04 Chapter3.txt
Chapter 3: Heads or Tails We Win, Inc.
Corporations are neither physical nor metaphysical phenomena. They are socioeconomic ploys—legally enacted game-playing—agreed upon only between overwhelmingly powerful socioeconomic individuals and by them imposed upon human society and its all unwitting members. How can little humans successfully cope with this greatest of all history's invisible Grunch of nonhuman Giants? First of all, we humans must comprehend the giants' games and game-playing equipment, rules and scoring systems. But before we can comprehend their game-playing, we must study the history and development of giants themselves.
One of my many-years-ago friends, long since deceased, was a giant, a member of the Morgan family. He said to me: "Bucky, I am very fond of you, so I am sorry to have to tell you that you will never be a success. You go around explaining in simple terms that which people have not been comprehending, when the first law of success is, 'Never make things simple when you can make them complicated.'"
So, despite his well-meaning advice, here I go explaining giants.
In addition to the B.C. David and Goliath theme, we have the A.D. 800 story of Roland (Childe Roland), legendary son of Charlemagne's sister Gilles. There are many poetical chronicles of young Roland's enfances (a very young person's heroic exploits), such as vanquishing giants—one named Ferragus and another Eaumont. From the eighth to the seventeenth century,
many variations of the story occur, published in Latin, Italian, French, and English.
Much esteemed in Italy, Roland was known there as "Orlando Furioso"—the order of the name's first two letters is reversed from ro to or—as immortalized in the A.D. 1502 poem by Ludovico Ariosto.
The first comprehensive chronicling of Roland was written in Latin by Turpin, Archbishop of Reims, before A.D. 800. Roland (or Orlando) is mentioned by Dante in his Paradiso and is the subject of songs sung at the Battle of Hastings in the Chanson de Roland (c. A.D. 1100). Shakespeare
mentions him in King Lear.
With the advent of radio and television, the children's Mother Goose-type storybooks of yesterday have been progressively abandoned. Few people today are familiar with the thousand-year-old story of the roaring of the giant as Roland approached his tower:
"Fee-fie-fo-fum/ I smell the blood of an Englishman/
Be he alive/ Or be he dead/ I'll grind his bones/ To make my bread."
Supreme horse-mounted monarchs in the days of Roland could and did award vast hunting and farming lands to their horse-mounted blood kin and military henchmen, who together hunted their lands and had them cultivated by on-foot, tithe-paying tenant farmers.
In ancient North China a new kind of giant had developed long, long before Roland's time a three-component-parts giant, i.e., the little man, with a club, mounted on a horse—who could and did overwhelm the big, onfoot, tribe-leading shepherd. This new composite giant, the horse-mounted bully, could divert to his sole advantage as much as he wanted of the life-support
productivity of the on-foot peasantry.(Pa ys = land; ped = foot = ped ant = pa ys antry = peasantry = combination of on the land and on foot = pa y of lands = pa of patriot = pa of pagans = patois = po-gan, pa-gan peasantry.)
The horse-mounted, clubwielding bully asserted—as do the twentieth-century racketeers—that he owned the land on which the shepherds were grazing their sheep or the farmers were growing their crops.
There was no way in which the shepherd could realistically contradict the bully. Each night, many of the shepherd's sheep disappeared until the shepherd agreed to "accept" the horse-mounted bully's "protection." This was the origin of "property." The most powerful amongst the leaders of gangs of horsemen became the emperor.
The emperor rewarded his henchmen with deeds to the land in proportion to the deeds at arms they performed for him.
There is no historical record of religion founders who have been so bold as to assert that God had deeded land to anyone. History shows that religious leaders have, however, frequently complied with their king's instructions to plant a cross or other symbol of God's approval of their king's
sword-accomplished vast lands-seizure and ownership-claiming.
Over thirty thousand years ago, these prehistoric horsemounted "landowners" began expanding their territory northwardly and westwardly beyond the Himalayas into Mongolia and then ever westward into Europe.
Also, starting at least thirty thousand years ago, South Pacific islanders and south and northeast continental Asians came to the West Coast of North, Central, and South America from the Orient by rafts swept along by the Japan Current. Many if not most of the rafted Southeast Asians colonized the West Coast of the Americas and islands of the east Pacific. The current then returned some of the rafters to Southeast Asia, as Thor Heyerdahl demonstrated with his raft Kon-Tiki. This circum-Pacific ovaling of the Japan Current raft-travel outlined the Polynesian world within which was spoken a commonly based language. The Polynesians became the world's water people. Polynesia comprised more than one-quarter of the planet Earth. The great West Coast mountain ranges and deserts slowed both the North and South American coastal, raft-landed colonists' eastward migrations. Landed at many North and South American coastal points from Alaska to Chile, these raft-landed Polynesians separated into many groups as they moved eastward over many routes to both North and South America, to become known as the American Indians.
