The Untouchables – Why it’s getting harder to stop multinational corporations
foreignpolicy.com
foreignpolicy.com
It was really a shock to me that the implied values of an organization could be wildly different than that of the individuals involved. I had just assumed that they would naturally be the same.
In retrospect, that seems ridiculous. Even making my own values and actions coherent is a ton of work. The bigger the organization the harder that gets, and most companies just never do that work. Everybody responds to their local incentives, and they're generally pretty decent to the people they interact with. But they very quickly stop noticing the broader context they're part of. Which shouldn't surprise me either; Upton Sinclair wrote: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
I'd say an attachment to money is one of the most human capitalist motivations on the planet.
It is more like an AI with one directive to seek that most human motivation of greed to the exclusion of all else.
I cured myself of these beliefs when I looked at how reality actually works (and when I stopped smoking weed). When Louis Gerstner turned around IBM as the company's first outside CEO, that was a result of his decisions and vision, not the emergent decision-making power of IBM. More fundamentally: people can think about companies, companies can't think about people. There are no collective minds, only individual minds working together.
The actual article in interesting. It sounds like Russian/Chinese/non-Western multinationals are growing in power, and with significantly less scruples than their Western counterparts.
My point is not really to present the thought as a deep explanatory insight into the universe but more to get people to apply an existing mythology of powerful otherness to corporations. An interesting POV to consider, nothing more.
And I think that while corporations don't quite think, they do use business rules and abstracted information about individuals to trigger actions. The humans writing those rules are probably reasoning differently about the rules than they would the individual decisions. The corporation can become more than the sum of it's parts through very simple mechanisms.
Throughout my career I've been amazed at how differently things looked from different levels of the organization. That is in part due to information compartmentalization (required in publicly traded companies) and in part due to variation of practical versus vision type goals. Sort of "keeping the lights on" vs "staying ahead of the competition."
In my experience the reason is often that the rationale for the decision, say shareholder perception, is not something that the majority of people working actually spend their time caring about. As the actions move further from the rationale, you start to get emergent behaviour.
This is exacerbated by the tendency of managers to feel a need to do something even when not doing anything is demonstrably better. So I often see cases where someone senior make a fairly throwaway comment of the form "What are we doing about X?". Even if the answer is nothing because nothing was a perfectly reasonable thing to do, the effect of the question is that something gets done. The higher the level of the questioner the more activity it tends to generate.
That's actually good news of a sort. It might imply that corporate behavior might still be governed by a program of targeted .....?
Just thinking out loud here folks...
> Corporations do not share our priorities. They are hive organisms constructed out of teeming workers who join or leave the collective: those who participate within it subordinate their goals to that of the collective, which pursues the three corporate objectives of growth, profitability, and pain avoidance. (The sources of pain a corporate organism seeks to avoid are lawsuits, prosecution, and a drop in shareholder value.)
If there were automated ways to create a corporation and give it legal personhood, along with an offshore bank account, the possibility of the emergence of self-sustaining autonomous corporations may become more of a certainty.
In fact, most of the pieces are available: lots of servers offer some free bandwidth and some free hosting space, bitcoin wallets can be opened, ready to receive donations from people all over the world... There just needs to be a software engine that can create content people want in an autonomous way and here come the Vile Offspring.
Take a look at the [DAO](https://en.wikipedia.org/wiki/Decentralized_autonomous_organ...) concept. These are currently being built and deployed on the Ethereum platform. Sounds like a real world version of what you are theorizing.
I also love this quote: "Sometimes confused with a restaurant, [McDonald's] is actually a piece of licensed software 600 pages long, with a QA department, currently running around 14,000 instances in America."
http://www.ribbonfarm.com/2013/12/01/algorithmic-governance-...
Then, it gives an example at length that doesn't have anything to do with multinationals. Instead, it's a classic example of corruption and land-grabbing. But while these problems are prevalent in much of the developing world, there are certainly huge differences between different countries. E.g. here in Kenya, land-grabbing is rampant, but its usually smaller cases, and the public increasingly fights back (see e.g. https://www.standardmedia.co.ke/ureport/story/2000163954/lan...)
Nevertheless, the article chooses to present an example from Zimbabwe of all countries, one of the worst-governed countries on Earth, as representative.
