Citizenship Tax (1)

The adverse effects of the immense growth of corporate power over the past 150 years have been described elsewhere, including by Stephanie Blankenburg and Dan Plesch writing on the Open Democracy site. Less has been said about practical ways to curb that growth.

The central problem is that our society has no penalty for greed, and "a society with no penalty for greed is flawed."

Greed is an extension of the pursuit of self-interest. It is not an evil we can address objectively. If we are to inhibit it, we must do so indirectly. What I write here will describe a method of harnessing our natural pursuit of our own interest and changing it from a destructive force to a productive one,

Self-interest is part of self-preservation and "Self-preservation is the first law of nature". It applies to all organisms, living or corporate. The methods of self-preservation vary, and are generally applauded as "survival of the fittest". However, it can be shown that, carried to extremes, self-preservation is destructive of the preserved entity's environment. Beneficial though Darwinism may be in a purely theoretical sense, if our society is the environment being destroyed, we must do what we can to prevent it.

Societies restrain undesirable characteristics by a variety of forces. They initially deal with excesses by parental guidance, disapproval, peer pressure, appeal to conscience, excommunication and other non-physical methods. If these fail, it condemns the act by mandate and authorizes a force to control it. A central feature of the process is identification of the characteristic to be restrained.

These mechanisms work until a rogue is able to influence the forces society creates to control it. Since I'm discussing our tendency to pursue our own self-interest, I'll focus on the rogues who carry that pursuit to extremes.

By far, a rogues' most effective means of evading control is by influencing those who make the rules intended to control them, to render legislation ineffective or to divert its impact. Evidence of the abuses assault us daily. We constantly get fresh examples of the manipulation of our governing and regulatory bodies. Our subdued reaction to such events may be due to our recognition that they are simply additional evidence of our natural venality. In any case, we accept them without considering whether there is a way to make them less productive for their purveyors and less destructive for us.

While one may recognize the existence of rogues after they have achieved rogue stature, we have no mechanism for penalizing them or inhibiting their greed before it becomes intolerable. However much we are offended by what we perceive as greed, the basis of our complaint is always subjective.

Our traditional way of dealing with rogues in society requires that they be identified, so the lack of an objective measure, the inability to point a finger and say so-and-so is a rogue, seems to present an insoluble problem. That's not exactly true. We may not be able to point a finger at a specific target, but we can certainly recognize the characteristics rogues share and the circumstances under which they thrive.

One quality the most destructive rogues have in common is great size. This, too, seems to present a paradox: The achievement of great size springs from the best of human capabilities. Size is attained by talent and can't be criticised simply because it reaches some specific extent. It is the result of a natural pursuit of self-interest, which, over time, becomes synonymous with self-preservation.

Thus we have a conflict: Size is achieved through ability but the beneficial effect of the enterprise evaporates when growth is unfettered. As entities grow into rogues they believe their best interests are attained at the expense of the community rather than in harmony with it. As they grow, they target the wealth of communities, and suck it out, leaving an empty husk.

Our attempts to control cancerous growth fail because we try to outlaw identifiable evils. Such laws are easily subverted. The larger the enterprise, the greater the pool of talent available to devise the methods of subversion. The result is behemoths which have a vacuum cleaner effect, sucking up resources to the detriment of our communities and our citizens.

To summarize, we know that rogues exist and we know they are injurious to the humans among us. Yet, after carefully looking at the matter, we find that the entities we call rogues started out by being very good at what they do. If we had their pool of talent, we might evolve the same way ourselves.

Hence, the conflict: On the one hand, we seek excellence and applaud success. On the other, these conditions, unrestrained, breed rogues. How can we resolve this? How can we constrain the rogue while encouraging excellence and success?

The most direct way is to make excessive size a burden.

When we think about preventing excessive size, we run into the fact that some businesses must be large. Public utilities, for example, require a huge infrastructure and great gobs of capital. Hence, although rogues tend to have great size, great size may not identify a rogue. So, our solution to the problem must focus on unwarranted size. It must not injure large entities whose size is dictated by necessity.

Growth requires nutrients on which to feed. For corporate growth, the nutrients are the availability of physical and human resources and an environment conducive to growth. In the United States, the resources are a wealth of raw materials and human assets; the environment is provided by our government. The use, or exploitation, of these assets is what allows inordinate corporate growth.

Viewed in this light, we can see that growth flows from citizenship. If an entity is to grow, the society in which it functions must allow growth, so we can say that entities grow as a direct result of their citizenship.

We have seen that growth is, by definition, exploitive. This is not to say that exploitation is an evil. It only becomes an evil when it is excessive. Entities grow by exploiting the nutrients in its environment. That is precisely the goal our society seeks to attain. It can not be condemned simply because it exploits the environment. However, unrestrained exploitation results in excesses. If we are to control the excesses, we must have a means to discriminate between justifiable size and unwarranted growth.

Fortunately, we have a simple, readily available measuring stick. The best measure of size is the total revenue an entity receives in a specified period of time. (I use the term "revenue" to mean the annual gross receipts of an entity, without reserve or allowance, less amounts paid to external vendors in which the entity has no managerial, directorial or financial interest of any amount or kind.) We can say, objectively, that the more revenue an entity generates, the larger it is. This is not a subjective opinion, it is a verifiable fact.