The Future of Corporate Crime

[syrakusos]

Michael E. Marotta

CRIM 592: Global Crime

Term Paper Proposal

Topic: The Future of Corporate Crime: Transnational, Multinational and Global

Abstract: Giving voice to the counter-hegemonic realization that capitalism is criminogenic, the proposed paper will draw on current research in criminology, as well as on the recent findings of United Nations and various Non-Governmental Organization data in order to expose the acquisitional program necessitated by post-millennial capitalism within the privileged aggression space created for it by neo-liberalism. Ultimately, an integrative approach is suggested drawing on both inclusionary restorative traditions of First Peoples as well as the justice insights of postmodern sociology.

The fluidity of capital which creates economic catastrophes from which that same capital profits scours the social landscape to carve least-resistant pathways by which corporations are free to act as stateless persons. This is a contradiction as corporations are (or were) creations of nation-states and yet now transcend their parental homes to brazenly shop for amoral states that will harbor them. Typical of these, Norwegian shipping billionaire John Fredriksen abandoned his homeland, renounced his citizenship and took his money to the divided and occupied island of Cyprus. While singular, the move is echoic and resounding in the extraterritoriality of the U.S. automotive industry, which remains “American” in name only.

While the context of America’s dual nature as perpetrator and victim is easy for American criminologists to perceive, the fact is that German firms lead in all important metrics of actual transnational activity. Thus, the proposed paper collapses and expands the marginalization of commodified workers subjected to national corporative expansion in order to add texture to the narrative of awareness now being extended by critical and integrative criminologists.

[BaalChatzaf]

Michael E. Marotta

CRIM 592: Global Crime

Term Paper Proposal

Topic: The Future of Corporate Crime: Transnational, Multinational and Global

Abstract: Giving voice to the counter-hegemonic realization that capitalism is criminogenic, the proposed paper will draw on current research in criminology, as well as on the recent findings of United Nations and various Non-Governmental Organization data in order to expose the acquisitional program necessitated by post-millennial capitalism within the privileged aggression space created for it by neo-liberalism. Ultimately, an integrative approach is suggested drawing on both inclusionary restorative traditions of First Peoples as well as the justice insights of postmodern sociology.

The fluidity of capital which creates economic catastrophes from which that same capital profits scours the social landscape to carve least-resistant pathways by which corporations are free to act as stateless persons. This is a contradiction as corporations are (or were) creations of nation-states and yet now transcend their parental homes to brazenly shop for amoral states that will harbor them. Typical of these, Norwegian shipping billionaire John Fredriksen abandoned his homeland, renounced his citizenship and took his money to the divided and occupied island of Cyprus. While singular, the move is echoic and resounding in the extraterritoriality of the U.S. automotive industry, which remains "American" in name only.

While the context of America's dual nature as perpetrator and victim is easy for American criminologists to perceive, the fact is that German firms lead in all important metrics of actual transnational activity. Thus, the proposed paper collapses and expands the marginalization of commodified workers subjected to national corporative expansion in order to add texture to the narrative of awareness now being extended by critical and integrative criminologists.

Alan Sokal would be proud of you.

Ba'al Chatzaf

[Christopher]

I'm interested to see more of your perspective. Is the paper finished?

[syrakusos]

Alan Sokal would be proud of you.

Ba'al Chatzaf

Thanks for getting it. My first proposal was about the Chinese counterfeiting industries that churn out tons of fake numismatic collectibles. That was rejected as not important. So, I offered the above. In fact, my thesis is that capitalism will be here for a few more years, at least. I found books from 100 years ago and from 50 years ago projecting the future of capitalism and some of course predicting its demise.

More to come...

Christopher -- the bulk of the basic research is done. I compiled a bibliography and wrote out my excerpts from those books. I still have some journal articles to work through. I will be writing it over Thanksgiving Weekend. (I also have the Michigan State Numismatic Society convention this weekend. I am placing an exhibit on "Xenonumismatics: the moneys of fantasy and science fiction.")

Edited November 25, 2009 by Michael E. Marotta

[Charles R. Anderson]

A proposal larded with all the acceptable buzz words, it appears.

