The idea of a corporation was invented a long time ago in order to limit the liability of a group of shareholders to only their investment when they are undertaking a project that is to the benefit of society in general.  A corporation is, in legal terms, a person, with all of the same rights, and bound to the corporate charter of state in which they were incorporated.  These first corporations were things like bridge and road committees, and trading companies.  These companies gave a clear benefit to society, and hence their status of “limited liability” could be bared.

Yet as corporations have expanded and increased their role in society, they maintain their curious trait of having the rights of person, without having the typical limitations of a person in any way.  Monsterous actions, done in the name of a corporate interest, are well documented.  But the typical social structure that prevents such injustices in personal interactions (punishments from shame to incarceration) cannot work on an entitiy that does not exist in physical form and has no human attributes.  You cannot put ExxonMobile in jail.  You cannot shame McDonalds.  You can fine them, or put public pressure on them.  But you cannot do anything to them that would resemble the gravity of a peer group interaction.

Cigarette companies lied for years about the harmful effects of their product, and unless I am incorrect, no one is in jail for it.  Detroit and Houston lied for years about the safety of lead in gasoline, and its necessity for engine operation.  Monsanto continues to lie about the safetey of many of its chemical products including rBGH (banned in every G8 country except for the US).  Once again, I don’t think anyone ever went to jail for any of these crimes.  And these are things that killed, diseased, or crippled hundreds of thousands of people.  These examples are just easy targets off of the top of my head–finding more is not difficult.

So if one person can go to jail for 15 years for drug posession, and a company can engage in fraud and deception leading to the deaths of those who are exposed to their product with no consequences, I don’t think I’m out of place saying that there is a problem.

A solution will neither be simple nor quick.  The allure of profits as a result of corporate championing seems to appeal to our very human nature.  Additionally, we are disproportionally lead by those few individuals (the CEOs of the world) who are single-mindedly driven to expand their power and increase shareholder return.  Those of us who care less get caught in the aftermath.

A good first step would be to recognize that nowhere in classical economics is the “winner-take-all” “dog-eat-dog” world of capitalism championed.  Adam Smith’s invisible hand was tempered by society.  Any one who uses his name to vindicate corporate profiteering has never read what he wrote, or is maliciously deceptive.  The individual pursuit of profits is something that can go to far.

The robber barron era of Carnegie, Morgan, and their ilk was aptly named, and we’ve made strides since then, but we can only hope that the “invisible hand” of public sentiment pushes corporate interests to line up more closely with those of society.