There was another recent article on Foreign Policy which summed up the land-buying/grabbing situation across Africa much more balanced: http://foreignpolicy.com/2015/10/20/the-myth-of-the-african-...
The reason why it's hard to stop huge multinational corporations is because they're unaccountable to the public, and because they're in league with governments. Legislation usually favours these huge corporations as a consequence.
Also the way ownership and property rights are actually codified into law is very weird when you consider it from a global perspective. The reason shell companies work is that on some level the owners are not actually considered owners but on another level they are.
I suspect the more likely explanation is that they have enormous influence because they have a lot of money. We certainly have a lot of evidence that people with lots of money continue to have a lot of influence even when they don't employ a lot of people.
Do we? The tech industry for example makes enormous amounts of money, but has relatively little political influence because it employs relatively few people in relatively few states. Sundar Pichai can't call up a Congressman in Indiana and casually mention the 5,000 workers they have in Fort Wayne.
* new industry, therefore less entrenched in existing power networks * until recently, relatively low spending on lobbying * technology people not known for political savvy * technology people inclined to assume that merit and savvy will carry the day * tech industry leaders more ethically inclined, or at least less inclined toward legalized bribery
I don't think making money is sufficient. Politicians care about other people's money because they can get some of it.
This political obsession with jobs seems to be a relatively recent phenomenon. Perhaps going hand-in-hand with the rising influence of corproations. It makes one wonder if the myopic focus on "job creation" is really what politicians should aspire to.
That's the entire point of the article! It's saying that when (inevitably) US/EU business do terrible things then there are mechanisms available to try and stop them.
However - it claims - those mechanisms don't exist or a re weaker for multinationals outside EU/US.
Not promoting narratives of western/white guilt is not the same thing as being "biased".
The majority of the problems in the 3rd world are caused primarily by native interests and inside forces - that are corrupt, divisive, don't care, will brutalize their own people, etc.
Yet the majority of stories completely absolve those parties, and focus entirely on the west.
And because of this, for this reason, the problem never gets solved.
Frankly, I'd be looking very closely to find links between multi-nationals that straddle two developing countries, and the larger, better known corps. It would be just too convenient to do business like that through an easily-defended, easily discarded puppet company.
The unfortunate truth is that there's nothing we can or should do, above and beyond our general promotion of free speech and suffrage. It's not our country, and there are plenty of examples of the strong preying on the weak here to keep anyone inclined to injustice-fighting quite busy.
This seems like a PR piece for multinationals. Having set the tone of the article he barely touches multinationals aside from how accountable they are. Which clearly they are not. He's talking about national organisations in developing and corrupt locations. That's not exactly new.
If the conditions in Angola or Bangladesh are so bleak and unregulated why do we permit any trade or multinationals to do business there? If the country couldn't trade on the world stage until some level of accountability and minimum standards of treatment were met, perhaps things would change.
Our systems never evolved to cope with trans-national corporations, having evolved to regulate national corporations. We're comparatively powerless to regulate a multinational.
Having got to the size and power they are they can bankroll, fund, lobby and threaten to move their 20k employee operations elsewhere. They can play creative games with national tax codes, and may have an entire department with some very clever minds doing just that. Governments are impotent in response.
It doesn't help that modern-day politicians are almost always wealthy, even those of the left, meaning they're investing and thinking in the same way. It's a rare bird indeed that votes or instigates legislation against their own interests.
The olde-worlde politician who had made their way in the world as businessperson, doctor, union official or what have you then became a politician to give something back to the world is a quaint memory of former times. Altruism isn't profitable.
The young property and investing MP worth millions is less likely to introduce measures to produce genuinely affordable housing (build enough homes), or to severely clip the wings of the investment banks or multinationals. They'd be killing their own income for life too.
The chief shareholders in these businesses, the pension and investment funds, would also have to vote against their own interests. Return is everything. Free trade is everything. Advocating for better worker conditions does not provide a return to their pensioners.
The OECD exists to promote the market as the answer for everything.
So who is left to "stop the multinational"? Greenpeace? I'm not even sure from this article what we're stopping them from. Or are they all acknowledged chronic abusers of human rights?
I don't have a fix. I'm not even sure it's fixable at this point. Certainly not by writing pieces telling us how bleak internal conditions are in Zimbabwe.
"The article doesn't even begin to tell us why it's harder to stop multinationals."
