Simanaitis Says

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A CORPORATION is a legally authorized entity formed to pursue a particular goal. It might be manufacturing lightbulbs, selling firearms, or myriad other endeavors of modern civilization.

Two things recently prompted me to think about corporations, the good and the bad. The first is Dick’s Sporting Goods, Inc., making a corporate decision to stop selling semi-automatic firearms and high-capacity magazines to the public. Also, the company will no longer sell firearms to anyone under the age of 21.

Ed Stack, the company’s CEO and chairman, said, “… thoughts and prayers are not enough. We have tremendous respect and admiration for the students organizing and making their voices heard regarding gun violence in schools and elsewhere in our country.”

“We have heard you,” Stack continued, “The nation has heard you. We support and respect the Second Amendment, and we recognize and appreciate that the vast majority of gun owners in this country are responsible, law-abiding citizens. But we have to help solve the problem that’s in front of us.”

This, to me, is an example of corporate action for the good. It is not merely tied to corporate profits, nor solely to its shareholders.

By contrast, I learned about other aspects of corporations in reading John Higgs’ fascinating book Stranger Than We Can Imagine: Making Sense of the Twentieth Century, Soft Skull Press, 2015. Higgs discusses the concept of corporation from its historical onset as a royal charter and also as a 13th-century pope’s interpretation of monastic organization.

Pope Innocent V, born Pierre de Tarentaise, c. 1225–1276, Frankish member of the Order of Preachers, pope from January 21 to June 22, 1276.

Pope Innocent V died within five months of his election on January 21, 1276. During his papacy, though, he adroitly settled the conflict of monks taking vows of poverty while their monasteries became wealthy beyond unsaintly dreams of avarice.

Higgs writes, “To get around this headache, Pope Innocent V decided that the monasteries themselves could be considered as legal persons, and hence have some form of official existence. Crucially, he defined the term to specify that a legal person did not have a soul.”

Ever since this, corporations have displayed stunning examples of soulless behavior of one sort or another. Higgs notes several: “The efforts of tobacco companies to cover up or cast doubt on the link between smoking and lung cancer, which was first established by the English epidemiologists Austin Bradford Hill and Richard Doll in 1950, is one example. Another was the refusal of Union Carbide to clean up after the 1984 Bhopal disaster, when thousands of people were killed by poison gas in the worst industrial accident of history.”

Higgs also offers a one-sentence comment that called for added research on my part: “An example this was the light bulb, whose life expectancy was reduced from around 2,500 hours to less than 1,000 by an illegal organization known as the Phoebus Cartel, whose members included General Electric, Philips and Osram.”

According to Wikipedia, the Phoebus Cartel, founded in 1924, was originally intended to last for 30 years; the onset of European hostilities disrupted its activities in 1939. The cartel was organized to control manufacture and sale of incandescent lightbulbs by dividing up market territories and limiting bulb life. Companies involved included the British firm Associated Electrical Industries, Dutch Philips, German Osram, and U.S. General Electric.

The cartel was named for its Swiss incorporation, Phoebus S.A. Compagnie Industrielle pour le Développement de l’Éclairage, this last word, French for “lighting.” Indeed, though, this corporation was certainly without a soul, with little to do with the development of lighting unless you think in the retrograde sense.

Before Phoebus came along, the best of lightbulbs in the early 1920s were lasting around 2500 hours. By limiting this to 1000 hours and controlling markets, the cartel instantly improved its members’ bottom lines. What’s more, a 1929 table listed manufacturer fines in Swiss francs for life beyond 1000 hours.

None of this was public information. Standardization of bulbs and optimization of their design and efficiency were both cited as Phoebus benefits.

Now you tell one. ds

© Dennis Simanaitis,, 2018


  1. Michael Rubin
    March 2, 2018

    Or you can turn it around and look at corporations being punished for doing the right thing, in this case Delta Airlines. After this major Georgia employer decided to withdraw from its discount program with the NRA following the Parkland mass murders, the Georgia state legislature withdrew a tax break on jet fuel worth some $40 million.

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