The Corporation: A Psychopath

[_Kevin Graham]

If it were up to you, would you outlaw the ability of two or more people to join together to seek financial gain?

Of course not.

[_JohnStuartMill]

Kevin,

Do you think that the government can be trusted but corporations are untrustworthy?

There remains, however, an astonishingly gaping absence in Galbraith’s worldview. While he is perfectly able to see the defects of businessmen—their inclination to megalomania, greed, hypocrisy, and special pleading—he is quite unable to see the same traits in government bureaucrats. It is as if he has read, and taken to heart, the work of Sinclair Lewis, but never even skimmed the work of Kafka.

For example, the chapter entitled “The Bureaucratic Syndrome” in his book The Culture of Contentment refers only to bureaucracy in corporations (and in the one government department he despises, the military). Galbraith appears to believe in the absurd idea that bureaucrats administer tax revenues to produce socially desirable ends without friction, waste, or mistake. It is clearly beyond the range of his thought that government action can, even with the best intentions, produce harmful effects. For Galbraith, a dollar spent on, say, public education results in a dollar’s worth of educated person, virtually without deduction. Troubling evidence to the contrary—for example, the fact that Britain spends nearly $100,000 per child on public education, and yet a fifth of the population is unable to read with facility or do simple arithmetic—does not figure in his work; he always writes as if all would be well if only $200,000 were spent.

He should have known better. In his 1981 autobiography, A Life in Our Times, he recalls the way academics flocked to Washington at the beginning of the New Deal. “Word had . . . reached the university that a nearly unlimited number of jobs were open for economists at unbelievably high pay in the federal government,” he writes. “All the new agencies needed this talent. Students who had been resisting for years the completion of theses and the resulting unemployment now finished them up in weeks. Some did not even stop to do that. So a new gold rush began.” One might think that this would have opened his eyes to the vested interests of bureaucracy—to the possibility that large government programs might operate more for the interest of the apparatchiks than for that of the alleged beneficiaries. But it never did.

Nor did it change his ideas about the politics of taxation. Over and again in his work, Galbraith alludes with disdain to the resistance that the affluent mount to tax increases, insisting that they do so only out of self-interest and indifference to the fate of the poor. In The Good Society, for example, he writes that “the comfortably affluent resist public action for the poor because of the threat of increased taxes.” It is true, of course, that the well-to-do resist tax increases in large part because they do not want to give up what they have; practically no one likes to be deprived of what he has. But in light of the “gold rush” described above by Galbraith, is it not at least equally likely that those who propose tax increases do so in order to increase their own power and emoluments?

http://www.city-journal.org/2010/20_1_otbie-john-kenneth-galbraith.html

I'm no wild-eyed libertarian, but this is a very good point, and it saddens me that very few liberals take it seriously. Anyone looking for a lengthier exposition of this general idea can read Hayek's The Road to Serfdom or the Wikipedia article on Public Choice Theory.

[_Nimrod]

If it were up to you, would you outlaw the ability of two or more people to join together to seek financial gain?

Of course not.

I know of many corporations that are composed of no more than 2 individuals, counting shareholders and employees, and have financial gain as their motive.

So what subset of the concept of corporations is it that bothers you?

[_Kevin Graham]

Nimrod, let me first say that I believe there are many corporations who have done no evil. My beef is with the way the corporation is designed, as well as the rights they are granted. The fact that some corporations have done no wrong, in no way changes the fact that they are designed to do wrong with little liability to the owners. Your example of two people becoming incorporated. First question. Why do you think they decided to become a corporation as opposed to a non-incorporated small business?


The problem comes when the managment is divorced from ownership, which doesn't seem to be the case here since the only owners are the workers. But businesses usually decide to become "incorporated" for the main reason that it reduces their liability dramatically. If a citizen enters into a binding contract with a Mom-Pop shop and decides to break that contract, the business can call the cops and that person be put in jail. Likewise, if the Mom-Pop shop fails to provide the product/service that it promised, it can be held accountable. But with a corporation, if you pay good money for a service and they fail to provide, then that's just tough luck. If you try to call the cops on a corporation they'll laugh at you and might even throw you in jail for wasting their time.

