The world’s biggest companies are running wild and ruining the planet without any real consequences. Mic’s AJ Dellinger has a solution: a corporate death penalty.
So much about the world is broken right now. The planet is boiling, inequality is skyrocketing, and government gridlock is more darkly comic than ever. The Hollywood industrial complex regurgitates old stories and makes them worse, while music execs play to the whims of the algorithms more than any sense of craft. It’s all just so depressing. How I’d Fix It is Mic’s series of solutions to society’s ills. Got a fix of your own in mind? Email firstname.lastname@example.org with your pitch, and be sure to include “How I’d Fix It” in the subject line.
We are living in the golden age of corporations behaving badly. To be fair, they have always behaved badly: pursuing profits instead of anything resembling social responsibility, stomping out organized labor movements, funneling absurd amounts of cash into the pockets of executives while refusing to offer a livable wage to employees.
But since the start of the new millennium, we have had some all-timers on the corporate malfeasance scale. Investment banks like Merrill Lynch, JPMorgan, Citigroup, and Goldman Sachs aggressively ignored warning signs of looming financial disaster until the entire housing market collapsed. Volkswagen intentionally misled regulators, allowing its diesel vehicles to emit smog-forming nitrogen oxides at up to 35 times higher than the legal limit, worsening our air quality. Fossil fuel companies like Exxon, Chevron, and BP have ignored the science of climate change and burned gas and oil with abandon, exploiting the Earth and leaving behind massive messes for others to clean up. Facebook contributed to an attempted insurrection and an actual genocide.
The penalties faced for all of these crimes against humanity have been, to use a formal term, jack shit. Yes, fines get levied, hearings get held, promises that this will never happen again are made — both by the perpetrators and by the overseers. And then it happens again. And again. And again. All the while, the companies responsible for these violations of the public trust just get wealthier, their stocks climb higher, and their executives start cashing in with bigger bonuses for successfully “turning around” the company.
It’s time to do something about it. It’s time to institute a punishment that fits the many crimes that these companies commit, and it’s time to give the general public some real justice for being manipulated, lied to, and even killed — all while being asked to fork over taxes that get turned into sweet, sweet corporate subsidies and bailout money for the very same companies that fucked us.
It’s time for a corporate death penalty.
Who gets the guillotine?
Before building the guillotine big enough to cut off the head of a multinational conglomerate, we need to figure out who deserves it. This is complicated because the severity of some of these offenses, as well as just how responsible the corporation is for them, is subjective.
Take Facebook — er, Meta — for example. We know Facebook sucks. Its platform was used to organize a coup against democracy in the United States and a genocide in Myanmar. Instagram is causing young people to experience major issues with body image and exacerbating mental health struggles. WhatsApp became a central hub for conspiracy theories and anti-vax trash. But how much of this can be tied to Meta directly? How much of it was encouraged and promoted by the company, and how much of it was simply happening on its platforms?
One metric that can be used for determining if a corporation is doing more harm than good is a very literal one: Does the company kill more people than it employs? This is the standard that Joshua Pearce, an academic engineer at Western University in Ontario, Canada, came up with when he explored the concept of a corporate death penalty. In a 2019 study published in the journal Social Sciences, Pearce looked at entire industries rather than single corporations to determine which sectors of the economy could clear what he described to Mic as “the absolute lowest bar an industry must get over to exist.”
Despite setting the bar so low, some industries still managed to fail Pearce’s simple test. According to the study, the coal industry was found to be responsible for about the same number of deaths each year — largely the result of air pollution — as the number of people the entire sector employs. It was far worse for the tobacco industry, which kills about four times as many people as it employs in the U.S.
In my opinion though, this standard is far too generous. Consider that these companies are likely employing mostly the same people each year, yet killing new people every year. You can’t kill the same person twice, though surely some company would try. We could move the bar to something like, if you kill more people than you employ in a five-year span, you have to cease operations. That’d probably be enough to put oil companies in the crosshairs: An estimated 8.7 million people died in 2018 alone as a result of pollution stemming from fossil fuel usage, according to a study published in the journal Environmental Research, while the industry employs an estimated 9.8 million people in the U.S.
But death also isn’t the only way that corporations can do harm. In 2017, Equifax exposed the Social Security numbers of more than half of the adult population of the U.S., putting each person at risk of thousands of dollars of personal loss from theft and identity fraud. They didn’t kill anyone, but they did mess up royally. So expanding the standard from “killed” to “harmed” may be useful here. This also helps with cases like Volkswagen, which sold an estimated 590,000 vehicles in the U.S. alone that contained devices installed specifically to evade emissions standards. All of those cars had to be recalled, and both the government and consumers were defrauded by the scheme. That gives us a good benchmark for damage done, even if no one directly died from it.
