2004-07-28
The Corporation
I saw The Corporation last night at Landmark Ken with ![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
whitewhale, up in Kensington on Adams Avenue just East of Normal Heights. I first encountered this film at the San Francisco International Film Festival, but it was sold out there (instead I watched about two thirds of Route 181, a road trip along the UN partition of Israel/Palestine), and then it's taken its merry time to come down to San Diego for a one-week run.
It's a good film because it presents quite a lot of issues, but I don't think they're all uniquely tied to "corporations." The notion of 'Corporate Personhood' is attacked on the basis that a corporation can at best be a person without a conscience, motivated only by shareholder value, i.e. "greed". Many corporate abuses are chronicled, but few alternatives are given. Nonetheless, I agree with most of the criticisms, most along the lines of "a corporation will do anything to make a buck."
- we were handed a pamphlet crying for an end to "corporate personhood," complaining that, since corporate personhood came about as a result of a supreme court action and not an act of the legislature, corporate personhood is illegitimate because "judges can't make laws; only the legislature can make laws." It really annoys me when I hear things like this. You can't be a champion of judicial review when the courts interpret the law to require, for instance, same-sex marriage, but then cry "judicial activism" when they create corporate personhood. This is particularly hilarious, because "judicial activisim" is traditionally a Republican complaint. Personally, I think the judicial branch is the one branch of government that seems to carry out its duty in a well-informed, rational way.
I'm not against 'corporate personhood'. Transnational corporations, on the other hand, are scary.
- corporations commit a wide array of atrocities on the way to producing a product that people will buy for as little cost as possible. This film puts the blame entirely on corporations. But the fact of the matter is that they are driven entirely by consumer demand. Nobody will actually say that they want to club a baby seal in order to wear a designer t-shirt, but when they vote with their money, that's exactly the decision that they've made. The fact that people still drive their SUV to Wal-Mart to buy Nikes is evidence that consumers Don't Really Care. Style and price seem to be the only determining factors in what people buy. (I put 'style' before 'price' due to amazement at the markup on 'designer' wares.) People vote one way in the democratic process (most people express concern about the environment, their community, etc), but contradict themselves in the marketplace.
One way is to change the rules. If all corporations are held to strict environmental, labor, and other standards, then you can safely choose the most stylish / cheapest product and know that all products available to you were created under similarly environmentally-conscious means.
- This illustrates a big problem with democracy. A direct democracy will give the majority of the people exactly what the want, even if it is the enslavement of 49% of the population. Capitalism is, without a doubt, the most efficient and most productive system for giving people what they want. Of course, it's also a system that makes them want a lot of these things in the first place. Like enslaving 49% of the population so that 51% of the population can live in permanent retirement, it's not a good idea to give people exactly what they want. That's why our government has regulations that restrict the scope of laws and the extent of freedom. That's why we have labor and environmental regulations. That's why we have a representative democracy. And so on.
- Another criticism of corporations that is given is that they have a tendency to fire people, to lay off workers. It's inappropriate to complain about layoffs without also mentioning that corporatiosn also hire people in the first place. I'm all for job security, but requiring that corporations never lay off workers is ridiculous.
- Much is made of the fact that a corporation is responsible only to its shareholders, but not to the community, its employees, or anyone else. So, the question is, who are the shareholders? And how do they benefit? These days most corporations are owned almost entirely by (1) a few extremely rich people, and (2) mutual funds, retirement funds, etc. Ownership by mutal funds and retirement accounts seems sort of democratic because it means that the corporation is owned by "the people," but it's not really, since those people generally have no say in the running of the companies they collectively own. Why? Because the accounts are managed by banks who are given given the mission of increasing 'shareholder value'. If more corporations were owned directly by individual persons who actually took the time to vote in quarterly corporate elections, it's possible the course of a corporation could be influenced in a more 'democratic' way.
You see, when you own stock in a company, you own a part of that company. Periodically throughout the year, they send you reports on what the corporation is doing. Then you have an opportunity to vote on a small number of corporate issues, and also choose the corporate leaders. There's also a box that says "let the board of directors vote for me." Because most stock is held indirectly (via mutual funds, pension funds, etc), it's almost always this option that is exercised.
