In 2010, the oil rig Deepwater Horizon suffered a major explosion and began gushing toxic chemicals into the Gulf of Mexico. Government investigations found that neglect, reckless cost-reduction and lack of oversight contributed to the disaster. In the face of economic and ecological devastation, BP began paying tens of billions of dollars in damages. BP also started an aggressive PR campaign to repair its public image. Today, it is a profitable, stable company, and continues extraction around the world. The CEO of BP in 2010 is now the CEO of another extraction company.
In 2007, risky speculation on unstable investments led to the near-collapse of several major American banks, dragging down the global economy. The federal government “bailed out” the most powerful private financial institutions in the world at the cost of hundreds of billions of dollars. The bailout may have begun the daunting task of stabilizing the economy, but millions of Americans lost their jobs, homes and personal security along the way. The executives of the defaulting banks continue to receive titanic salaries today.
In 2016, Facebook’s administrators allowed shady foreign and domestic agents to spread misinformation on their social media platforms. An already contentious election saw disastrous consequences. When confronted by legislators, Facebook’s officers equivocate. This story is still developing, but every month more misconduct is revealed. The whole truth is not yet out, but Mark Zuckerberg and his employees have not been straightforward or vigilant. Zuckerberg has faced no significant censure from American lawmakers, though European legislatures are making brave policy efforts.
This narrative is not new. It is centuries old, growing more prominent as government officials are captured in the orbit of powerful corporations. It combines the deaths of progressivism, of a government of the people and of humanity itself. Like in the Gilded Age of the late 1800s, corporations are not feeling the pain for their misdeeds. Our government is not serving and protecting its citizens.
To preserve any semblance of justice, this must change.
Consider Iceland. After its three largest banks collapsed in the wake of the 2008 global recession, tens of millions of euros were scattered by roaring waves of economic instability. For a small island nation, this was a staggering loss. Unlike in the United States, though, some form of justice was exacted. In 2012, executives from those banks were convicted of fraud and sent to jail for their roles in the crash.
There is precedent for the punishment of malicious or negligent action by executives of powerful American companies. In the brief trust-busting and muckraking period in the early 20th century, American governments cracked down on powerful corporations. In the early days of the American republic, corporations had to gain legislative approval before selling shares, and were quite limited in scope. These measures might seem onerous to the modern libertarian, but the objective of the progressives of the day was not continued bursts of economic growth, but rather a compassionate and measured relationship between industry and the people.
The Gilded Age preceded the Progressive Era, and the age saw many of the same extremities that surface today. Corporations used violence and coercion to break up labor union strikes. Vast monopolies controlled communication, transportation and government policy. It took several years of economic disaster starting in 1893 to jolt the lower classes awake and jump-start reform.
Why do recent missteps and crimes by corporations escape justice? The modern examples I have recounted resulted in fines and scattered firings, but executives continued to collect hefty bonuses and salaries. Often the American public pick up the slack through bailouts. By any measure, this is not capitalism, for companies do not suffer for their otherwise fatal mistakes. This is not socialism, for the aim of government action is not the common well-being. No one except the billionaires benefitting from government largesse have reason to be content.
Let some changes be made. If a company goes under, it should not be bailed out, but allowed to die. An executive who breaks the law or causes wanton misfortune should be thrown in jail. Jobs and stability may be lost in the short term, but the economy will be stronger tomorrow if the wheat is separated from the chaff today. Fundamental change is never simple, but dodging complex challenges brought humanity the dozen crises that threaten our collective good.
The suggestions I propose sound radical, but all have precedent during more enlightened periods and in more civilized regions. The American public has forgotten how to hold corporate feet to the fire.
Steve Kerby is a fourth-year student studying astronomy and physics. When he grows up, he wants to be older.