From what I can tell, corporations that offer services tend to be less guilty than those who offer products, because much of the harm to stakeholders comes from the means of production, pollution, tyrannical working conditions for employees, etc.

Wal Mart is one of the most evil corporations the world has ever seen, in my personal opinion. It is America's largest employer. Apple is gradually becoming more and more notorious as well.

[_Black Moclips]

I guess if your argument is that you don't like the legal business structure "corporation" because it can lead to some immoral activity in places where governments do not adequately protect their citizenship, then that is a valid viewpoint. From the beginnings of the other thread, it sounded like (to me) that you were going down the road of anti-capitalism/anti-freemarket. Normally, for those who take that view, the answer is more government intervention and involvement in controlling the economy, many times outright socialism or communism. So my argument is/was that those types of government are just as if not more corrupt than free market corporations, as they control not just the economy, but just about everything else as well. Anyway, if I missed the point, I'm sorry I muddied the waters.

But I took my wife to see Avatar on Saturday. After watching the movie and thinking about how they portray the "evil" mining company, I honestly thought to myself "Yep, that's how Kevin G sees things." All that precious Unobtainium, worth killing thousands for. But that story reminded me more of the US Federal government and its expansion in to native american indian lands than any corporation. That's sort of ironic.

[_Black Moclips]

With respect to the example of the Cigna situation, while the situation is heart wrenching, I understand it. A company paying out for experimental surgeries for all who want them would quickly make the company collapse. But healthcare is just a different animal, because people have changed their thinking over time, and now view it as a right, rather than a commercial product. Car insurance, for all intents and purposes is the same type of product as health insurance, yet we treat it very differently and have differing expectations. How many would think its reasonable to take a crashed car into a car insurance broker and say "I want you to cover the wreck I had last week." Sounds ridiculous, but its exactly the same concept of pre-existing health conditions. We want a company to potentially pickup hundreds of thousands of dollars of costs because.....why? Because its our health and we deserve it. We want and expect the insurance company to pay for just about everything, when its always been a business of risk assessment and limitations. We know that before purchasing the product. I can see where some might call this "evil" but in reality, its a certain kind of product for certain situations.

You site one bad example, and I'm sure there are a lot more, but what about the thousands or millions of examples where patients lives were saved, the costs were covered, and everything worked out? I've had many examples of that in my life, we all do. So the examples such as you list, while unfortunate and sad, do not negate the fact that overwhelmingly, health insurance does what its designed to do. Personally, I would favor moving to some sort of system where the insured is paid directly for certain services and its their responsibility to shop around for the best price. Fact of the matter is, most of the time we don't care or question what the costs are as long as the insurance company pays for it. I think this happens because we let it and are not educated enough about our own health. Why does an aspirin cost $40 in a hospital but over the counter is $5? We don't demand the efficiency because we think the insurance company takes care of it. Lots of room for improvement there, and I've heard several doctors mention support of the same type thing.

And don't forget, while one of the underlying motivations was the almighty dollar, corporations have spent untold millions and billions on making the heathcare procedures that were once labeled "experimental" routine. The technological advances are innumerable that make our lives better.

I think that the corporation serves its purpose, and while its guided by fair and responsible legislation, its the most effective organization we have to get things done when it comes to providing services and products to the market.

[_richardMdBorn]

As far as Kelo, I'm not sure what the beef is here unless you want to criticize the fifth amendment. But the big winner in that case was corporations, again. Corporations essentially run our government.

I don't have a beef with the Fifth Amendment. I have a beef with the ridiculous interpretation of the takings clause.

If you think that corporations running our government is a bad thing, why do you support Obama (this is based on your comments on this MB but perhaps I'm misinterpreting your position). I heard the author of Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses on Extension 720 last week. You may want to read it.

[_Kevin Graham]

== With respect to the example of the Cigna situation, while the situation is heart wrenching, I understand it. A company paying out for experimental surgeries for all who want them would quickly make the company collapse.

