2002.12.06

2002.12.06

(warning, this entry is incomplete. i tried to finish it but figure that, well, it is a journal. i’ll expound and clarify things in future entries.)

hello, children. today’s rant is about corporate america. yes, that (almost) final bastion of the aristocracy and feudalism remaining in the modern world.

what is a corporation? it is an economic entity that makes as much money as possible for as few people as possible for as little effort as possible and with as little regard for anyone or anything else as possible. the ideals of a corporation are this: make money at all costs and do not allow others to make money at any costs.

a corporation is a legal entity that enjoys rights similar to any real citizen and is protected by certain laws and (in theory) limited by other laws.

well, this all sounds evil! in truth, not all corporations are evil. non-profits can be corporations, many pursue humanitarian goals (medicine, science). however, the final goal is to make money at any cost, whether to guilt you into donating one dollar to their cause or to sell you a drug you need to survive.

corporations are headed by chief officers. chief executive officer (CEO), chief financial officer (CFO), chief technology officer (CTO), ad nauseum. there is also a board of directors, whose function is to collect a salary, play golf and, oh yeah, to serve as advisors for the corporation. serving as a board of directors seems to be an occupation, but i’ve never recieved verification. i’ve never seen the position advertised on craigslist at least. most of them seem to have founded (successful or unsuccessful) companies.

these corporate officers and directors frequently make hundreds of thousands of dollars in personal income and as much or more in “perks”. these perks include the company paying for their homes, cars, country club (golf) memberships, travel (including airlines and hotels), and various other items for personal use.

these fellows are the economic equivilent of the aristocracy. they make so much money they live without want and you cannot easily join their ranks. yet once you do you need never leave it even if all your corporations go bust. often the children of these fellows follow their parent into the same positions. as the position is “appointed” it cannot be said to be inherited. but let’s call it what it is; shit is still shit no matter what language you use.

so we have our aristocracy. we also have our serfs (the wage and salary workers) and feudal wars (keiretsu in japanese, along with hostile take overs, intellectual property infringement, etc). the few in the aristocracy rule over the lives of their vassals though the vassals in truth do all the actual work and the corporate entity would crumble without them. the wars affect the serfs the most as well. thousands are let go without regard. why? because of money. making money.

corporations are, for better or worse, necessary for the economic well being of any successful country. they employ the people, they build incidental wealth for the country and society at large, and depending on their business can have huge impact on the world at large. i believe if you look at countries that are failing to thrive you will find a distinct lack of local economic corporations.

corporations today are under fire. Enron, WorldCom, AOL Time Warner (aoltw), various security and loans (anyone remember the bush family involvement in these?), Microsoft… all of these have come under or are under government scrutiny for a variety of “unethical” or disastrous and illegal practices. yet in all cases the goal was simply to make money. in this context what they are being investigated for is clear. Enron et al for blatant lies and cooking the books. Microsoft for being too good at making money (no comment right now about methods; different discussion). aoltw for possibly being too good at making money by possible cooking books.

yet, as i said, corporations are necessary for the economic health of a country. so, how do we fix these problems? what follows are a few practical solutions and some theory which will probably never be followed because it goes against the grain. that is to say, it goes against the simple goal of making as much money for as few people at any cost.

practical solutions:

1: severance packages.

as the goal is to make money, some one has to give. when it is not the consumer the money must come from somewhere else. frequently the money comes in the form of employee reductions. this saves companies money from salaries/benefits and overhead (lay off 1000 people, you can save about $300,000 in computers and office supplies). also, i believe the corporation recieves some sort of compensation from the government. this causes ill will towards the corporation, reprisals are not unknown, higher unemployment rates, and a host of other factors that probably have never been computed in terms of actual cost to the corporation (nevermind the social ramifications). however, a better solution presents itself. get rid of severance packages. for those of you who may not know, the corporate aristocracy -high and low- have clauses in their contracts which say that if they are asked to leave (fired, in colloquial english) they recieve money in the form of a continued salary, stock options, a huge lump sum of money, or any combination of those. i seem to recall that some idiot here in san francisco’s severance package was millions of dollars even though he drove the corporation to oblivion. solution: get rid of or at least seriously curtail severance packages. if the person cannot help the corporation make money, there is no reason he should be kept, and if not kept there is no reason he should continue to be a drain on the corporate income. the money saved could help keep some of the serfs employed, too.