As water people, the Indians assumed that the "Great Spirit" (not an anthropomorphic God) gave them fishing, hunting, and cultivating rights, but never ownership of land. Obviously, to them, only the Great Spirit could own the land. Centuries later the Indians thought they were selling the Europeans only fishing and hunting licenses, not property rights. These were water people. No sailor can think realistically of "owning" a specific area of the ever transforming oceanic waters. Many pirates tried vainly to do so.
We have, historically, two prime, oppositely directed world-encirclings, both starting about thirty thousand years ago: (1) from the Orient via water, eastbound from Southeast Asia, and (2) westbound via land from northeast Asia. Mastery of all the sea finally went to one landbased nation after another.
Millennia after the first club-swinging Oriental horseman claimed land ownership, the man on the horse westbound from the Orient to Europe became helmeted and armored in metal. Due to the horses' weight-carrying limit and the penalty of weight on the horses' speed, the most effective of the horse and armored riders was, like the present-day jockey, the wiry, strong, little man. Inspection of the European museums' armor discloses the diminutive size of the most successful knights. The main significance of what we are learning is that, to the man on foot, the horse-mounted and armed men became a new and formidable "giant."
Because the armored knight required many helping hands to mount him and maintain his horses and arms, he had to have their goodwill and support lest his helpers overwhelm him when dismounted and encased in his armor. As a consequence, the little, wiry man in horsemounted armor frequently became the champion of traveling bands of the little people. The little armored knight was more maneuverably effective than the armored giant when the latter's multifolded weight overburdened his mount.
As a special consequence of this trending, we have the nongigantic, successfully armored King Arthur's Round Table Knights, who used their mounted and armed might to rectify wrongs wrought against people by local bullies and clumsily armored, horse-mounted landowners.
Arms, armor, precious stones, skins, furs, fabrics, spices, incense, hand-looms, and other hand-tools were the principal goods traded in Roland's time. Gold, silver, and pewter served as money. Trading was accomplished on foot, on the backs of animals, or on river-borne small craft. The land of the overlord was the principal wealth.
Squads of armed horsemen could protect caravans of goods-carrying horses, camels, and elephants along with human bearers. These caravans could transport the initially culture-evolved riches of the Orient westward to the ever more westwardly advancing frontiers of humanity, where the newly powerful cultures could acquire the historically recognized appurtenances of Oriental courts of power.
A new kind of wealth-making occurs historically with the invention and development of stoutly and heavily keeled, ribbed, and planked, high-seas-keeping, deep-bellied, and, in much later times, cannon-armed sailing ships.
These great ships were built in vertical shorings. Their
keels were laid upon heavy wooden cross-ties and blocked against premature sliding.
These cross-tie "ways" led down very gently sloped banks into the harbor's deep waters. When the ships' hull was completed and watertight, the cross-tie ways were greased and the blockings mauled out from under the ship. Gravity slid the ship swiftly seaward, maintaining its vertical balance long enough to plunge it deck-side-skyward into the water.
After launching, the ship was floated progressively into a succession of wooden crane-equipped outfitting docks— the interior decks and bulkheading dock; the chain-plating dock; the mast-stepping dock; the rigging and sail-bending-on dock; the winch-, capstan-, and armaments-installing dock. Finally she sailed away to various lands where superior masts, fabrics, ropes, etc., progressively replaced the original make-do equipment. (World's best masts from the Pacific Coast of British Columbia; best rope-making fiber from Manila, in the Philippine Islands; best cotton fiber for the sails from Egypt; best teakwood for the decks from Thailand.) It took complete circumnavigation to incorporate the "best in the world" of everything to produce a "gallant" ship—one capable of around-the-world sailing.
It is probable that the first moving-line shipyard in history was established on the Chao Phraya River in Bangkok. However, the earliest now known militarily secure shipyard is to be found on the Greek island of Milos. It is in a miniature rock-walled fjord, well hidden from enemies by a deep-channeled, curved entrance. On the many rock platforms lining the fjord's walls, many shipbuilding artifacts were found. The Milos shipbuilding fjord was so well hidden that the Germans used it for their Aegean Sea submarine hideaway during World War II. (The Venus de Milo, now in the Louvre in Paris, came from Milos.)