You immediately assume they are justified in calling it "experimental" but if the corporation really thought it were on solid legal grounds, then it NEVER would have reversed its decision to cover the claim. The fact that it is heart wrenching should serve to prove the point that it doesn't matter how good or moral the people are who work for any given corporation, because the business decisions are always going to be driven by profit motive, not moral agendas.

== But healthcare is just a different animal, because people have changed their thinking over time, and now view it as a right, rather than a commercial product.

It is a right, or at least should be considered as such. To treat health care as a commodity is abhorrent. You know there used to be a time when fire depts were privatized. If a home didn't have an emblem out front representing a certain corporation, then fire depts from other corporations would drive right by if the house were burning to the ground. It quickly became unreasonable to expect this system to work, so teh government took over and now everyone gets equal treatment. Before asking why you shoudl pay to have someone else's health care paid for, you might as well ask why childless families have to pay for your kid's public education? What's more important, our education or our health? You can have health without education but you can't have education without health. We should be able to provide universal coverage of all Americans. We're the only first world country that doesn't, and our health care system is among the worst in the world. Of course much of this has to do with bad government and their complicity.

== Car insurance, for all intents and purposes is the same type of product as health insurance, yet we treat it very differently and have differing expectations. How many would think its reasonable to take a crashed car into a car insurance broker and say "I want you to cover the wreck I had last week." Sounds ridiculous, but its exactly the same concept of pre-existing health conditions.

The analogy is ridiculous because all of us are damaged cars. We will all get sick out of no fault of our own and we have no choice but to own our bodies, whereas nobody is forcing you to own a car. All of us have frail bodies that have had some kind of medical treatment before obtaining health insurance. Insurance corporations ignore all moral questions by trying to minimize payments as much as possible, and they do not care how many people die in the process. This is an established fact.

== We want a company to potentially pickup hundreds of thousands of dollars of costs because.....why? Because its our health and we deserve it. We want and expect the insurance company to pay for just about everything, when its always been a business of risk assessment and limitations. We know that before purchasing the product. I can see where some might call this "evil" but in reality, its a certain kind of product for certain situations.

The analogy is flawed. Car insurance is not expected to pay for the "health" of a car. It doesn't pay for oil changes and other maintenance procedures. A human body is not a car and requires constant protection from social and biological forces that threaten our health. One slight "ding" on your body in the form of a mismanaged infection and you could die. By contrast, you can beat the hell out of a clunker and it can still go a few hundred thousand miles if the engine is maintained.

== You site one bad example, and I'm sure there are a lot more, but what about the thousands or millions of examples where patients lives were saved, the costs were covered, and everything worked out?

What about them? I guarantee you that when an insurance company does cover health care costs, it does so only because it found no other way around it. Its investigators could find no loophole to justify denying coverage.

== I've had many examples of that in my life, we all do.

Actually, I haven't. On my mission a surgeon tried to install a pace maker in me. I tried to get a second opinion and he insisted I go see one of his cohorts, but I decided to go elsewhere (after fighting with the MP about it) and the other doctor told me that only an idiot would think I needed a pacemaker at age 20. The guy was a friend to some people who worked at the Mission Office, and he started phoning my family members (after acquiring their numbers from the office) in Florida and Georgia, asking for credit card numbers because the Church insurance said my heart murmur was a preexisting condition. He was telling them I would probably die without the procedure. There was nothing wrong with my heart.

A few years later I was in college, and one class was particularly cold because I sat right underneath the air conditioning vent. So I sat through the two hour class with my legs crossed, trying to keep warm. Doing that many hours per week caused my right patela to pinch a nerve behind my left knee, and I gradually started to lose feeling in my lower leg. I knew this was the reason because my lef was asleep after every class. It got to the point where I couldn't even raise my foot using my ankle muscles and I dragged it as I walked. So I knew the problem was a pinched nerve and I explained the situation to a nurse who worked for a family doctor in Orlando. She tried to scare the hell out of me by telling me that it could possibly be the first stages of MS, and that the tests to determine this were very expensive, not entiurely covered by my insurance, and that I would need to come up with at least $1500 for the first payment. I told her I was certain it was a pinched nerve, but she looked at me as if to ask "And where did you go to Medical school?" I later called my friend (who baptized me) who was finishing medical school at the time, and he told me the nurse was out of her gourd. I never went back, and the feeling to my lower leg gradually came back after a few days of massages. So yeah, I think I have some sense of why health care in America is so friggin expensive.

