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It’s basically the case that there are no effective punishments for corporate entities. The argument has been made elsewhere for a corporate ‘death penalty’, an

by Gatsky 7y ago

It’s basically the case that there are no effective punishments for corporate entities. The argument has been made elsewhere for a corporate ‘death penalty’, an actual destruction of value, brand and IP and wholesale confiscation of assets. Obviously implementation would be an issue, but imagine if there was even a possibility J&J could be sentenced to ‘corp-death’ for its role in the opioid crisis. The share price wouldn’t be going up, that’s for sure. Otherwise I think we’ll just keep being surprised by corporate amorality, over and over again.

kortilla 7y ago
There does not need to be a special case. Just higher penalties and fines.
- bsder 7y ago
  If you sent a normally functioning company into a forced bankruptcy, another company will be more than willing to pick up the assets, manufacturing, and jobs while wiping out the top management and investors.
  - dannyw 7y ago
    And wiping out the top management and investors is exactly the incentive you need so companies seek to avoid forced bankruptcy. Jobs, capital assets, and technology are preserved. I fail to see how this is a disadvantage. Volkswagon should have been hit with a $1 trillion dollar fine, and for every shareholder and executive to be completely wiped out.
    - bostonpete 7y ago
      I assume that was bsder's point.
  - kortilla 7y ago
    And that’s a good thing. The company that picks it up wouldn’t want the same thing to happen to itself so it would stop the bad behavior.
leetcrew 7y ago
outright destroying a company would inflict a lot of collateral damage. some rich people would see a fraction of their portfolio go to zero, which would certainly sting, but many more middle-class workers would lose their only job. the IP part may have some value though. it would be interesting to see what would happen if every successful judgment resulted in all relevant patents going to the public domain. play funny business with a certain pharmaceutical and it becomes a generic ahead of schedule. I suspect "make an example out of 'em" style punishments are just not very effective. if every few years a big company gets a back-breaking fine, it would make for some good news stories, but it would also be pretty easy to design a portfolio resilient against these outcomes. if I could wave a magic wand and set up the system exactly how I wanted, I would implement pretty much the opposite. moderate fines (maybe 1.5-2x the illicit gains) with a very high rate of conviction. raise the salary of prosecutors and investigators until you get people who can make it happen. I believe this would not only be more effective, but much more fair.
- Gatsky 7y ago
  Yes you make a good point about collateral damage affecting workers. Perhaps there could be a ‘death row’ lasting 5 years so workers can make a soft-landing. Fines aren’t going to work, I think that is pretty clear, as many others have said. They are very much an instrument of ‘make an example of ‘em’ aren’t they? I bet that when a large bank thinks about their ‘worst case scenario’, they are thinking about Lehman Brothers, not a mega fine. Being a senior executive in a company that got corp-deathed is surely career ending.
  - hanniabu 7y ago
    Collateral damage is fine, it helps deter others from doing business with immoral businesses doing wrong.
- deleted 7y ago
  [deleted]
- Zelphyr 7y ago
  I'd add some jail time for the corporate leadership, including board members.
Der_Einzige 7y ago
It's funny to watch folks here rediscover nationalization. Unfortunately, regardless of the justice of that action, Nationalization is the fastest way around to not just cause capital flight, but (if you're a small country) those wealthy individuals who lose will also hire thugs/counter-revolutionaries to destroy those who tried to expraproiate them. You literally cannot win. Either enjoy the corporate dread or enjoy a bullet to the head
- twhb 7y ago
  Nobody suggested nationalization. Driving away or destroying businesses that harm the country is the goal, not a consequence that only you realize. Asserting that doing so results in net capital loss is going out on a limb at best, safe havens have historically led to business flourishing. The US isn't comparable to a powerless nation, there's zero risk of Johnson & Johnson thugs beating police in the streets. Awfully convenient that your logic ended up justifying inaction.
- RootKitBeerCat 7y ago
  Or some bitcoin under the bed
- asdfgasd 7y ago
  How about a complete abolition of capital?
- Gatsky 7y ago
  How do you nationalize a multinational company?
  - Der_Einzige 7y ago
    You nationalize any domestic assets
- hanniabu 7y ago
  Why does somebody always take this to the extreme. Whenever there's a thread where people want to see corporations be made accountable for their actions it's shunned as socialism, nationalization, communism, etc. To me this just sounds like the news has successfully brainwashed folks into associating corporate accountability/responsibility with alt govs so that it's easier to get people on their side or something, idk.
0xDEFC0DE 7y ago
>Obviously implementation would be an issue Civil forfeiture seems like no big deal, I dunno what the issue would be here.
tjpnz 7y ago
How about going after the executives? They've long used responsibility and even personal liability as justification for their high salaries yet continually escape punishment.