History's next great moving-line shipyard is as yet to be found in Venice. So strategically important was the Venice shipyard that it was initially seized by Napoleon early in his campaigning.
Centuries later this progressively moved-forward-andadded-to shipbuilding pattern as yet clearly evidenced in the Venice shipyard became the prototype for all of massproduction industry's "moving lines."
The ship was, of course, a tool, but not a craft tool produced by one man. It was an industrial tool, massproducible and operable only by large numbers of highly skilled craftsmen, metalworkers, woodworkers, sailclothmakers, rope-makers, iron chain- and anchor-makers, seasoned sailors, and the coordinated muscle of "all hands." The merchant ship was a wind-energized industry, a tool that could sail around the world and carry cargoes worth many fortunes to lands not containing the materials brought by the ships, which when integrated with the home-port-occurring materials produced real wealth of increased life-support for more and more people.
The building, rigging, and arming of such vessels and the production of the materials with which to build them, as well as the production of the food and other necessities to feed and clothe all those engaged in the shipbuilding, required an effectively powerful military authority able to command the full-time commitment of the work and skills of the large numbers of humans involved. It also called for the amassing of large sums of negotiable wealth. Preferably the negotiable wealth was in the form of trade-implementing precious metals and jewels, commercially acceptable around the world.
For ages earlier the negotiable wealth had been the efficiently demonstrable products of labor and its produce, the grains and the livestock. Of the latter, the proteinamassed cattle constituted the most concentrated possible yet maneuverable realization of actual life-support wealth. Cattle were put up as collateral for the banker's loan of gold, silver, and copper coinage. When the voyage was successfully completed, the merchant-ship venturers repaid the banker and paid the banker his "interest" in the form of calves that had been interimly produced by the collateraled cattle. This was called "payment in kind"— kind being the kinder or "children" of the cattle. When bankers eliminated live cattle as collateral and dealt only in gold or silver, there were no gold coins being bred by gold coins as calves had been by cows, so interest was taken out of the capital gold by diminishing the equity of the borrower when he repaid his debt. The banker's interest was cut out of—that is, deducted from—the depositor's original "cap"-ital (head of cattle) stake.
As I made clear in Operating Manual for Spaceship Earth, (Published by E. P. Dutton, 1969.) when the farmer or cattlemen producers of "real wealth" of one hundred forward days of life support each for one hundred people—i.e., one thousand man-days of life-support—deposited their monetary specie equivalent in the bank and the banker loaned it out at 10 percent, it meant that the banker stole one hundred man-days of life support from the farmer depositor instead of providing the farmers the bank-advertised "safekeeping." The banker could hide this situation by price increase in the profits the banks made by using the depositor's real wealth units. But the depositor's dollar could buy him ever less real lifesupport units.
The safe return of the merchant venturer's ships was so unpredictable as to constitute a capital investment of high risk but also of very high potential gain—most significantly a risk whose rewarding payoff might take several "crop" seasons to realize. The voyage might take several or even many years to complete. These risks in turn could be lessened by insurance.
As a consequence of all the foregoing, a half-millennium after Roland a new and overwhelmingly greater form of invisible seagoing and land-strutting giants appeared on planet Earth. This was a legally contrived, abstract giant —"legal" because the physically uncontradictable "topsword" king decreed it was legal. Having the most favored privileges accorded real humans, the giant, abstract, corporate "man" is inventively created in 1390 in England. (The corporate "human" may have been invented in ancient Babylon to cover the potentates' voyaging venture, but we have as yet no written record of such.) "His" abstract name is the "Merchant Venturers Society." This composite man was formed by the king of England with a small group of his very powerful friends, who lorded over their king-deeded vastlands.
By royal prerogative, the venture-financing riskers could not be held liable for any losses of the venture. With limited liability, individuals might sue the company but not the human individuals who underwrote the venture If the enterprise failed and went bankrupt, its shareholders lost their ventured stake but were not to be held responsible in any way for its debts. The creditors of the company were the losers, and not the shareholders. Bankruptcy could reflect no credit stigma upon the companies' shareholders. The shareholders were held absolutely blameless for any misfortunes of their ships' crew or for damage caused by collision of their ship with another ship. If the ship and its cargo were lost, the shareholders lost their original shares, but no more. As long as the ship operated successfully, the shareholders shared its trading profits
Whether the ship was lost or not, the banker who loaned the gold for the merchant ship's trading held the life-support-producing lands and their cattle as collateral. Since many voyages ended in disaster, the banker occupied a long-time, steadily profitable position in the overall merchant venturing—and as yet does.