But even after my strange experiences I never really thought much about health care in America or criticized the system as a whole. I never really cared much about going to the doctor for anything. If I broke my finger I'd go buy a splint at the drug store and tuff it out. I've been lucky in that I am pretty healthy and always have been. The only time I really needed to use my insurance when I worked for Pepsi was when I kept getting strep throat several times throughout a three year period. I always had to go to the doctor just so he could look at my throat for five seconds and confirm I had strep, and then write out a prescription for antibiotics and then charge my insurance company something around $100 for the ten minutes he "worked." I would then take my slip to the pharmacy where they'd charge me something like $5 for 30 pills of amoxicillan after the insurance covered the first $65. One interesting thing I noticed here in Brazil is that you can buy these drugs without a prescription and at pennies on the dollar. The same 30 pills of antibiotics are R$12 which is about $5 American, without insurance paying the other $65. I always load up on these pills before flying back to the States because most of the time anyone in my family gets sick, antibiotics are the cure.

== So the examples such as you list, while unfortunate and sad, do not negate the fact that overwhelmingly, health insurance does what its designed to do.

You're ignoring the fact that the corporations, as a matter of policy, deny coverage of 25-40% of their claims, simply to delay them in order to find more time to investigate a possible excuse to cancel the policy, or just to make more money on interest. How is that doing what they are supposed to do? Are they supposed to “F” us over? How would you like it if you crashed your car and then your insurance company said, "Well, we appreciate the fact that you've been paying your insurance premiums of $272 faithfully every month for the past four years, but because we found out you that back in 1987 when you had your first car, you failed to change your car's oil after 3,000 miles, so we're denying coverage of your claim... and we're canceling your policy to boot since the contract was made in bad faith. Oh, but we're keeping all the money you paid us over the years and giving you none of it. We know this also means you'll have this on your record so you'll never be able to find insurance again, but we appreciate your business while it lasted."

Seriously, if you want to make health insurance companies look like good institutions who care about people, then you've seriously given in to the dark side and are drunk on the koolade. The examples I list are not just flukes. They go to prove that these institutions are flawed because they have no moral compass, but rather only an interest in making money. This is why they infiltrate the system and you'll frequently find executives from insurance and drug companies on the board of directors at hospitals. They negotiate pricing and coverage behind the client's back. They also bribe our politicians so they can write legislation friendly to their corporate agendas.

== Personally, I would favor moving to some sort of system where the insured is paid directly for certain services and its their responsibility to shop around for the best price. Fact of the matter is, most of the time we don't care or question what the costs are as long as the insurance company pays for it.

I do. Health care costs in the USA is ridiculously high. We pay a higher percentage of our GDP towards health care than any nation in the world, and it is perfectly clear Americans are not any healthier because of it. The system is broken because drug companies and insurance companies control the system.

== I think this happens because we let it and are not educated enough about our own health.
Or about why we become unhealthy to begin with, and I would argue that corporations have some blame in that as well.

== And don't forget, while one of the underlying motivations was the almighty dollar, corporations have spent untold millions and billions on making the heathcare procedures that were once labeled "experimental" routine. The technological advances are innumerable that make our lives better.

It is true we have state of the art technology, but this effects something like 1% of the people who seek health care. The vast majority of Americans seeking health care do not need that Cadillac service

== I think that the corporation serves its purpose, and while its guided by fair and responsible legislation, its the most effective organization we have to get things done when it comes to providing services and products to the market.

It is also the most immoral one, which is why I call it evil.

[_Black Moclips]

You immediately assume they are justified in calling it "experimental" but if the corporation really thought it were on solid legal grounds, then it NEVER would have reversed its decision to cover the claim.

Hey, that was just the word the beginning of the blurb you linked used. But in any case, what you wrote is not true at all. They simply could not have wanted the bad press, which is certainly effective against corporations depending on the situation. Many times corporations settle when they could win, because it ultimately costs less.

