Three Strikes and You're Out: The Corporate Death Penalty

[Gus diZerega]

Corporations are escalating their assault on human beings while their agents in government are giving them more rights than to actual human beings. CVS's attack on city self-governance is only a small example of a much bigger problem extending all the way to the TPP. Here is an idea whose time may have come - using the old principle that what is good for the goose is good for the gander
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Three Strikes and You're Out: The Corporate Death Penalty

Californians, and other states as well, should push for the following ballot initiative: If a corporation breaks the law three times within 20 years in such a way that people are injured physically or financially, the offending company should have its assets sold to the highest bidder, the money going first to pay for damages, second, to pay for the sustenance and retraining of its hourly wage employees, and if any remains, to pay off public debt. Share value becomes zero.

Top management would be prohibited from ever working together, to destroy the culture of corruption they created and sustained. The firm’s name is abolished for a generation. Should a company change its name and claim to be “different” – as Blackwater did by becoming “Xe,” the same penalties will apply so long as top management or ownership stays largely the same, say 50% or given the politics of proxy fights, even less.

A first conviction would injure share prices by injecting uncertainty as to both management and the company’s future. With a second conviction share prices would tumble, virtually guaranteeing top management will be ousted, their careers ended. Managerial risk-taking will become buffered by managerial responsibility. A different kind of personality will be valued at all levels, pushing back against the advantages sociopaths and near sociopaths currently possess in rising to leadership positions. Human beings will benefit.

Most probably the corporate death penalty creates circumstances where it will rarely need to be employed. Top management will self-police because they stand to lose so much with even a second conviction. Even if they do not pay attention, shareholders who stand to lose everything certainly will because shareholders have no golden parachute.

So we the public win at every stage of the process.

The market economy is amoral. When bad behavior is profitable, the market encourages it, as it does today. But with a corporate death penalty the market’s profit orientation will improve behavior rather than reward corruption. The corporate death penalty moves the market away from being our master towards being our servant.

A ballot initiative provides a peaceful and humane way to bring corporations under control. If this initiative was on as many ballots as possible, and repeated regularly until passed, the issue would remain in the public eye. I'd contribute significantly to a serious effort, and I am not rich.

The average voter has had it with our new aristocrats, and unlike guillotining human aristocrats, this penalty kills no one and sets no bad precedents. It is even fun to contemplate...