Tag Archives: Bloomingdales

Corporations Are People Too, Right? Part 1

4 Dec

A Short Lesson in Economics

I have this suspicion that there are a lot of good people out there who believe that corporations are people too. I can’t begin to tell you how wrong that statement is. But I’ll try.

Yes, corporations in good standing do have the same legal rights that individuals do. They are a legal entity and can enter into contracts, pay taxes, sue and be sued and must obey all laws, local, state and federal.

The one major difference between a human being and a corporation is this: a human being has a conscience and a corporation does not. Before you start asking what’s a conscience got to do with all this. Let me explain.

Years ago, when a company placed a sign on their building it was often composed of the owner’s last name: Hewlett-Packard, Macy’s, Bloomingdales, Culligan, Dayton’s, Abbott Laboratories, Nordstrom’s, Dell and thousands of others. There was a certain pride these owners felt, and a certain obligation they felt towards their employees, customers and the communities where they were located. They often donated large sums of money for the betterment of those communities and its citizens. And when it came to paying their taxes they did it proudly, happy to repay this nation for giving them so many opportunities.

That was then. And, this is now. In most of those companies I mentioned above you can search high and low for an individual with the same last name as the sign out front, but most likely you’ll never find one. Often they’re owned by an even larger corporation not even located in the same state. Maybe, not even in this country.

Corporations are run by paid managers whose sworn allegiance is to the board of directors and to the corporation’s real owners, their shareholders. And often these shareholders are large Wall Street hedge funds, mutual funds and huge pension funds like Calpers (California public employees). These managers are responsible for profits, and they are graded every 90 days on their performance. If they fail to meet their numbers they’re usually shown the door (often with a severance package that you and I could live on for the rest of our lives).

In my next blog we’ll continue this conversation: Corporations Are People Too, Right? Part 2