Now it seems to allow you to discuss corporate socialism, but not by that name. Or corporate thieving aided and abetted by government, but only if you seem to favor it.

As for limiting the power of government through the mobility of capital and employees, wow, what a wonderful escape route! At least there is sometimes one way to teach governments a lesson.

[Christopher]

Christopher -- the bulk of the basic research is done. I compiled a bibliography and wrote out my excerpts from those books. I still have some journal articles to work through. I will be writing it over Thanksgiving Weekend. (I also have the Michigan State Numismatic Society convention this weekend. I am placing an exhibit on "Xenonumismatics: the moneys of fantasy and science fiction.")

Keep us updated. Also, hope you still have enough time to relax over this weekend

[syrakusos]

The truth takes you where it leads ...

The Future of Enterprise Crime:

Transnational, Multinational and Global

Abstract: If criminology is to develop applicable theories to explain and mitigate 21st century crime, the vocabulary of conceptualization must surpass 19th century Marxist cant about dog-eat-dog competition, and zero-sum games between corporations whose ownership shares are traded on regulated stock exchanges. They still exist, but they are not the future of capitalism. They are not even its present. Here and now, private equity investors capitalize enterprises that form cooperative networks seeking Nash equilibrium.

The assertion that capitalism is criminogenic can be traced to the work of William Adrian [Willem Adrianne] Bonger. Criminality and Economic Conditions [Criminalité et conditions éconontiques] was published in 1905. Bonger’s thesis was that economic exploitation is the cause of crime. Bonger relied on Marx’s Capital and the Erfurt Program and also Karl Kautski’s Economic Doctrine of Karl Marx [Marx’ Ökonomische Lehren]. (Bonger 247). Bonger begins with a hefty analysis of sixty antecedent theorists of crime, from Thomas Hobbes and Jean-Jacques Rousseau, through Cesare Beccaria, to those modern to his time, including Havelock Ellis. He presents and investigates the statistical data offered in support of those claims. For Bonger, the other theories fail to explain the facts; and only the theory of economic exploitation explains all of the facts. “Capitalism is a system of exploitation in which, in place of the exploited person’s being robbed, he is merely compelled by poverty to use all his powers for the benefit of the exploiter.” (Bonger 390). Capitalism causes poverty; and poverty causes crime.

Following Bonger critical criminology accepts the premise that capitalism is criminogenic. That the harms caused by corporations far exceed the losses attributable to “street crime” is not an unfortunate accident: the very nature of commercial society encourages predation. Not only does deprivation cause crime, but so does prosperity.

Capitalism is a system of accumulation that organizes production and social reproduction to extract surplus value. As it does so, accumulation generates those behaviors registered as crime by the state. … Most crime …is motivated by the desire for property or money and is a rational response to the pressures of inequality, competition and insecurity, all of which are essential parts of capitalism. As the economy expands, it is reasonable to assume that these pressures escalate, increasing the number of acts recorded as property crime. … Low [population] density is associated with high rates of property crime. Because low density characterizes advantaged cities, we see that such cities are the sites of property crime, a finding consistent with the general claim that economic growth increases property crime. (Humphreys and Wallace)

[...]

Conglomerate corporations were countered by conglomerate unions. Both relied on political action councils (PACs) and lobbyists to influence government policy. These broad and vast organizations seem omnipresent: every town of size has a representative business or union. The result is that conglomerates are able to directly influence Congressional representatives in a coordinated manner at the local level, but across the entire nation, on the issues of importance to the business or union. (106-114). Citing John Kenneth Galbraith’s New Industrial State, Spruill asserted that conglomerates dispensed with the need for genius. (111)

Spruill predicted three possible outcomes for conglomerate capitalism. The global economy would continue to be dominated by a few firms as the final stage of economic development (continued capitalism). There could be a transition to socialism via government ownership of the means of production with takeovers of conglomerates. (The bailouts of Lockheed and Chrysler in his time suggested this.) Finally, we could see corporate planning driving the economy as corporate socialism. In any case, the conglomerate structure would prevail. “More control… reduces uncertainty…” (112-115)

Spruill did not see Microsoft or Intel or Apple. Spruill saw the computer as a tool for management of large conglomerates, but did not see the personal computer revolution coming. He also did not foresee the death of LTV, or the breakup of ITT. On May 29 of this year, AOL and Time-Warner filed for divorce.