Naturally, the shareholder's limited-liability advantage, granted by sovereign decree, encouraged a swift expansion of such enterprises.
In 1522 Magellan's ship demonstrated that the world is not a laterally extended plane off the edge of which a ship might plunge, nor an ocean extended laterally to infinity from which there was no return. Magellan's ship's circumvoyaging proved that the Earth is a sphere—a closed system with enormous trade-monopolizing potentials. Laws of the land could not be enforced on the sea. The seagoers were outlaws—privateers or pirateers. The most powerful outlaws became the sovereigns of the ocean sea.
In 1580, Queen Elizabeth was the largest shareholder in Sir Francis Drake's merchant ship The Golden Hind. Naturally, the queen granted Drake's venture "legal" freedom from liability. After paying Elizabeth her conspicuously major share, Drake and his other shareholders each realized almost 5,000 percent profit on their risked capital.
Enthusiastic over her Golden Hind venture, in 1600 Queen Elizabeth chartered the limited-liability East India Company. This time the shareholders acquired shares in a fleet of ships, docks, and warehouses in both England and India—not shares in just one ship, as in the earlier "venturing."
Employing her sovereign power, Elizabeth limited the losses of its chartered riskers to their initial monetary or equivalent capital stakes, while continuing their right to receive their proportional profit dividends for as long as the venturing company might exist—in perpetuity.
Known later in England as "Ltd." (for "limited liability"), in France as "Societe en Commandite," in Germany as "Kommanditgesellschaft," and as "Corporation" under the U.S.A.'s "Inc." (for incorporated) status, this newborn abstract legal giant was to be treated as a human personality, empowered to do anything humans can do but also accredited to operate as an abstract, legal entity able to enter or leave any nation without a passport. As such it was able to employ millions of people and any amount of money, tools, buildings, and equipment, and to perform its giant acts anywhere about the oceanic world exclusively for the profit in perpetuity only of its shareholders.
When the Fourteenth Amendment to the U.S.A. Constitution was passed in the post-Civil War railroad-expansion days, the U.S. Supreme Court required that the individual states grant the corporation all the privileges and protection granted to human citizens. A hundred years later, in 1980, the U.S. Supreme Court ruled that a corporation had the same rights of free speech as all U.S. citizens.
To allow its corporate bodies to make a colossal new grab, Grunch has ordered its pet puppets to take over the world ocean-bottom resources. As of February 1982, the United States, Britain, France, and West Germany have reached preliminary agreement to bypass the stalled Law of the Sea Conference and proceed with development of seabed mineral resources, the Japanese foreign ministry said. Japan expressed opposition to the agreement—unconfirmed by the four other countries—and said such a program should operate under U.N. auspices. The United States and other developed countries have refused to agree to developing nations' demands that seabed development be overseen by a U.N. agency dominated by the poorer countries.
The fourteenth-, fifteenth-, and sixteenth-century rulers who instituted and empowered those abstract corporate giants were able to popularize their acts by celebrating the visual wealth of goods it brought to their country and to the political satisfaction of their many citizens. The profit to society was visibly distributed as the goods, services, museums, and public-place rarities the enterprising produced. The shareholders' dividend checks were invisibly distributed.
With the battle of Trafalgar in 1805, the risk-capital powers backing the "British Empire" became the "Sovereigns of the Seas." Until that time the high-sea venturers had carried gold and silver as their trading medium. This induced world-around high-seas piracy. The behind-thescenes masters of the British Empire then invented the annual balance of trade" as a world-around bookkeeping system which kept its gold off the seas and instead, after the year-end tallying of the trade interactions, transferred the gold from one country's London vault to another country's London vault. This withdrew the gold from the seagoing pirate's reach. However, it brought many of the pirates into the financial districts of great cities.
Naturally, shareholding in Ltd. enterprise became increasingly attractive as an investment risk, but soon the monetary size of investment required for share participation grew beyond the acquisition means of all but the wealthy. Stock-exchange brokers, for their own convenience, imposed trading only in hundred-share "lots" or "blocks," which quickly raised the equity-purchasing increments to so great a price that only the very wealthy could any longer participate in such venture-sharing. The capital games' playing-rules "kept the pikers out," the original pikers being the on-foot, pike-bearing castle guards.
