Nicholas Murray Butler, past president of Columbia University, said, “The limited liability corporation is the greatest single invention of modern times.” I’ve finally decided he’s right, and leapt headlong into modernity. After years of fighting corporate depredation, from Weyerhaeuser’s deforestation to Dow’s poisoning to the murder and mayhem that follows Freeport McMoRan (and Shell, and Cargill, and so many others) across the globe, I’ve decided if I can’t beat them I should join them and at least gain for myself the advantages of this greatest of all modern inventions. At long last I’ve decided to put together my very own limited liability corporation.
You see, I’m really sick of being held personally responsible for every little thing I do wrong. But that will all change when I have this legal barrier between my actions and their consequences. I can’t wait to see how this will play out. First, I’m going to have the government give me some land. They do this all the time for other limited liability corporations—in fact the direct grant of resources is a primary way (if not the primary way) wealth is transferred from citizens to corporations—so I don’t see why I shouldn’t get a piece of this pie. Next, I’ll threaten to cut all the trees on my land. If anyone tries to stop me, I’ll scream, “Takings,” and try to get the feds or someone else to give me lots of money in order to not carry out my threat (the technical term for this transaction—and I include this definition in case you’re not well versed in the language of high finance—is extortion). If they do, I’ll put the money into my personal bank account (the technical term for this transfer is money laundering, better known in disreputable circles as stock trading), and start the process anew somewhere else. If nobody coughs up enough money to convince me to change my mind, I’ll send in my associates to carry out the threat. I’ll sell the bodies of the trees, and, once again, transfer the money to my personal account. If deforesting the land destroys that community’s water supply—and note the use of the word that: I’m not going to deforest my own home: what do you think I am, crazy?—I’ll flash them my notice that I’m a limited liability corporation and they won’t be able to touch me or my personal bank account.
Next I’ll put in a factory that refines poisons—I’m thinking the sort of poisons other limited liability corporations put on people’s food—and if some of this poison happens to escape (say in a big cloud) onto my neighbor’s property, I’ll go through the same sequence of tactics: extortion, money laundering, flash my limited liability status.
The possibilities are endless. By separating action from consequence I’m now free to act out my most insane, antisocial, destructive fantasies with no fear of repercussion. I can deforest the planet, dewater rivers, vacuum oceans. I can give cancer to people I don’t even know. I can control governments (which is a silly thought, really, since the primary purpose of governments is already to protect me and my limited liability brethren: why do you think they came up with the notion of limiting liability in the first place?). I can destroy grassroots movements for peace, justice, sustainability, democracy. I can destroy life on the planet! I am invincible! What a great invention!
There is, however, one flaw in the design. I see no reason to limit my liability on only my public actions. I want to limit my liability for personal actions as well. If I track mud across my mom’s floor and she dares to ask me to clean up my mess—her mess, really, since it’s on her floor—I’ll just say, “I’m a limited liability corporation. You can’t hold me responsible for my actions.” (Note to myself: maybe I can get my mom to pay me, too, to not dirty her floor—I’ll claim takings if she asks me to wipe my shoes—and then I’ll start going door to door with this latest plan). If someone cuts me off on the highway, I’ll just ram the offending car. If a cop pulls me over, I’ll say, “I’m a limited liability corporation: you can’t hold me personally responsible for my actions.” He’ll probably say, “I’m sorry, sir. Have a nice day.” But if he doesn’t fully understand economics, and tells me not to do this again, I’ll scream takings, get some money from the government, and start the process all over. And so far as intimate relationships go, the imagination reels.
I’ve decided also that I’m going to join with politicians and corporate journalists and begin preaching the gospel of limited liability corporations everywhere I can. I even know where I’m going to begin my missionary work. I teach creative writing at a supermaximum security prison here in northern California. The men I teach are called by the corporate press “the worst of the worst”: robbers, thieves, murderers. But I now understand that these men are amateurs. If they really want to succeed at their chosen professions, they need to get themselves special “limited liability get out of jail free” cards. Because the truth is that all of the men in this prison have killed far fewer people, destroyed far fewer lives, stolen far less money, than the average CEO of the average limited liability corporation. Here are two riddles about this, neither of which are very funny. Question: What do you get when you cross a long drug habit, a quick temper, and a gun? Answer: Two life terms for murder, earliest release date 2026. Question: What do you get when you cross two nation states, a large limited liability corporation, forty tons of poison, and at least 8000 dead human beings? Answer: Retirement with full pay and benefits. If my students had robbed or killed people in the service of economic production, behind the legal fiction of a limited liability corporation, they could now be joining Warren Anderson, ex-CEO of Union Carbide, on the back nine, instead of spending the rest of their lives in tiny cells.
But maybe I’ve been too precipitous in my decision to make my own limited liability corporation. Despite their obvious advantages to those who wish to act without fear of repurcussion (or perhaps because of those advantages) I think Nicholas Murray Butler may be wrong. Limited liability corporations are not the greatest single invention of modern times. In many ways they’re not even anything new, but rather new language wrapped around a concept old as civilization, that of enriching rulers at the expense of the majority of humans and their human and nonhuman communities.