[...]

Today, private equity ownership is a new trend in business governance, taking corporations out of “public” ownership and giving management control to the people who own them. This is not “the future of capitalism” but it is an important trend that runs contrary to the present mainstream of thought.

Private equity firms can take on a wide range of forms. For one thing, they are generally not regulated by law, so their governance only must meet the needs of the investment partners. Perhaps the two most common arrangements are buyouts and venture capital. Other forms include mezzanine financing, private investment in public equity and fund of funds investments. CalPERS, the California Public Employees Retirement System is, in fact, a largely unregulated limited partnership. (Cendrowski 7-9) Today, CalPERS holds about $180 billion in assets, down a bit from the 2007 maximum of $270 billion. Like much else in the world, the relationships between and among entities can be complicated SEIU (Service Employees International Union) has representation with CalPERS governance. CalPERS invests in corporations in order to pay retirement benefits to public employees. Thus, SEIU is touched by complicity when the private equity fund Carlyle Group buys the management firm Booz Allen Hamilton which is one the dozen largest military contractors in the United States and which has strong ties to the CIA.

[syrakusos]

Responsibility and ownership also come together in cooperatives. Ancient roots aside, the first cooperative was in and of Adam Smith’s Scotland. The Fenwick Weaver’s society was founded on March 14, 1761, to sell oatmeal at cost to members who had prepaid for its delivery. Today, cooperatives sell electrical power, telecommunications services, farm equipment, hardware and groceries. Credit unions are cooperatives, the largest being the Navy Federal Credit Union with $25 billion in assets. Credit unions have $668 billion in assets and more than 86 million members. Among the world’s most visible cooperatives is Mondragon in the Basque country of Spain, with 2008 annual revenues of €16 billion and over 92,000 employees. Mondragon workers own manufacturers and other businesses in 20 nations including China and Taiwan, Germany, India, and Turkey. In the USA, they operate Orbea USA, of Little Rock, Arkansas, known to serious bicycle enthusiasts. Easily more familiar to the average grocery shopper in the Midwest is the Land O’Lakes label a co-operative of dairies with year to dates sales of $7.9 billion. ACE Hardware and TrueValue are both cooperatives. Competing to bring you news are Agence France-Presse and the Associated Press.

Cooperatives follow seven internationally recognized principles as the basis for doing business:

• Voluntary and open membership

• Democratic member control

• Member economic participation

• Autonomy and independence

• Education, training and information-sharing

• Cooperation among cooperatives

• Concern for community

All of the above being as it may, cooperatives are not immune to error and criticism. Searches on CorpWatch (www.corpwatch.org) do return stories about ACE Hardware and the Tallahassee Memorial Hospital Credit Union. However, Land O’Lakes and Mondragon are still clean, apparently. Human institutions are fallible because to err is human. Actual events speak to the application of declared values and the fact is that despite their global reach, cooperatives are largely resistant to the pandemics of moral failure that incubate in corporate environments.

[...]

A game theory developed by John Forbes Nash demonstrated how all players could find profitable equilibrium by sharing information while competing. Classical games such as tic-tac-toe, chess and football, provide a simple model for a market as seen from the perspective of critical criminology: two players; your win is my loss. Modern game theory provides a richer set of outcomes. Perhaps the best-known example in popular business literature comes from the auction of telecommunication frequencies by the US Federal Communications Commission on July 27 and 28, 1994, the PCS (Personal Communication Service) Auction.

Absolute private ownership of the electro-magnetic spectrum was proposed by Ayn Rand. “The Property Status of the Airwaves” (Objectivist Newsletter, April, 1964), reprinted in Capitalism: The Unknown Ideal (New American Library, 1966).

