Douglas Rushkoff understands the bigger picture implications of how the Obama administration handles the BP oil spill. This, of course, relates to the problem of corporate personhood stemming from limited liability, and opens up space for us to think about alternative approaches to the firm in our society.
In the latest round of empty fist waving by Obama and apologetic posturing by BP, the President raised the issue that while BP has spent a few tens of millions on the cleanup effort and damages so far, the company’s annual dividend to shareholders is about $10.5 billion. The company is acting as if all its resources are being diverted to address this spill, when – financially anyway – this is clearly not the case. So as a way of changing the widespread perception that it is underspending on the crisis, BP suggested it might “suspend” – meaning pay later, not never – its quarterly dividend. A gesture of goodwill.
What a brilliant move. By suggesting they might suspend their dividend, BP initiated widespread panic about what would happen if that dividend were compromised in any real way. All of a sudden, business newspapers and cable channels begin calculating just what this means for shareholders – those people and institutions who park their money in an oil company and expect returns. How many pension funds have invested in BP? And how many retirees in England have made the oil a company a central part of their retirement portfolios, and are depending on these dividends to maintain their quality of life?
So now, instead of an transnational oil company against the American gulf fishermen, beach workers, and ocean itself, it’s the interests of presumably innocent British pensioners against American workers. We’re supposed to limit BP’s liability for wrecking our lives and our planet, because of the impact that appropriate penalties will have on those collecting dividends off the oil company’s crimes against us. This means bailing out the company by using government funds to pay for its spill.
[Photo design by J-cal76 at LogoMyWay, ht:dfr]
” . . . it’s the interests of presumably innocent British pensioners against American workers.”
Presumably innocent? Why “presumably”? And why “against” American workers. Is this the taxes-pay-for-spending myth? Has this cleverly been turned into a war against England?
And what about American pensioners? And British and American employees? Clearly, Douglas Rushkoff does not understand the bigger picture, which very simply is:
Government pays = people benefit; BP pays = people pay.
Message to President Obama. Kindly get off your butt and hire a million people to start cleaning up, rather than engaging in political finger pointing. We need the employment. We need the cleanup. Time’s a’wasting.
Rodger Malcolm Mitchell
Message to President Obama. Kindly get off your butt and hire a million people to start cleaning up, rather than engaging in political finger pointing. We need the employment. We need the cleanup. Time’s a’wasting.
Exactly. The government should have taken over from the beginning, kept careful accounts, and sent the entire bill to BP.
Bill of attainder
The bigger picture includes taking a look at the changing institutions in our society. Often, we assume that the way things are today is the way they have always been. 150 years ago, the business corporation was a fairly insignificant institution, often times created temporarily. Shareholders were held liable. Today, it has evolved to the dominant institution in our society.
This bigger picture allows us to think about how to prevent future crises by fixing the systemic problem. If you just put the cement mixers in jail and have the government pay for the clean up, you are essentially giving BP a free pass and encouraging it to continue making risky decisions without ever having to bear the negative results. This is a recipe for continued environmental disasters after this one is cleaned up.
Once we focus on how the evolutionary process and the role of institutions shapes economic behavior, we can take a critical look at these institutions and begin to imagine alternative approaches to the firm, because it has changed and can continue to change.
When you write on your blog:
“But, wait. What is BP? It’s a legal description, nothing more than words on a piece of paper. It has no physical existence. You can’t punish BP any more than you can punish a law or a page of sheet music. BP, as a legal entity, neither caused, nor can cure, the oil spill.”
…in fact BP is much more than words on a piece of paper. Any corporation is legally recognized as a person in the US. BP can buy and sell property, it can borrow money, it can sue in court, and be sued. But what kind of person is BP? Well, one without any moral values or soul to save. One that is only responsible to its shareholders, not other stakeholders: the consumers of oil as well as people who make a livelihood in the Gulf of Mexico.
“If you just put the cement mixers in jail and have the government pay for the clean up, you are essentially giving BP a free pass . . . “
You have it backwards. If you fine BP and don’t put the responsible people in jail, that’s when you give BP a pass. Do you really think the executives of BP, a company that makes many billions in profit each year, give a damn about company fines? Naw, those fines don’t reach them.
Focusing on the non-person BP, gives all the responsible people a free pass. The cigarette companies learned that.
By the way, BP does not “buy property, borrow money, sue in court.” It is a wooden puppet, a mere front for its masters. It’s Charlie McCarthy. (Remember him?) It has no brain, no pain, no fear, no hopes, no memory and no morals. It learns nothing and cares about nothing.
If you want to accomplish deterrence you have to punish the decision makers, not the wooden puppet. When you come home, mad at your boss, do you kick the dog?
Rodger Malcolm Mitchell