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wasoxygen  ·  1423 days ago  ·  link  ·    ·  parent  ·  post: I Love Corporations

No one argues that corporations can do no wrong. The idea is to compare corporate behavior to that of governments and individuals. Let's make a scorecard for the behaviors you mentioned.

Espionage

Government spying is performed by groups like the CIA, NSA, KGB, and Mossad. These organizations are famously associated with tactics like torture, disappearances, and assassinations, when they are not sparking revolution and war, thereby killing multitudes of innocent people, always with noble intentions.

Corporations perform industrial espionage by snooping around on networks, getting mole employees hired by the competition, copying proprietary information, and "predatory hiring" (beware the evil sign-on bonus!). The intention, for what that's worth, is to make money, a goal shared by basically everyone.

Successful industrial espionage hurts the target business and helps the spying business, and may well be beneficial to customers in the end. "According to a 2020 American Economic Review study, East German industrial espionage in West Germany significantly reduced the gap in total factor productivity between the two countries." There's an article on corporate manslaughter saying that laws in some countries hold corporations accountable for accidentally killing someone. The Straight Dope asks "Do Corporations Ever Try to Kill People?" without irony.

Individuals are nosy and spread gossip.

I need a logarithmic scorecard to keep these values on the same page.

Sabotage

Suppose you see a headline saying that a factory was destroyed in an explosion, and it wasn't an accident. You might suspect that it was a lone terrorist, or a terrorist group. Or if the factory was in a conflict zone, it's a routine act of war. Would it ever occur to you to imagine that Nike is sending Under Armour a message, or Pfizer is playing hardball with Merck?

The cola wars were marketing campaigns. Casualties of obesity are an unintended side effect of giving people sugary drinks that they enjoy, and often continue to consume, even when sugar-free varieties are offered. Even in an egregious case like Philip Morris the corporation does not profit from causing cancer, it's an unintended consequence that kills their customers.

Hostile Takeover

When a government wants to take over another government, the tanks roll and the bombs drop. "At least 108 million people were killed in wars in the twentieth century. Estimates for the total number killed in wars throughout all of human history range from 150 million to 1 billion."

Governments have two main ways of interacting with other governments: threatening war and promoting trade. All of us prefer trade, when corporations are allowed to peacefully exchange goods and services.

A corporate hostile takeover "can be accomplished through either a tender offer or a proxy fight."

A tender offer is a "bid constituting an offer to purchase some or all of shareholders' shares in a corporation. Tender offers are typically made publicly and invite shareholders to sell their shares for a specified price and within a particular window of time. The price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold."

Not exactly Germany invading Poland.

A proxy fight is "the action of a group of shareholders joining forces in a bid to gather enough shareholder proxies to win a corporate vote. Sometimes referred to as a 'proxy battle,' this action is mainly used in corporate takeovers, where outside acquirers attempt to convince existing shareholders to vote out some or all of a company’s senior management, to make it easier to seize control over the organization."

Top Examples of Hostile Takeovers

In September 2009 Kraft Foods Inc. offered $16.3 billion for Cadbury PLC. The Cadbury chairman refused. (The U.K. government stepped in, demanding "respect" for the chocolate maker.) Kraft increased its offer to about $19.6 billion and the two companies finalized the takeover. Cadbury remains the second largest confectionery brand in the world after Mars.

In June 2008 InBev offered to buy Anheuser-Busch for $65 a share in a deal that valued its target at $46 billion. Eventually, InBev upped its offer to $52 billion or $70 a share and shareholders accepted. Anheuser-Busch and Budweiser continue to be household names.

In August 2010 Sanofi announced a bid to acquire Genzyme for $18.5 billion. The board refused. Sanofi negotiated with shareholders, and in February 2011 Sanofi declared the full acquisition of Genzyme for $20.1 billion. Genzyme had merged with or acquired dozens of other businesses in its history. It now employs 11,000 people in some 65 countries.

Monopoly

A monopoly on violence is "a core concept of modern public law" and Max Weber's "defining conception of the state."

What's bad about a monopoly? It removes freedom of choice; everyone has to use the same provider. You may be satisfied with the DMV, but if you're not, too bad. There is no built-in incentive to improve service or reduce costs. When law protects a monopoly, there is no pressure from small, agile startups moving in when a bureaucracy is slow and inefficient.

I can't think of any corporate monopolies that seem harmful on balance. Even De Beers has lost dominance. This could be a success of vigorous antitrust enforcement, but there are natural corrections for monopolistic behavior in the market. Dominant corporations like Standard Oil and Amazon get big and powerful by pleasing customers with low prices (sometimes with ruthless behavior toward the competition). There's always fear that a company like Amazon will grab all the market share by selling cheap diapers and then suddenly pivot, abandoning the business strategy that has made them successful and start jacking up prices to rake in even more profits. If this ever happens it would be the opportunity for startups to jump in and profit by undercutting the big player. Amazon has many advantages in that it can survive price wars (which are great for customers) longer, or buy up competing startups. But unless Amazon can get government protection from competition, it will eventually go broke acquiring a series of copycat startups. Thus Amazon sticks to its proven mission of pleasing customers.

If you don't like the dominant business, you can switch to the nearest substitute or do your best to go without what they offer. It's not a perfect solution, but at least you don't have to spend your money to keep the business in operation. If enough customers think and act like you, the business will wither, creating opportunity for a better provider.

What do you do when you are dissatisfied with a government service?

1. Go without the service. But you'll still pay for it, so nothing gained.

2. Write a letter to your representative. They will send a form reply.

3. Wait for the next election cycle.

4. Find another politician who promises to do a better job.

5. Vote for them. Your vote has almost no chance of changing the outcome. If the election is that close, it will be reviewed and the candidate with more influence will probably win.

6. Hope that the new representative keeps their promises.

Most of the behaviors in these four categories are organized, not individual, so the mystery to me is why corporations would be perceived as more evil than government.

Summing up:

Espionage: Torture, murder and war versus stealing information to make better products, and stealing employees by giving them a better offer.

Sabotage: Literally destroying factories, bridges and hospitals versus destroying the reputation of Brand X.

Takeover: Dropping bombs, murdering and terrifying civilians, killing leaders versus winning over reluctant shareholders with an offer too generous to refuse and sending the leader off with a golden parachute.

Monopoly: By design, services provided by single providers with compromised incentives and low approval ratings versus Apple, Amazon, Disney, FedEx, Netflix, Nike and Starbucks and engaged in a daily struggle for survival won by those who delight their customers better than the innumerable competitors trying to take their places.

You don't have to love corporations; it's certainly not fashionable. But there ought to be some proportion!