- so we see that the point of a corporation is to maximize "shareholder value". big problems come in because a corporation affects lots of people other than its shareholders. It affects its workers (through working conditions, compensation, and job security) and it affects the areas in which the corporation operates (Phil Knight, who runs Nike, never visited the Indonesian sweatshops in which their products were assembled; shareholders don't usually live in the areas that their corporation is deforesting, strip mining, etc). There is a very neat solution to this: have the employees and affected community members be the shareholders. We call this a "co-op".
whitewhale, up in Kensington on Adams Avenue just East of Normal Heights. I first encountered this film at the San Francisco International Film Festival, but it was sold out there (instead I watched about two thirds of Route 181, a road trip along the UN partition of Israel/Palestine), and then it's taken its merry time to come down to San Diego for a one-week run.It's a good film because it presents quite a lot of issues, but I don't think they're all uniquely tied to "corporations." The notion of 'Corporate Personhood' is attacked on the basis that a corporation can at best be a person without a conscience, motivated only by shareholder value, i.e. "greed". Many corporate abuses are chronicled, but few alternatives are given. Nonetheless, I agree with most of the criticisms, most along the lines of "a corporation will do anything to make a buck."
- we were handed a pamphlet crying for an end to "corporate personhood," complaining that, since corporate personhood came about as a result of a supreme court action and not an act of the legislature, corporate personhood is illegitimate because "judges can't make laws; only the legislature can make laws." It really annoys me when I hear things like this. You can't be a champion of judicial review when the courts interpret the law to require, for instance, same-sex marriage, but then cry "judicial activism" when they create corporate personhood. This is particularly hilarious, because "judicial activisim" is traditionally a Republican complaint. Personally, I think the judicial branch is the one branch of government that seems to carry out its duty in a well-informed, rational way.
I'm not against 'corporate personhood'. Transnational corporations, on the other hand, are scary.
- corporations commit a wide array of atrocities on the way to producing a product that people will buy for as little cost as possible. This film puts the blame entirely on corporations. But the fact of the matter is that they are driven entirely by consumer demand. Nobody will actually say that they want to club a baby seal in order to wear a designer t-shirt, but when they vote with their money, that's exactly the decision that they've made. The fact that people still drive their SUV to Wal-Mart to buy Nikes is evidence that consumers Don't Really Care. Style and price seem to be the only determining factors in what people buy. (I put 'style' before 'price' due to amazement at the markup on 'designer' wares.) People vote one way in the democratic process (most people express concern about the environment, their community, etc), but contradict themselves in the marketplace.
One way is to change the rules. If all corporations are held to strict environmental, labor, and other standards, then you can safely choose the most stylish / cheapest product and know that all products available to you were created under similarly environmentally-conscious means.
- This illustrates a big problem with democracy. A direct democracy will give the majority of the people exactly what the want, even if it is the enslavement of 49% of the population. Capitalism is, without a doubt, the most efficient and most productive system for giving people what they want. Of course, it's also a system that makes them want a lot of these things in the first place. Like enslaving 49% of the population so that 51% of the population can live in permanent retirement, it's not a good idea to give people exactly what they want. That's why our government has regulations that restrict the scope of laws and the extent of freedom. That's why we have labor and environmental regulations. That's why we have a representative democracy. And so on.
- Another criticism of corporations that is given is that they have a tendency to fire people, to lay off workers. It's inappropriate to complain about layoffs without also mentioning that corporatiosn also hire people in the first place. I'm all for job security, but requiring that corporations never lay off workers is ridiculous.
- Much is made of the fact that a corporation is responsible only to its shareholders, but not to the community, its employees, or anyone else. So, the question is, who are the shareholders? And how do they benefit? These days most corporations are owned almost entirely by (1) a few extremely rich people, and (2) mutual funds, retirement funds, etc. Ownership by mutal funds and retirement accounts seems sort of democratic because it means that the corporation is owned by "the people," but it's not really, since those people generally have no say in the running of the companies they collectively own. Why? Because the accounts are managed by banks who are given given the mission of increasing 'shareholder value'. If more corporations were owned directly by individual persons who actually took the time to vote in quarterly corporate elections, it's possible the course of a corporation could be influenced in a more 'democratic' way.
You see, when you own stock in a company, you own a part of that company. Periodically throughout the year, they send you reports on what the corporation is doing. Then you have an opportunity to vote on a small number of corporate issues, and also choose the corporate leaders. There's also a box that says "let the board of directors vote for me." Because most stock is held indirectly (via mutual funds, pension funds, etc), it's almost always this option that is exercised.
- so we see that the point of a corporation is to maximize "shareholder value". big problems come in because a corporation affects lots of people other than its shareholders. It affects its workers (through working conditions, compensation, and job security) and it affects the areas in which the corporation operates (Phil Knight, who runs Nike, never visited the Indonesian sweatshops in which their products were assembled; shareholders don't usually live in the areas that their corporation is deforesting, strip mining, etc). There is a very neat solution to this: have the employees and affected community members be the shareholders. We call this a "co-op".
