Tuesday, December 27, 2005
The Devolution of the Corporation
Have you noticed that the larger corporations seem to be wandering lost through the world economy? That corporate issues are far more important to the Boards of Directors than are the actual products and services produced? Corporations fill their home offices with unneeded executives--vice presidents and assistants to vice presidents--and their regional offices with regional managers and assistants to regional managers, not to mention area managers and their assistants, safety officers and human resources officers. Sexual harrassment officers, for cryin' out loud.
Scott Adams knows it, and I know it: his Dilbert cartoon series is a lot closer to the mark than many corporate officers would ever admit.
The dirty little secret is that the rank and file in many of these firms is given the short shrift, in the form of understaffing, underqualified staffing, a plethora of needless rules and a communications wall between lower and upper etchelons. Executive ranks regale themselves with high salaries, bodaceous benefits and luxurious working spaces. Even in non-union industries employees are treated as interchangeable ciphers when they're regarded at all.
Wow! This all sounds like an introduction to some Marxist tract, doesn't it? Well, that's not it at all, boys and girls. Attend!
There's an illness in the corporate structure. It'd be guesswork to try to say whence the illness began. Some say it was with greedy owners of the firms. That might be true in the isolated case, but I don't think it captures the root of the problem.
So, class, from what entity do nearly all of our problems eminate? Anyone?
Hermione gets it right once again. Government! Ten points for Gryffindor!
The beginnings of the current malaise coincide roughly with the beginnings of the rapid increases in the size and scope of government, not long after the War Between the States. During that period, encompassing roughly seventy-five years, we find that many of our favorite technological advances were begun. Automobiles. Transcontinental rail travel--and shipping. Aircraft. Telephones. Radio. The assembly line. It's a long list.
Why haven't automakers filled the skies with flying personal cars? Why hasn't the aeronautics industry made travel between the planets and asteroids a routine practice? Why aren't we living 150-year healthy, vigorous lives?
Virtually all of these industries and others had the following in common: The ownership of the firms comprising these industries were overwhelmingly hands-on builders. Henry Ford built automobiles, as did Ransom E Olds and most of the others. Alex Bell figured out the telephone. Thomas Edison....what can I say: he did everything. There are many more; I'll spare you the list.
Who are our corporate heads now? Lawyers. To a man. The only major exception that comes to mind is in computer software development. Not surprisingly, software development is just about the only industry in which there's still quite a bit of innovation. As the software industry turns more and more toward lawyers to head their firms, expect to see this innovation gradually go into decline (I'm thinking that Microsoft may have already begun the first dance).
We now have hundreds of large corporations, headed by lawyers, carrying relatively few engineers (or accountants or medical doctors or other scientists) in top management, doing what they've always done, by rote, with innovation largely stifled.
Now we come to the "why?" Why would movers and shakers; inventors and builders, turn their babies over to twentieth (now twenty-first) century mercenaries? Because, thanks to the huge and ever-heaping numbers of government taxation and regulation, it's become a major pain in the ass to innovate. You have to be a lawyer to be able to figure out whose palms to grease and how to skirt the worst of it.
Ask Preston Tucker. While he did take some shortcuts, they were shortcuts across government regulations. In a short time, I'm convinced he would've had a product that would cause the other automakers to make adjustments to compete. They didn't want to have to make adjustments, so the lawyers at GM used the lawyers in the government to eliminate the Tucker.
There's really only one cure for this mess. When one of these humungous corporations go belly-up, which occasionally happens, they should be let to die. Assets should be sold off to, one hopes, to smaller firms who can actually perform the work that might have been done by the failed corporation, had it remained capable.
Government needs to leave business alone. Government employees are drones. Unable to be productive on their own, they seek the shelter of government to provide them with their needs without need to produce. How can they be expected to improve the productivity of others? They cannot. They can only become impediments to productivity. Regulation by government must end.
Taxation must end. Anything government can't get We the People to finance by voluntary means shouldn't be done. During the aforementioned times of American productivity, there was little or no taxation. Members of productive firms were able to work unshackled, reinvesting as much of their profits to improve their productivity as they wished. Today, these same individuals proceed only after severe regulatory restrictions and approximately a fifty-percent "protection" rakeoff to government.
What a handicap! Fifty percent of everything everyone earns going to utter waste! Actually, it's worse than waste: those who get the fifty percent delight in using it to buy the shackles for those productive among us. Many governments have been taken down by their own citizens (read victims) for less!
The US Constitution would be a pretty good guide, if anyone in government would read and heed. Ok, I know the Constitution was written a long time ago by "libertarian pioneers," and we've learned a lot since those days, IF government followed the Constitution and the Bill of Rights to the letter, we'd have a free society with which we'd have relatively few and minor complaints. We could do away with government regulation of money at our leisure, after that!
They've killed Freedom! Those bastards!