It is a right, or at least should be considered as such. To treat health care as a commodity is abhorrent.

Well I don't agree. I don't think anyone should be forced to pay for anything for someone else's personal benefit. I think the forcible taking of ones property to give to someone else is just as immoral as anything you describe. This is one of the reasons why I have a big problem with our government in general and all of the social programs and entitlements it funds. Our system of government was never meant to be a welfare state system, but that is what it has become. Now that is not to say I don't think people should help one another. I just do not want the government controlling it or mandating it. My local food bank can turn a $1 dollar donation into $14 dollars worth of food. Its value and service multiplies when I donate. Yet if I give that $1 to the federal government, what do you think they can do with it? How much in service does it provide?

...and our health care system is among the worst in the world.

Now who is drinking the koolaid? But lets compare anecdotal evidence - my father in law needs a routine hernia surgery, and is on a 6 month waiting list in Canada. If he was here, it would be done in a week or less. We may have a problem with rising costs, but all countries do. I spent a week a England a few years ago, and was amazed that every night on the news, there was at least one story about how horrible the government health system was, the shortage on doctors, the overblown costs of the system, closing down of hospitals due to lack of funding, etc. I thought to myself, "This is what we want to emulate?" I know there are improvements we need to make to our system, but while not perfect, it is the best as far as quality of care, hands down.

The analogy is ridiculous because all of us are damaged cars. We will all get sick out of no fault of our own and we have no choice but to own our bodies, whereas nobody is forcing you to own a car. All of us have frail bodies that have had some kind of medical treatment before obtaining health insurance. Insurance corporations ignore all moral questions by trying to minimize payments as much as possible, and they do not care how many people die in the process. This is an established fact.

I think the analogy work just fine. Insurance is insurance. You are protecting against future risks that may or may not develop. They only added difference is that health insurance does cover some “maintenance”. But the contract certainly isn’t “We, the insurance company, offer to spend any cost whatsoever to keep you healthy and only charge you a fraction of the cost, ever.” I expect insurance carriers to scrutinize costs because fraud is rampant, and it costs everyone more when fraud and waste go unnoticed.

What about them? I guarantee you that when an insurance company does cover health care costs, it does so only because it found no other way around it. Its investigators could find no loophole to justify denying coverage.

LOL. I don’t get what you want. You want the insurance company to empathize with you before they pay? You want them to make their decision because it’s the right thing to do? It’s a business! It has agreed to reimburse you or pay the doctor if you meet criteria A, B and C. If you meet them, fine, no problem. Of course it needs to check if you’ve met the criteria. What’s the problem? It seems you are pissed if they don’t cover you, but then if they do cover you, you are pissed because it is for the wrong reason – they are just making a buck. That seems a little silly.

We’ve submitted hundreds of claims in the 15 years we’ve been married, 4 kids, several “procedures”, tons of office visits, several different hospitals, about 8 different insurance companies, and never once have had a claim denied. It is pretty automatic for the most part. You seem to think it really is like the movie INCREDIBLES, where the hero in the beginning is being forced by the mean old boss to deny the little old lady a valid claim (funny part if you haven’t seen
it).

It sounds like you want every company to be a non-profit charity, doing everything according to their stated moral code and because “it’s the right thing to do”. Charitable organizations and other non-profits certainly have their place in society, and I personally would like to see them increase. In the social problems they deal with, they can do just about everything better and more efficiently than governments. But since resources are scarce and much is scooped up by government, there isn’t more to give to such organizations. But even so, most non-profits can’t accomplish the things corporations can simply because they can’t raise the capital and offer the incentives. The profit motive is powerful and can be used for much good, but it does need to be bridled by good leadership and an appropriate business infrastructure.

Actually, I haven't.

Well maybe that is why we see things so differently then. Believe me, I have no “love” for insurance companies, but I see how they work and they provide a valid service. Some are better than others. I expect them to live up to and honor their contract, but I don’t expect them to feel anything about it. When they don’t, they get sued like everyone else.