Three economics challenges
(1) Popular wisdom has it that corporations are quite concerned about their stock price, that when the company is doing well, the stock price goes "up", and when the company is doing poorly, the stock price goes "down". In other words, changes in stock price are directly tied to the performance of a company. (One share in a corporation means that you own 1/N of that company, where N is the total number of shares. Dividends are periodic cash payouts to shareholders, maybe $0.50 per share per quarter.)
My question is how? Tell me one way in which the performance of a company is actually tied to the price of its stock.
The price of a share in company FOO should be exactly the expectation value of all future dividends paid by that company, and at one time this was true. At one time, people invested in corporations in order to provide the capital to perform some undertaking (say, "Buy ships and hire a crew to sail to the New World and dig up riches!") with the expectation of future rewards ("Profit from riches dug up in the new world."). But these days this is no longer true. Companies rarely issue substantial dividends any more. Microsoft recently did, but that was sufficiently suprising to be sort of the "exception that proved the rule."
Shares in a company (stock) are bought and sold willy-nilly. After the initial sale of shares to investors (for publicly traded corporations, this is the venerated IPO, or "Initial Public Offering"), the price of stock is utterly irrelevent to the company itself, since the only time the company gains capital is when the company sells shares to an initial investor. An investor selling his share to another investor does nothing for the company.
People buy stock (shares) not because they expect future dividends, but because they expect the price of the stock to go up. But I see no actual mechanism to tie the performance of a company to its stock price. In this case, "investing" in the stock market is no more than speculation, and the whole system is nothing more than a pyramid scheme. Indeed, the only reason that investing in the stock market usually pays off is because the amount invested is growing. Every year more people invest in the stock market, fuelling the pyramid scheme.
Prove me wrong.
(2) I hate chains. I mean stores like McDonalds or Blockbuster or Walmart or Borders Books And Music or Best Buy. I detest them, but I can't put my finger on exactly what about them I find so reprehensible. I dislike the homogeneity, the impersonalness, the fact that the employees are robots. Somehow Independent Businesses just seem "better". Their products are more interesting and you can see that their revenue is reinvested directly in the local community, instead of being siphoned off to an absentee owner. I want to figure out whether this is a reasonable position. Should I just embrace "chain stores"?
One of my big suspicions is that we need chain stores, because the base of potential business owners simply lacks the creativity and manpower to produce a zillion independent businesses, whereas it's relatively easy to clone an already-successful business to operate in a zillion locations. Also, I understand the economy of scale. It's certainly vastly more efficient to have the supply chain available to supply your chain business with what it needs. It also mitigates risk. When there are a zillion copies of a business, the other copies can keep a less successful copy afloat until it takes root.
Then there is another distinction (assquibb points out). Franchises, like, say, Subway, are independent business. The franchisee buys a "kit" from the motherbusiness (Subway, Inc) and starts a business using their paraphernalia. It's a recognizable copy of another business with a recognizable brand, but it's locally owned. Then there are centrally-owned businesses, like our old friend Starbucks, where every single store is owned and operated from central headquarters. Franchises seem a lot less evil than these centrally-owned businesses, but I really don't like either.
Are chains really bad? Am I irrational for hating them? I have never, and, as far as I'm concerned, I will never, patronize Starbucks. So far I'm Wal-Mart free as well. Is this reasonable?
(3) Define "wealth". How is it created? What is "inflation"?
--
By the way, a good site for background info is invest-faq.com. I think the only two books I've read in this milieu are A Random Walk Down Wall Street and Steven Landsburg's The Armchair Economist. Other references appreciated.
My question is how? Tell me one way in which the performance of a company is actually tied to the price of its stock.
The price of a share in company FOO should be exactly the expectation value of all future dividends paid by that company, and at one time this was true. At one time, people invested in corporations in order to provide the capital to perform some undertaking (say, "Buy ships and hire a crew to sail to the New World and dig up riches!") with the expectation of future rewards ("Profit from riches dug up in the new world."). But these days this is no longer true. Companies rarely issue substantial dividends any more. Microsoft recently did, but that was sufficiently suprising to be sort of the "exception that proved the rule."
Shares in a company (stock) are bought and sold willy-nilly. After the initial sale of shares to investors (for publicly traded corporations, this is the venerated IPO, or "Initial Public Offering"), the price of stock is utterly irrelevent to the company itself, since the only time the company gains capital is when the company sells shares to an initial investor. An investor selling his share to another investor does nothing for the company.