The anthropologist Stanley Diamond noted, “Civilization originates in conquest abroad and repression at home.” He’s is not the only one to remark that the central goal and function of government has been from the beginning that of robbing from the poor and giving to the rich. James Madison said as much when he insisted during the US constitutional convention that the main goal of the political system much be “to protect the minority of the opulent against the majority.” Adam Smith, godfather of modern economics, would have agreed, for he wrote, “Civil government . . . is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.” But I’d say both of these people, as well as John Locke, who stated, “Government has no other end but the preservation of property,” were being modest. The real function of government goes beyond all of these, not just to the protection but most especially to the acquisition of property—and ever more property—by the opulent. From the beginning the goal has been, to use some two-dollar words, the privatization of profits and the externalization of costs.And from the beginning the question has been: how to best do this?
Force is certainly one way. If you don’t believe me, ask the Africans, perhaps one hundred million of whom died in the slave trade. Or the American Indians, decimated probably nine times over in the conquest of their continents. Or the indigenous the world over, who continue to be dispossessed and exterminated as rapidly—or moreso—than those who came before them. Or ask a modern slave: it shouldn’t be hard to find one, because there are more slaves (using a rigorous definition of slavery) in the world today than came across on the Middle Passage.
But force is expensive, and an incredibly inefficient way to steal. It’s much better if you can convince victims to cooperate in their own victimization. Thus early on those in power articulated, for example, the divine right of kings, trying to convince not only themselves but those from whom they stole that their power originated not in force and social convention but instead came directly from God. If you opposed this power you faced not only execution but eternal damnation.
That may have worked well in a religious era, but in our secularized world it would sound pretty stupid for those in power to say that Warren Anderson should not be executed—or in any way punished—for killing thousands of Indians because Union Carbide exists through divine mandate, and that Weyerhaeuser can deforest the planet because God Says So.
So those in power had to come up with a different way to keep injured citizens from injuring them back. And somehow they’ve gotten us to buy into the extraordinarily odd notion that those in power can somehow limit their accountability for the damage they do by uttering the magic words limited liability corporation. What’s worse is that they’ve gotten us to buy into the notion that limited liability corporations are a good idea. And what’s even worse than that is they’ve gotten us to buy into the notion that limited liability corporations even exist. For not only are limited liability corporations not a good invention, they aren’t an invention at all, but rather a conjuration: a fiction, a legal fiction, that is, a fiction made law by, you guessed it, those in power.
Corporations are entities we pretend are real, that have been defined (and institutionally define themselves) to person status by claiming, in essence, to be living bodies (incorporate comes from the latin in, in, and corporare, to form into a body, from corpus, a body). Corporations are the “embodiment,” the reification, of a single idea—that of amassing wealth. To that end, according to my dusty old economics textbook, they have been “granted perpetual life and diversified ownership, each part of which has limited liability for the debts and other liabilities of the firm.” This limited liability means that each owner is not liable for the actions of the corporation. Investors can only lose the amount of money invested, and are not held in any way accountable if the company commits genocide, ecocide, murder, or any other crime.
Limited liability means more than profits, however, and it means more than poison clouds “in the colonies.” It is more than the mere institutionalization of irresponsibility. It is an explicit acknowledgement that it’s impossible to amass great wealth without externalizing costs. If costs were not being externalized there would be no need to limit liability.
Limited liability corporations are a legal device that came into use during the eighteenth and nineteenth centuries to deal with the myriad of limits exceeded by our culture’s social and economic system: the railroads and other early corporations were too big and too technological to be built or insured by the incorporators’ investments alone; when corporations failed or caused gross public damage, as they often did, the incorporators did not have the wealth to cover the damage. No one did. Thus, a limit was placed on the investors’ liability, on the amount of damage for which they could be held liable. Because of limited liability, corporations have allowed several generations of owners to economically, psychologically, and legally ignore the limits of toxics, fisheries depletion, debt, and so on that have been transgressed by the workings of our economic system.
By now we should have learned. To expect corporations to function differently than they do is to engage in magical thinking. We may as well expect a clock to cook, a car to give birth, or a gun to plant flowers. The specific and explicit function of for-profit corporations is to amass wealth. The function is not to guarantee that children are raised in environments free of toxic chemicals, nor to respect the autonomy or existence of indigenous peoples, nor to protect the vocational or personal integrity of workers, nor to design safe modes of transportation, nor to support life on this planet. Nor is the function to serve communities. It never has been and never will be. To expect corporations to do anything other than amass wealth is to ignore our culture’s entire history, current actions, current power structure, and its system of rewards. It is to ignore everything we know about behavior modification: we reward those investing in or running corporations for what they do, and so we can expect them to do it again.To expect those who hide behind corporate shields to do otherwise is delusional.
Limited liability corporations are institutions created explicitly to separate humans from the effects of their actions, making them by definition inhuman and inhumane. To the degree we desire to live in a human and humane world—and really, to the degree we wish to survive—limited liability corporations need to be eliminated.