[syrakusos]

As it is by definition a criminal enterprise, money laundering presents two unique problems. In the first place, it could be the world’s third largest business with currency trading and automotive production at the top two positions. Second, money laundering provides a “positive multiplier of having cash move through an economy such as Aruba and the Netherlands Antilles.” Bankers, profit, of course, but also information clericals, and many others who have work, as well. (Richards, 44)

[...]

If money laundering – which, if criminal in the Kantian deonotological sense, is perhaps analogous to wiping your fingerprints from surfaces you have touched – were not illegal, it would be welcomed as a productive enterprise, the arbitrage of cash into and out of electronic media. After all, cash represents only about 8% of the economy in the United States.

[...]

The term “network” is correctly applied, for instance, to the trafficking in foods, decorative seashells and copper among widely dispersed Native American tribes. The word is an analogy, of course. A net is a series of knots; the words share a root. A network is a large net. The oldest known fishing net comes from China circa 5000 BCE. The oldest known trading network connected Assyrian cities with cities in the Indus valley, about 3000 years later. Thus, surprisingly, social networking is a relatively recent invention. It depends on a context of local anonymity or intercourse with outsiders. Thus, networking literally ties together distant individuals who otherwise would be unknown to each other. In that, it allows independence while rewarding (indirect) interaction. Networking is to socializing as money is to barter.

[...]

No society has been without harms caused by willing perpetrators. America was colonized and settled by diverse groups of Europeans many of them seeking to build some kind of “city on a hill,” a new society for a New World. California alone knew about a hundred. Among the consequences of these searches for earthly perfection were the serial genocides against the Native Americans. Speaking in Ann Arbor at an exhibition of Prisoner Art, April 7, 2007, Native American prison reform advocate, Stormy Ogden said, “Every society has offenders. We just never built prisons.”

[...]

For criminologists perhaps no better proof of the constancy of human action across space and time can be provided than the Code of Hammurabi.

The Code of Hammurabi shows unmistakable development in the wide range of circumstances that it addresses. Some involving husbands and wives and adultery may seem timeless. Others, involving merchants, interest, storage fees, and contracts can only seem immediate. Every civilization has had merchants and apparently they all have faced generally the same challenges and opportunities. Judging from the lack of citation within the Code, King Hammurabi himself did not expect that merchants could bankrupt the kingdom. However, other “white collar” crime are mentioned, including bearing false witness, denying debts or falsely prosecuting for nonexistent debts, and pollution of watersheds, waterways, and other resources.

[...]

Therefore, it is easy to predict while the specific forms and formats of business will evolve greater complexity, the essentials will remain eternal.

[...]

The “cyberpunk” genre may be an artifact of the 1980s. Some, like William Gibson, continue to write to it. Set within a generation of the present, it is a world of rustbelt cities, wondrous personal biological implants, orbiting enterprises, mercenaries, corporations, hackers, and a few remaining governments, usually smaller and unobtrusive. Unlike other projections, the novels tend to portray a rich array of independent interactions. It is not that the demise of the nation state caused the San Francisco Golden Gate Bridge not to be repaired after “The Big One” only that the two things happened: the state declined; damage from the quake is unremediated. The interesting aspect is not that this is a prediction for San Francisco, but that the first of these stories was written before Hurricane Katrina. If not repairing New Orleans and not rebuilding it to superior standards is a “corporate crime” then it will remain so because the city is not going be “rebuilt” (to superior standards) in our lifetime. It may well be repopulated. But that is a different trend, entirely.

We study crime on Earth because it seems to be all we know. Crimes in outer space seem unreported. Whether satellites are destroyed, or orbits violated, we have little information, and less concern. Assaults seem non-existent… for now… How would we know? And what would we do? We have so many problems here and now that worrying about whether astronauts about the International Space Station tussle in zero-gravity seems to piteously ignore the troubles we can identify and solve. Perhaps so. But given the growing population of people who go off-planet, it is only a matter of time. Already, the VSS Enterprise is being tested, a joint venture between Richard Branson and Burt Rutan. Their company, Virgin Galactic, did not sign the UN Space Treaty.