People buy stock (shares) not because they expect future dividends, but because they expect the price of the stock to go up. But I see no actual mechanism to tie the performance of a company to its stock price. In this case, "investing" in the stock market is no more than speculation, and the whole system is nothing more than a pyramid scheme. Indeed, the only reason that investing in the stock market usually pays off is because the amount invested is growing. Every year more people invest in the stock market, fuelling the pyramid scheme.
Prove me wrong.
(2) I hate chains. I mean stores like McDonalds or Blockbuster or Walmart or Borders Books And Music or Best Buy. I detest them, but I can't put my finger on exactly what about them I find so reprehensible. I dislike the homogeneity, the impersonalness, the fact that the employees are robots. Somehow Independent Businesses just seem "better". Their products are more interesting and you can see that their revenue is reinvested directly in the local community, instead of being siphoned off to an absentee owner. I want to figure out whether this is a reasonable position. Should I just embrace "chain stores"?
One of my big suspicions is that we need chain stores, because the base of potential business owners simply lacks the creativity and manpower to produce a zillion independent businesses, whereas it's relatively easy to clone an already-successful business to operate in a zillion locations. Also, I understand the economy of scale. It's certainly vastly more efficient to have the supply chain available to supply your chain business with what it needs. It also mitigates risk. When there are a zillion copies of a business, the other copies can keep a less successful copy afloat until it takes root.
Then there is another distinction (as
squibb points out). Franchises, like, say, Subway, are independent business. The franchisee buys a "kit" from the motherbusiness (Subway, Inc) and starts a business using their paraphernalia. It's a recognizable copy of another business with a recognizable brand, but it's locally owned. Then there are centrally-owned businesses, like our old friend Starbucks, where every single store is owned and operated from central headquarters. Franchises seem a lot less evil than these centrally-owned businesses, but I really don't like either.Are chains really bad? Am I irrational for hating them? I have never, and, as far as I'm concerned, I will never, patronize Starbucks. So far I'm Wal-Mart free as well. Is this reasonable?
(3) Define "wealth". How is it created? What is "inflation"?
--
By the way, a good site for background info is invest-faq.com. I think the only two books I've read in this milieu are A Random Walk Down Wall Street and Steven Landsburg's The Armchair Economist. Other references appreciated.
neon lab II
In the first lab (last week), I learned how to make splices. This week Dennis taught me how to make 90 degree and 180 degree bends in the glass. Compared to making splices, making bends is quite simple. Splices are quite difficult to get right, but the bends are pretty easy to get. It just takes a little practice to make them nicely. (They do splices first intentionally so that everything else will seem easy.) I made something like a dozen 90 degree bends and three 180 degree bends. The 180 degree bends didn't come out well, so I still have to work on that.
To make a 90 degree bend, you measure out one tube's width in either direction of the center of the bend. Mark these on the glass on what will be the "inside" of the bend in pencil. Heat this whole region uniformly until it's glowing a nice red (the graphite in particular glows red). Then you pull the glass up out of the fire, and, moving both hands, bend the glass into position, with the bend pointed straight down (so that it doesn't sag off-axis due to gravity). While bending, blow into the hose to inflate the "kink". Then place the bent glass on the table (on top of a metal screen on top of your pattern) and adjust it to be perfect, and let it cool.
![[sample 90 degree bends of varying degrees of wellformedness.]](https://p.dreamwidth.org/480ac4bb9103/172642-201151/splorg.org:8080/people/tobin/pictures/ucsd/neon_w.jpg)
my problem with the emdash
I think the mdash — which I am ilustrating right here — should be offset with spaces.
Convention is that the emdash—which is just a hyphenated parenthetical interjection—is not.
life in san diego II: el portal
Just around the corner from here is a fast food Mexican restaurant called El Portal. It is divine. I rarely stray from Combo #3, "Two carne asada tacos, beans, rice, and a side of corn cake":
![[Combo #3 from El Portal]](https://p.dreamwidth.org/38faf976e92c/172642-201495/splorg.org:8080/people/tobin/pictures/ucsd/elportal_plate.jpg)
The beverage on the left (sort of invisible) is horchata. yum! The paper bag in the upper left is corn chips.
That doesn't quite do it justice. Let's zoom in a bit.
![[Combo #3 from El Portal - detail]](https://p.dreamwidth.org/2c39e007984b/172642-201495/splorg.org:8080/people/tobin/pictures/ucsd/elportal_plate2.jpg)
mmmm.. good.
Just for kicks, let's compare this to the CERN Standard Breakfast from last summer:
And sometimes we splurged:
I wish I had a picture of the Dinner of Champions. Right now you can only read about it in the Camp CERN Manifesto.