It would be easy to blame corporations for most of the world’s ills. This, however, would not be helpful, because, as I mentioned earlier, corporations are mere tools for governance and for the transfer of wealth from communities to the governors, the latest in a series of tools running back six thousand years to when civilization originated “in conquest abroad and repression at home.”
To provide a clarifying example, although the world’s forests might receive a brief reprieve were Weyerhaeuser’s corporate charter revoked, we must remember that our culture was deforesting the world long before Weyerhaeuser—either the corporation or its founder Frederick—was conceived.
Corporations don’t cause destruction; they are tools to facilitate it, legalize it, rationalize it, make it respectable. Another word for “the externalization of costs,” for “limited liability,” is theft. But this is a special breed of theft, where even the victim is left feeling a legitimate and just transaction has taken place; the victim may be frustrated, but is more likely to be jealous than outraged. As we have seen repeatedly in this country’s elections, the victim will defend the thief’s property rights, and will also spend the rest of his or her life trying to earn back the stolen goods. Political rhetorician Edmund Burke laid out, presumably with a straight face, the responsibilities of the properly enculturated, the mental and emotional states in which the poor must be maintained if they are to keep themselves at labor and not rebel against the rich: “They must respect that property of which they cannot partake. They must labor to obtain what by labor can be obtained; and when they find, as they commonly do, the success disproportioned to the endeavor, they must be taught their consolation in the final proportions of eternal justice.”
But perhaps this is going too far. Perhaps by changing the language, by moving away from the academic—“the privatization of profits and the externalization of costs”—to the vulgar—“theft”—I run the risk of offending. I imperil my credibility.
That is precisely the point, and precisely the strength of the corporation as a tool for privatizing profits and externalizing costs, for theft, for murder. The transaction is legitimate. The crime complete. It is acceptable. It is legal. And of course it is still theft. And it is still murder.
But labels aren’t so important; no matter what we call it, poison is still poison, death is still death, and industrial civilization is still causing the greatest mass extinction in the history of the planet.
No matter how scary and stupid it may be to limit liability, the truth is that our situation is even more scary and stupid than this would imply. A corporation is a “creature of the law,” as US Supreme Court Chief Justice Marshall observed in 1819, a creation of the state. When a government charters a corporation, it is setting in motion, according to Marshall, “a perpetual succession of individuals [who] are capable of acting for the promotion of the particular object, like one immortal being. . . .”< Since corporations are “immortal,” and since they are created solely to amass wealth, they become the institutionalization of dissatisfaction, the economic manifestation of the Buddhist notion of “hungry ghosts,” spirits who roam the earth, always eating, never sated. The forest activist Jim Britell commented on this, and his statement applies not only to the timber industry executives he describes but to the culture as a whole: “In the writings and speeches of clearcutters and deforesters, you can see and hear an intense hunger to find forests to cut. At the same time, the last few years have broken all records in the amount of forests cut down. What we are seeing is a simultaneity of poverty and richness, a special kind of insatiable hunger where the more you possess the more deprived you feel. This is the emotion that dominates and pervades the realm of the hungry ghosts. The physical representation of this state is the image of a being with a gigantic belly, a very thin neck and a tiny mouth. No matter how much the hungry ghost eats, its stomach can never be filled.” What this means is that corporations and those who run them cannot stop exploiting resources and amassing wealth until they have . . . .I cannot finish this sentence, because the truth is that they can never stop; like cancer they can only continue to expand until they kill their host. Come to think of it, I’ve decided not to form my own limited liability corporation. As tempting as it may be to step away from all human responsibility for my actions, I’m more interested in being as beautiful as human beings are capable of being, and in assisting in the survival of my nonhuman neighbors.
If we wish to survive, we must begin by dismantling corporations. We must do this first psychologically, by recognizing that corporations are tools for the transfer of wealth from the public to the rich, tools that are as absurd and self-serving as was the divine right of kings. I of course mean self-serving only in its most superficial sense, because it is suicidal for rich as well as poor to destroy their landbase (even though the rich are more insulated from the effects of their destructive behaviors, which I guess is one of the main points of the whole system). And then we must dismantle corporations functionally and physically, by stopping corporate activities and taking apart the political, military, physical and infrastructural constructs that support them. This dismantling of corporations is and will continue to be extremely dangerous, bringing down upon those of us who participate in it the full power of the state, that is, the full power of the rich. Those who have not scrupled at killing to amass their wealth will not scruple at killing to maintain it, and to maintain the fiction that the wealth is legitimate. Or, as Lucy Parsons so famously put it (long after the state had killed her husband because he spoke and acted in favor of the poor), “Never be deceived that the rich will allow you to vote away their wealth.”
Dangerous as it is, I’m going to persevere. The only thing I can imagine more dangerous than dismantling limited liability corporations—and of course the structures that allow them to destroy with relative impunity—is allowing them to continue.
Originally published in the March 2003 issue of The EcologistFiled in Essays