Friday, March 2, 2007

Fighting City Hall II

The police break into a room where an illegal poker game is taking place. Four men are sitting at the table, money is scattered about and one of the men is about to deal. The man to the dealer’s right explains, “I’m not gambling. I just came here to collect a debt that Ed here owes me.” With that, he scoops up the money in front of him and puts it in his pocket. The next two men insist that they are just friends who getting ready to order dinner from room service and the money is to take care of the tip.

The cops turn to the last guy. He has a big pile of money in front of him and he’s holding the deck of cards. “Well,” they say, “We’ve got you at least. You’re under arrest for gambling.” The man replies, “With who?”

In the fracas that broke out at WRPI in my last year at RPI, I was kicked off the air about 20 minutes into my shift, despite the fact that I was signed in as the on-air engineer; I was also on the programming committee. Nevertheless, the Station Manager shut me down; in fact, if memory serves, he dumped the transmitter and shut the station down, at least for a while.

He could do that because he was the Station Manager, the only person in the entire WRPI organization that was officially recognized by the FCC as having authority at the station. One can imagine any number of ways to organize a radio station, but FCC regulations require that ultimate authority about what goes out over the air resides with one guy.

Laws of incorporation work in similar ways, demanding that there be certain accountable (in theory, anyway) persons in the corporation, which means that there are strong tendencies to organize corporations in certain ways. If you want to try something else, you have to use different methods of legal organization, co-ops, unions, granges, political parties, proprietorships, limited partnerships, etc. Most of the really strong privileges, however, go to corporations, and corporations are almost always top down, command and control organizations.

In fact, if you look at the histories of corporations in the latter part of the 19th Century, most of them used the straight-ahead military model of organization. This makes sense, of course, since armies tended to be the largest organizations around (with the possible exception of the Catholic Church), and most people with managerial skills developed them in military service.

Nation states also tended to be organized along military lines; for one thing, it was military action (conquest and defense against conquest) that organized nation states in the first place. City states, the predecessor to the nation state, tended to organize around two things: a marketplace (plus the things that assist a market, such as transport systems like roads and rivers) and a defensive structure (city walls and/or the protecting army).

Individual ambition, when embedded in a large organization, tends to be about climbing the organization. One really interesting variation on this theme is the ambitious individual who takes control of a small organization and builds it into a large organization. In the latter case, the personal identification with the good of the organization is often much stronger, for good or ill (many is the small but growing organization that foundered because the guy at the top couldn’t relinquish day-to-day control once the organization got too big for him). In the former case, it’s quite common to see dog-in-the-manger, stab-in-the-back, or even scorched earth tactics from a climber who is willing to see the organization harmed, so long as they themselves advance.

In extreme cases, you get what is known as “control fraud:”

“Control fraud occurs when conspirators are able to take control of an institution in order to exploit the trust and authority of the institution to convert its assets to personal use.”

The grand scandals of the past few years, Enron, WorldCom, Tyco, Global Crossing, Amaranth, (well, the list just goes on and on doesn’t it?) should be viewed as just the tip of the iceberg. More subtle and insidious are the cases where the companies still exist, but are left debt bloated, stripped of goodwill and a loyal workforce. They are hollowed out, in other words, assets converted to cash that is then used to buy back their own stock so that the stock options will stay above water, at least until the lads at the top can parachute back to their gated communities.

It’s one sort of individualism, I suppose.

“Money’s just the way you keep score.” – The Wheeler Dealers


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