You're ignoring the fact that the corporations, as a matter of policy, deny coverage of 25-40% of their claims, simply to delay them in order to find more time to investigate a possible excuse to cancel the policy, or just to make more money on interest. How is that doing what they are supposed to do? Are they supposed to f*** us over? How would you like it if you crashed your car and then your insurance company said, "Well, we appreciate the fact that you've been paying your insurance premiums of $272 faithfully every month for the past four years, but because we found out you that back in 1987 when you had your first car, you failed to change your car's oil after 3,000 miles, so we're denying coverage of your claim... and we're canceling your policy to boot since the contract was made in bad faith. Oh, but we're keeping all the money you paid us over the years and giving you none of it. We know this also means you'll have this on your record so you'll never be able to find insurance again, but we appreciate your business while it lasted."

Well, I’m going to need your reference on the 25%-40% claim to swallow it whole, but assuming it is true, I can see why. What percent of those are eventually paid though? Delays are normal. I’ve had claims sit for months, but they eventually get paid with no problem. Everyone on all sides knows it can take a while. Though I’ve never been to collections or had anything show up on my credit score for it. I can easily see delays with the amount of fraud that exists plus the fact that most medical files are still all manual. There is a lot of double, triple, and quadruple checking just to get it right. I’ve been on the audit of a health system and I’ve had the opportunity of looking into medical files and trying to confirm diagnosis with billing codes. It’s not easy. Ever try to actually read a handwritten prescription?

Seriously, if you want to make health insurance companies look like good institutions who care about people, then you've seriously given in to the dark side and are drunk on the koolade. The examples I list are not just flukes. They go to prove that these institutions are flawed because they have no moral compass, but rather only an interest in making money. This is why they infiltrate the system and you'll frequently find executives from insurance and drug companies on the board of directors at hospitals. They negotiate pricing and coverage behind the client's back. They also bribe our politicians so they can write legislation friendly to their corporate agendas

I’m not saying health insurance companies are “good” anymore than they are “evil”. They provide a service to individuals and are very successful doing it. Most people do not experience the bad examples you provide. The benefits they do provide, not only in their services, but also in the thousands they employ, I think more than outweighs the negatives. I’m not saying they are the only answer, or there aren’t things that can be improved, but it is what we have for now.

With respect to the influence of the corporation on government, it is that way BECAUSE WASHINGTON AND POLITICIANS WANT IT THAT WAY. Straight up fact. If politicians didn’t want the schmoozing and back door deals and greasy incentives, then they would craft legislation to change lobbying activities. But they don’t do it because they want it the way it is, making those in government more corrupt than those seeking to influence it in my opinion. Look at how many lobbyists are part of Obama’s administration! After promising not to have any in his cabinet, his administration is full of them. However, this is not unique to Obama. He just made the stupid campaign promise to “change” the system, but then feel right in, lock step with established corrupt politics.

It is also the most immoral one, which is why I call it evil

Well, we are just going to have to agree to disagree. I expect people to be moral. I expect those working at corporations to be moral in performing their duties. I think most are. I do not expect a “corporation” to do anything or feel anything, other than live up to its part of the contract, whether it be insurance or producing widgets. I expect corporations to obey the law where they operate and reside, and I think for the most part they do. I think governments ought to enforce a framework and infrastructure for business to operate that not only protects consumers but facilitates the speed and efficiency of the markets. I think for the most part this happens here in the United States, at least better than other countries. Not to say it is perfect or that there aren’t things we can do to make it better. With that said, I’m done. I’ve said what I believe. I realize you think differently and that’s fine with me.

[_bcspace]

I think Kevin is ignoring the overarching benefits of a corporation which usually far outweigh any negtives ones sees and those are the more efficient use of resources (the right price), meeting the demands of the consumer, investing capital, and providing employment.

Now I have no problem in government exercising it's true role with respect to corporations, but the current administration is actually full of people (starting at the very top) who are antithetical to the best, most neutral, and most effective economic and social system the world knows of. Their goal is to bring it down and make things worse for everyone so that a few undeserving can benefit and they can maintain their grip on power.