by Gatsky 7y ago

kortilla 7y ago

There does not need to be a special case. Just higher penalties and fines.

bsder 7y ago
If you sent a normally functioning company into a forced bankruptcy, another company will be more than willing to pick up the assets, manufacturing, and jobs while wiping out the top management and investors.
- dannyw 7y ago
  And wiping out the top management and investors is exactly the incentive you need so companies seek to avoid forced bankruptcy. Jobs, capital assets, and technology are preserved. I fail to see how this is a disadvantage. Volkswagon should have been hit with a $1 trillion dollar fine, and for every shareholder and executive to be completely wiped out.
  - bostonpete 7y ago
    I assume that was bsder's point.
- kortilla 7y ago
  And that’s a good thing. The company that picks it up wouldn’t want the same thing to happen to itself so it would stop the bad behavior.

leetcrew 7y ago

outright destroying a company would inflict a lot of collateral damage. some rich people would see a fraction of their portfolio go to zero, which would certainly sting, but many more middle-class workers would lose their only job. the IP part may have some value though. it would be interesting to see what would happen if every successful judgment resulted in all relevant patents going to the public domain. play funny business with a certain pharmaceutical and it becomes a generic ahead of schedule. I suspect "make an example out of 'em" style punishments are just not very effective. if every few years a big company gets a back-breaking fine, it would make for some good news stories, but it would also be pretty easy to design a portfolio resilient against these outcomes. if I could wave a magic wand and set up the system exactly how I wanted, I would implement pretty much the opposite. moderate fines (maybe 1.5-2x the illicit gains) with a very high rate of conviction. raise the salary of prosecutors and investigators until you get people who can make it happen. I believe this would not only be more effective, but much more fair.

Gatsky 7y ago
Yes you make a good point about collateral damage affecting workers. Perhaps there could be a ‘death row’ lasting 5 years so workers can make a soft-landing. Fines aren’t going to work, I think that is pretty clear, as many others have said. They are very much an instrument of ‘make an example of ‘em’ aren’t they? I bet that when a large bank thinks about their ‘worst case scenario’, they are thinking about Lehman Brothers, not a mega fine. Being a senior executive in a company that got corp-deathed is surely career ending.
- hanniabu 7y ago
  Collateral damage is fine, it helps deter others from doing business with immoral businesses doing wrong.
deleted 7y ago
[deleted]
Zelphyr 7y ago
I'd add some jail time for the corporate leadership, including board members.

Der_Einzige 7y ago

It's funny to watch folks here rediscover nationalization. Unfortunately, regardless of the justice of that action, Nationalization is the fastest way around to not just cause capital flight, but (if you're a small country) those wealthy individuals who lose will also hire thugs/counter-revolutionaries to destroy those who tried to expraproiate them. You literally cannot win. Either enjoy the corporate dread or enjoy a bullet to the head

twhb 7y ago
Nobody suggested nationalization. Driving away or destroying businesses that harm the country is the goal, not a consequence that only you realize. Asserting that doing so results in net capital loss is going out on a limb at best, safe havens have historically led to business flourishing. The US isn't comparable to a powerless nation, there's zero risk of Johnson & Johnson thugs beating police in the streets. Awfully convenient that your logic ended up justifying inaction.
RootKitBeerCat 7y ago
Or some bitcoin under the bed
asdfgasd 7y ago
How about a complete abolition of capital?
Gatsky 7y ago
How do you nationalize a multinational company?
- Der_Einzige 7y ago
  You nationalize any domestic assets
hanniabu 7y ago
Why does somebody always take this to the extreme. Whenever there's a thread where people want to see corporations be made accountable for their actions it's shunned as socialism, nationalization, communism, etc. To me this just sounds like the news has successfully brainwashed folks into associating corporate accountability/responsibility with alt govs so that it's easier to get people on their side or something, idk.

0xDEFC0DE 7y ago

>Obviously implementation would be an issue Civil forfeiture seems like no big deal, I dunno what the issue would be here.

tjpnz 7y ago

How about going after the executives? They've long used responsibility and even personal liability as justification for their high salaries yet continually escape punishment.