Quantifying harm is tricky. If we’re setting up a government office to carry out trials against corporations behaving badly, we’ll have spreadsheets for this, and we’ll take into account the fact that each case is different. For now, some napkin math will have to do. And money is perhaps the best measure — money lost from a company’s failure, or spent because of a company’s mess. It also needs to include the time spent addressing the issue. It might only take 15 minutes to sign up for fraud prevention services to protect your identity following the Equifax hack, for example, but that’s 15 minutes you’ll never get back and shouldn’t have had to spend in the first place. Your time isn’t free.
Physical harm, and especially death, should carry more weight. We can start collecting the medical bills of people who experience adverse health outcomes as a result of pollution, for instance. But we should also put a modifier on that to account for additional harm; it’s not just the cost of care, it’s the loss of health, inability to work, etc. Let’s multiply any physical harm by two to encompass those damages.
Outright death is obviously the toughest (and grossest) to turn into a dollar figure. Someone will have to do the deeply unfortunate work of calculating the value of life, but that is work that needs to be done to calculate the harm a company does. There’s a whole sector of insurance dedicated to the value of someone’s life; there’s an actuary out there somewhere who can be specifically tapped for this type of calculation.
How to kill a corporation
Now that we have harm calculations established, we’ll have to determine the benefit of a company the same way. The number of people employed metric is useful, so let’s turn that into monetary value, too, by using employee wages and benefits. The value of a company will be determined by wages and benefits paid out to employees — excluding the suits who take home multi-million-dollar pay and fat annual bonuses.
So officially, here’s the standard: If you do more harm over a five-year period than the value you provide to your employees, you are eligible for the corporate death penalty. Unofficially, let’s keep it simple: If you fuck up the one job we trust you to do, we’re sharpening the blade.
As for how we’ll actually perform this execution, well, that part is easier than you might imagine. Pearce says there’s already a legal basis for carrying out a corporate death penalty, but we’ve grown too wary of actually using it. “What it means in practice is a revocation of a corporation’s charter for significant harm caused towards society,” Pearce tells Mic.
It might sound too simple, but it’s really not. We’ve done it before. Governments, state and federal, grant corporations charters to allow them to operate in a given jurisdiction. Implied in issuing that charter (in some places, like Wyoming, it is stated explicitly) is that those businesses are expected to serve the public interest in some way: providing goods or services, employing people, contributing to the community somehow. At a certain point, we can decide that a corporation is doing more harm than good and is no longer contributing productively to the community. When that happens, the charter is revoked. At that point, Pearce says, “the company would just cease to exist as a legal entity.”
What about the workers?
There’s going to be fallout to this, of course. Employees are going to lose their jobs; factories are going to sit empty; tons of equipment and inventory will go unused. Ideally, another corporation (hopefully one that operates more ethically) will be interested in picking up the slack. But we can also help workers find their way into other jobs, where they might actually be better off anyway.
Let’s dig into the company coffers a bit. The profit that the axed company has been holding onto can go to employees to make sure they are taken care of. It can be used to make COBRA payments so they continue receiving health insurance, or it can pay for them to go to college to learn a new skill or get training for a new career. It can sustain a fund to cover expenses during an extended job search, pay for child care, or whatever else folks may need to land on their feet.
Oh, and no golden parachute for executives, either. Too often when a company is caught breaking the law or violating the public trust, the people at the top make a comfortable exit, lining their pockets with enough money to live out their lives without ever needing to work again. Bonuses, salaries, and other big payouts for the executives who led the company on its death march will be stripped and put into the fund to make sure employees can transition into a new job.
Ultimately, workers might end up in a much better situation than they were in. Take coal workers. According to a 2016 study Pearce published in the journal Energy Economics, the average coal worker would make more money by switching to a job in the solar industry. In fact, Pearce found that the cost of transitioning the entire workforce of a coal company to the solar industry could be paid for with the CEO’s annual salary — which is a pretty good idea, frankly.
As for the executives? They’ll get a nice lifelong ban from working in the same industry or sitting on the board of a corporation.
Killing a corporation might sound extreme, but look at the harm that some of these businesses have done. They have an outsized influence on not just their sector or their employees, but on the whole damn world. Facebook fails to moderate its platform and a genocide happens. Banks slack on doing due diligence on mortgages and nearly 9 million people lose their jobs. It’s time for some actual accountability. No more wrist slaps, no more fines. Maybe companies will take social responsibility seriously when there’s a blade hanging over their heads.