Confusion by Corporation

Corporation n.

1. A body that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members.

2. Such a body created for purposes of government. Also called body corporate.

3. A group of people combined into or acting as one body.

Chief Justice Marshall of the Supreme Court of the United States of America, in the course of a formal judicial utterance, thus defined the term corporation: "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression may be allowed, individuality; properties by which a perpetual succession of many persons are considered as the same, and may act as a single individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with qualities and capacities, that corporations were invented, and are in use. By these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like one immortal being."

The other day I was reading Stephen Roach's economic analysis and I came across a conceptualization I have often used myself, the shorthand notation of conflating a country's policy makers with the country itself; China understands that a 2% currency adjustment is only a down-payment on a much larger revaluation. In modern times the habit seems to be that one thinks of a corporation within the confines of finance but countries and even the institutions of religion are corporations, like the Vatican. In each case, if you think about it for a second, after reading the above definitions, you might come to the conclusion that these things really don't exist. There is no such thing as China, although there is a civilization of people living in the country so named. Perhaps John Lennon captured the notion best when he sang, I don't believe in the Beatles, I just believe in me.


I sometimes think of corporations as if they were magical objects in Greek Myths, e.g. the "cap of darkness" and "magic wallet" in the Perseus tale, or perhaps a bit more fitting, the One Ring of Tolkein, which convey special powers to those who "posses" them. As a child I sometimes dreamed of finding such objects myself, but with the benefit of a few decades hindsight it is probably a good thing that a child never have such power. Stripped of their office, George Bush and Tony Blair, to pick two corporate heads at random, are just men. However, by virtue of people's belief in the corporation, in these cases, the US and UK governments, they assume great power-power that can and is being used. To better illustrate, consider that 2000 years ago, Rome held a similar place in the minds of men, but now is just a city. In a sense, a good portion of the history of man lies in the quest to create, destroy and possess the corporations of the day.

I noted that I too had often used similar terminology in speaking or writing of nations or companies. It's a linguistic form with which people are familiar. When Roach writes the China understands, readers don't wonder what he means, but I think they should. China doesn't understand anything, although its leaders, I imagine, have fairly detailed world views, they understand many things. I would also imagine that there are differences of opinion among the leaders, just as there are differences of opinion among policy makers here in the US. Usually those differing views are submerged behind the facade of a single body speaking with one voice, particularly when economic times are good. It is when times turn from good to less so that the strains in maintaining the corporation come to the fore, like a Rain God who isn't bringing rain. Under those conditions the people behind the scenes become more obvious, as I imagine will be happening more and more over the next few years.

The thing to which I wish to draw your attention is this, if you wish to avoid confusion, always remember that corporate decision are at best simply human decisions, and in my view, given the dynamics of collective decision making and urge among corporate insiders to maintain and expand corporate power, sometimes less than human.