Subject: Re: street performer protocol
From: "Jonathan S. Shapiro" <>
Date: Sat, 6 May 2000 17:50:36 -0400

> > "Entities" don't break laws; people do.
> That is naive ... the fact is, as Jonathan stated in a more formal
> way, that is is like saying that the gun is respnsible for the
> shooting... So in the end, it is immaterial to know the actual person
> who comitted the crime, it is basically a corporate crime.

Actually, that's just the opposite of what I said. I said that individuals
commit crimes. Corporations are social structures, and these social
structures create contexts in which there is pressure (both positive and
negative) to conform in certain ways. Some are criminal. In the end,
however, it is the individual who acts or fails to act. The problem is that
as individuals we try much of the time to behave in normative ways.
Corporate culture sets a norm to which individuals usually conform, and that
norm may in some cases be disfunctional in the eyse of society.

I *did* mean to say that the corporate structure needs to be fundamentally
altered. Otherwise, you simply feed new people into it and it generates the
same behavior all over again.

> If the executives of a company do not do what the
> shareholders expect, they are being replaced.

The large shareholder has this power. The small shareholder basically
doesn't unless something really extraordinary happens.

> But no one is directly
> guilty either, except the company itself.

I would argue that *everyone* is directly guilty. The problem is that the
people as individuals failed to question the norm, and in failing were led
to act improperly in a systematic way. We must somehow learn as individuals
to question more often.

However, I'ld agree that at some point we get into the brainwashing debate:
by altering the normative environment we can cause even the most sensible
people to behave in improper ways. As I believe Microsoft did.

The curious property of corporate cultures is that the entire process goes
on at a metalevel, and that it is reflective. A company culture, once it
takes hold, is self-sustaining.

I have often said that the first 10 to 15 hires are the most important,
because they will set the culture and style for the corporation as it grows.
If you haven't got it right then, it takes tremendous leverage and energy to
change it. Now that I pause to think about it, it's pretty clear that
Microsoft is a case in point. The key figures in setting the culture were
(and are) Gates and Balmer. It shouldn't surprise any of us that the
resulting corporate culture is "take no prisoners" and has absolutely no
regard for the consequences of its actions.

>   Not that I would be adverse sending CEOs to jail more often.

Speaking as a former CEO, I think you overestimate the power of the CEO
rather badly. A good leader (CEO or otherwise) *can* change a culture, but
it's a slow and continuous process. Jack Welch is a good example of one who
has, and I recommend that you read "Jack Welch and the GE Way" before
pursuing this line of reasoning further. While Welch succeeded, it took a
very long time, overwhelming patience, and a truly exceptional leader to do
it. By way of contrast, Lou Gerstner, who is very very good, has turned IBM
around but failed to provide an effective vision or culture for the company
(yet). My point is that it takes a total outlier of a CEO to accomplish what
you assume can be done as a matter of routine.

>   If we do not control corporations, harshly, they'll control us
> ... and are already doing it to a large extent. They have more
> influence on politicians (as corporate entities) than the voters.

I am not a great believer that the sky is falling, but Larry Lessig's book
("Code and Other Laws of Cyberspace") makes this same point in a compelling
way. Leave aside whether corporations are evil; by and large they are merely
self-interested. Lessig, however, points out that the checks and balances in
the law that protect us from our respective governments exist essentially to
protect a little guy (me, you) from a big guy (the government). As
corporations come to wield power in our lives in degree comparable to that
of the government, we will come to need protections from that power. In this
regard the law is far behind. The battle being waged about aggregation of
personal information in the US is a good example. Corporations are putting
in place systems and norms that will retain them in power for a long time.

> > What you are suggesting is that millions of retirees and middle class
> > investors should have their investments destroyed.
> Why not... they take a risk ... they do not mind big wins, they should
> not mind larges losses. Isn't that the american way ?

Well, no. The middle class and retiree category basically doesn't engage in
high-risk investment. They invest for long-term stability and steady growth.

That said, the stock market *is* a risk investment, and to the extent that
they have invested in something that proves to be bad news, well, sometimes
the bear gets you... [Of course, in the stock market it rarely helps to run
faster than your fellow mountain climber :-)]