1.5: end the perks.

while we’re going over executive contracts, let’s cut the perks. perks cost money. yeah i can hear them all crying now about not getting a car. ok, we’ll give you a car. you get a car like everyone else, maybe a honda civic, but that’s it. everything else you buys yourself. you know, the serfs making $45K a year somehow manage with a car payment, a house payment, and kids. i’m sure you can manage somehow with $500K a year. so quit crying.

2: incompetence costs.

related to the previous solution is: do not keep incompetent workers. they are a drain on capital at any level in the company. this is not to say that you should expect 100% work 100% of the time, but there are some people who do absolutely nothing, who cannot do the job they were hired for, and/or cause so much disruption that they still cost money. develop methods to find and eliminate these serfs, no matter what level they reside in the structure.

3: cash in hand is worth…

what works small often works big. look at the local economically responsible family. how do they manage their finances? very carefully. they do not purchase something unless they can afford it, cash in hand. so, stop borrowing money. stop spending money on projected income. sure, sell your stock, but always attempt to purchase that stock back. after all, no matter how you twist the wording stock is just another form of loan. if you want to expand, earn the money first. if you decide you must get a loan make sure you can afford to pay it over a short amount of time with the income you already are making. then bloody well pay the thing off immidiately.

4: kill all marketers.

it sounds harsh, but look at where many companies budget money. where does the most money go these days? look at your marketing department. what do they do? do they make money? they say you have to spend money to make money; do you really need to spend *that* much money? marketers are one of the primary reasons there is so little consumer trust in corporations. no consumer with an inch of intelligence believes the poop marketing departments put out. i am not saying eliminate the entire department, but most of it could go. at worst, cut their salaries in half, because anyone could do their job. really.

theoretical solutions: meritocracy.

a long time ago we had monarchies ruling most of the world. the hapsburgs, the english throne, the emperor of china, even the vatican, and etc. then (forgive the extreme simplicity of this jump) when people got tired of that things started to change, very slowly. democratic principles, where the power shifted from the elite few to the masses (who then chose who would lead them).

however, as i hope is seen by now, the aristocracy moved. they became chief officers and board members of various corporations. look at our own government. who holds the positions of power? most members of congress at some point sat or are sitting on boards or “running” corporations. our presidents are the same. who leads us? our economic aristocracy.

communism attempted to solve this problem but failed. why? because their system was resplendent with corruption and an economic system that couldn’t support itself.

so how do we solve the problems corporations are facing *and* bring a sort of democracy to the serfs working for the economic aristocracy? one start would be to implement some of the solutions i outlined above. curtailing some of the priveleges and increasing the accountability of chief officers and board members would greatly increase the income of a corporation because these people would genuinely have to work (which isn’t to say that some of them don’t, because some of them do).

however, to greatly change things requires a paradigm shift, at all levels. workers: how many managers have you had that were incompetent at their jobs, or weren’t necessary at all? managers: how many workers have you had that weren’t qualified for their jobs or that cost more than could be justified but you coudn’t get rid of them?

i propose for the corporation the framework of a meritocracy. what does this mean? it means you get what you earn. it means that if you can’t do the job, you don’t keep it. it means that unions will not be necessary. it requires a shift from the thinking “make as much money as possible for as few people as possible” to “make money.” it requires checks and balances to be implemented.

Categorized: grrr   rights   thoughts

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One Response to “2002.12.06”

1. douglas.nerad » Ten Most Overpaid Jobs says  (February 12th, 2007 at 20:33:16 )

   [...] I’ve written about them before and you can read about it [...]