It says, 'The countries where they are headquartered are unable to regulate them, and the countries where they operate are unwilling to.'
Later on the author talks about investment from developing countries to other developing countries and the changing composition of the Fortune Global 500, to give a further explanation. He quotes a researcher who talks about leverage and the 'denominator' problem.
"How to stop them what?"
'preventing multinational corporations from violating human rights [...] abuses in poor countries — land grabs, sweatshops, cash-filled envelopes passed to politicians'
"The countries where they are headquartered are unable to regulate them" ... "This architecture is one of the greatest international human rights triumphs of the last 50 years." ... "they’ve raised the cost of committing human rights violations in developing countries."
Well either the regulation is working well or it isn't. It's no longer a piece addressing the shortcomings of multinationals but is a piece pointing out the difficulties dealing with corrupt or overseas regimes. We're now talking of how we trade (multinationals included) with those places. Of course there is some degree of cross-over stemming from trading with.
It's far more about the internals of these places "The majority — all 5,000 of them — sell clothes on the domestic market", leasing land from Zimbabwe's ARDA etc. Now I fully agree that this is an problem, but it is not the same issue. Likewise, internal regulations that he mentions. Many of those are not new. The main example, Green Fuel, in Zimbabwe has no external investors or customers. Where's the multinational angle there?
So yes they're untouchable, but it's a national issue. It's been that way for a considerable number of years in some cases. So let's discuss why we're failing to make other countries more globally accountable. It's clearly important we consider that. How far can we reasonably expect to influence another nation? We don't often send a gunboat like a Victorian govt might have.
Isn't that basically saying that it's not, in this case, multinationals that's the problem here?
We can also talk about about shortcomings multinationals, which I already covered, probably at too much length, in the OP.
> You know where I’m going with this, right? I’m about to tell you that the company behind all this is Monsanto, or Shell, or Coca-Cola. That your car is running on the ethanol this plant is producing. That the U.S. government is funding or facilitating or failing to prevent what is taking place here.
> But none of that is true.
I enjoyed reading this article. It's like a story, and this is 'the twist' - one of many.
Even the first two subheadings are misleading.
"Naming the shameless" - Big company logo... Can I get my pitchfork? Nope. Turns out this company did the right thing.
"Village chief has 500 acre farm, 114 children"... Wow, this guy must be in on it!!! Nope. Turns out he got screwed too.
This is a story about a local company in Zimbabwe and a commentary on companies operating out of developing countries where there is not yet a system in place to penalize destructive behavior.
The only "fix" is to make exploiting people unprofitable or at least very expensive. I suggest that instead of sanctioning entire countries we sanction the individuals responsible for these abuses. The premise of sanctioning a country is that in order to get out of the sanction/punishment the people of that country will pressure, elect, or forcibly replace their leaders to force change. That doesn't work when the people of a country hold no power over their government.
We need to put more resources into finding the individuals responsible for the abuses and sanction them directly. Seize their assets and the assets of those who enable them.
If it means we need to hack or bribe information out of companies like Mossack Fonseca in order to identify those benefiting from human rights abuses then we should do it and be very public about it.
OK, fair point. I'm the first to admit I don't have the answers on this topic.
I fully agree we should be making resources available for dealing with some of these issues, and those responsible, as you suggest.
Does this remind you of anything?
e.x. They force people to mix their shitty ethanol into gasoline (originally 5%, now 15% of gasoline sold). They take advantage of the traditions and steal land. etc.
2. Regulate market capitalization of corporations
I have been thinking a lot about throw(). A function that returns control to the user after a program goes into error.
YCombinator funds small companies and the successful ones typically do some of that by default just by solving a problem those companies overlook. It would not be mutually exclusive in my mind, that a separate fund could support stopping bad companies either by the regular VC model under a mission, or by forming a meta-company that unites a few small companies under a single umbrella and mission.
I assume starting a VC fund/company specifically designed to stop specific companies or industries from succeeding is not particularly "investable" and unlikely to take off, but it is an interesting thought experiment. While YCombinator/Accelerators fund companies solving some of the problems big players miss, another company tries to dethrone them and let the space fragment.
If you want to make it your problem then take a long hard look at all the things you want to accomplish & see if you can fit this one in. Possibly spend 10 years in that part of the world & maybe you'll have a chance to change something.
Blue (black) sky vs. legacy code.