent corporations will issue
the standard (and universally equal at creation) one thousand shares
in the new incorporation. Such issuing corporations may elect to
retain full or partial ownership in their progeny under market
rules, but, after standard processing fees and commissions, they
would share equally (or as stipulated in a procreation contractual
agreement between the parties) in the net proceeds of the sale. Such
funds as are so raised (supplemented as decided in subsequent
transactions) should be prudently managed to ensure the rearing of
the new corporate resource to a productive and autonomous adult
entity.
At the attainment of adulthood, the
shares in an individual corporation shall be doubled (to two
thousand, or more as necessary to accommodate earlier stock splits
and allowed subsequent issuances) with the new half assigned to the
newly matured entity. Again, the new owner may elect to retain all,
part, or none of these new shares dependent of its own desires and
decisions related to the prevailing free market value at that time.
It would be common practice for most adult individuals to retain at
least partial ownership in themselves to allow for some future free
will.
Thus, no individual will lack value and
presence in the affairs and conduct of business in America.
What advantages will society and
civilization gain by converting to a corporate basis?
Commodity.
Even the poorer citizens will have something valuable of their own.
While all human resources will not be of equal total value, the
marketplace will ensure a merit-based evaluation of their portfolio.
Government.
The derivation of legislative, executive, and judicial powers of the
government from corporations will eliminate the often messy process
of elections by the populace. While the tabulation of corporate
opinion may still be more efficiently implemented with term-selected
officers mandated with the management duties to make and enforce
intercorporate laws, the politics of such selections would be
streamlined to simple concensus amongst shareholders deciding each
corporate vote. Most individuals may not even be troubled to express
their opinions with their proxies having been assigned on controlling
ownership by holding companies and other corporations.
Incarceration.
With the shielding of personal responsibility under corporate
ownership, the practice of imprisonment of offenders will disappear
(or at least greatly diminish). This will be a huge cost savings in
America where more than one person out of every two hundred adults is
residing in our jails and prisons on the average day. The switch to
civil penalties instead of criminal-corporeal punishment will not
only eliminate these expenditures, but also develop a robust source
of revenues for the operations of our federal, state, and local
governments.
Civil
Agreement. The existing law covering merger, acquisition, and
divestiture will become the basis for the often emotionally entangled
relationships between humans. Parenthood, marriage, and divorce are
the most obviously improved under properly drawn contractual
agreements. Freed of overriding personal issues of gender, religion,
age, race, etc., corporate mergers will allow all unions considered
in the best interest of the owners to be negotiated and implemented
(with customized clauses and riders as agreed by the parties).
Perhaps less
obviously, but certainly as dramatically, affected are employment
relations. The daily value of a human resource's production is a
necessary commodity for which an employer must compete. Without
contractually granted rights to draw upon these resources, the
employer has no employees. Other organizations seeking membership
and contributions (churchs, charities, even leisure/recreation clubs)
will also be in the bidding for favorable agreements with the owners
of these resources.
Reinvestment.
There has been considerable controversy and agitation over
inheritance following the demise of persons. The heirs of the
deceased feel entitled to the fruits of his/her lifetime of
accumulation and often argue (or at least complain) about a division
of assets based on the capricious “will” left behind. But under
corporate ownership rules, the division of the assets retained by the
deceased are dictated clearly in the proportional shares of ownership
in that individual. Whereas individuals enter into the incorporation
of USA Inc with one thousand shares, their departure (and revocation
of corporate charter and its associated privileges) should similarly,
in balance, require an absorption of one thousand shares at their
current market value at time of death by the government (to control
inflationary pressure due to overissuance of stock in the total
market). The reinvestment of value is thus ensured into both the
private and public sectors of the economy.
Do we need to give up our humanity
to achieve peaceful accord in our society?
There
may be some who argue that tweaks of the status
quo are all that is
required to calm the tensions and discord we are experiencing. It is
difficult to share their enthusiasm and belief after witnessing the
gridlock and morass that has stymied past efforts. Who can still
hold hope that the government will enforce the existing regulations,
that industries will calculate favorably the profitability of
self-policed restraint, or that corporate chartering will return to a
requirement of public good as one of the fundamental fiduciary duties
in equal or greater importance to profits? Does anyone expect that
human managers of faceless corporations will truly be held to account
to the public for the subversion and destruction of our economy in
the pursuit of corporate profits? What new regulations can be
promulgated without funding or staff to enforce that will divert the
corporate world from its well-trodden, although ill-advised, paths?
I offer this adaption of our society
without prospect for personal gain on my part. My wife and I are
neither impoverished nor wealthy under the current system and should
have no more political nor economic power as two small corporations
amongst 325 million than are afforded to us now.