In the nineteenth century the limited-liability corporate venturing began not only putting its shipyard donkey engines' steam engines in ships, but also mounting them on steel wheels on rails and powering them out of the shipyards. Thus they began railroading heavy loads inland. This initiated new mass-production industry centers at inland water-power sites. For instance, industrial venturing underwrote water-wheel-driven mass-yardage cottonmill fabric production, preferably in such low-wage-paying countries as India. The annual balance-of-trade accounting brought about many obviously inequitable economic conditions, such as, for instance, India's burlapbag-makers working for a penny a day. It was the vast profits made on burlap bags so produced which financed the early-twentieth-century expansion of the Massachusetts Institute of Technology in the U.S.A.
Such cotton and woolen fabric production-venturing was logically followed by thread and needles, pins, buttons, and small hardware mass-production moving-line ventures. With the introduction of electricity and the electricity-driven motor, industry began moving-line massproduction of dollar watches, tin cans, safety razor blades, big-city clothing-production sweatshops, then bicycles, then motor cars. In World War I, it introduced steel steamship mass-production; in World War II, transoceanic aircraft mass-production; and, in the "cold," puppet-nation-waged war (World War III), extraterrestrial travel and transport, and mass-production of invisible mass-killingry potential.
There is a fundamental evolutionary patterning in which, with each new era and phase of technology and social-economic venturing, both the tools and their products get bigger and bigger, and the numbers of humans involved multiplies. A period of doing more with more until a mammoth peak magnitude is attained which is followed by evolutionary production of ever more effective results with ever less pounds of material, ergs of energy, and seconds of time, all of which integrating synergy produces ever more comprehensively effective tools with ever smaller technological artifacts produced by ever fewer unskilled human workers—the 1895 to 1929 model "T" waxing to the 1960s Cadillac limo, then waning to the 1980 Japanese Honda.
For example, trans-ocean traffic brought into use ever more gargantuan ocean liners leading eventually to the five-day-Atlantic-crossing leviathans, such as the 81,000ton Queen Mary and her sister ship the Queen Elizabeth. Using the World War II technology's new, lightweight, high-strength, saltwater-impervious aluminum alloys in her superstructures the S.S. United States was built to carry the same number of passengers and the same amount of cargo, and to cross the Atlantic at the same speed as the Queen Mary, though weighing only forty-five thousand tons, that is, 55 percent of the weight of the Queens.
These five-day-Atlantic-crossing passenger carriers are now obsolete. In 1961, three jet airplanes outperformed the S.S. United States in carrying capacity, in hours instead of days and at less expense.
In 1980, ever lighter, swifter "liner"-type steamships are being built, but only for luxury cruise ships. For twenty years, these obsolete ocean liners have been progressively replaced by ten-to-thirty ton, one-third-of-aday-transatlantic-crossing jet aircraft.
Another example of the little-to-big-to-little evolution is manifest in the world of mathematical computing. In developing trigonometry and its solution by logarithms, thousand of monks worked for hundreds of years to produce the one-degree tables of sines, cosines, tangents, and cotangents. During the Great Depression years of 1930 to 1936 the British and German mathematicians were hired by their governments in a joint project to calculate the table of functions to a one-minute of arc exactitude. Then came the big post-World War II calculating machines, Univac et al., filling whole university buildings with thousands of thermionic tubes. Then came the tubeless transistor and computers weighing and bulking far less, until we came to printed circuits and "chips" and table-top equipment doing better work than the whole-building-filling equipment. Before all this, I myself spent two pre-calculator or -computer years carrying out the trigonometric calculations for geodesic domes. I had to do so "longhand." Then appeared seventy-five-pound electric calculating machines, followed by the pocket-size computers with which the trigonometric problems that took me two years of work became solvable in one day by one person.
This process promises within a few years to become so miniaturized and so comprehensively capable as to be the size of a hearing aid, though able to interact with all the world-around computers and able to discern how best to operate our planet, making obsolete the opinions of corporate or government executives.
As mass-capital-venturing flourished after World War I, General Foods Company absorbed many pre-World War I individually owned, independent mass-producers of canned and packaged food. General Electric acquired other successful electrical goods manufacturers. The growth of corporate venture activity was, however, at that time yet identified by unique product categories.
After World War II, "mergers and acquisitions" and outright "takeovers" agglomerated almost all successful industrial capital ventures, regardless of their class of produced goods and services. The great conglomerates found it more profitable, safer, and more credit-powerful to diversify their risking. The successful "biggies" became ever more gargantuan—for example, the Dupont chemical company's 1981 acquisition of Conoco, America's ninthlargest oil company, for $7.57 billion, to form the seventhlargest industrial corporation in the U.S. Because many of these conglomerations embraced all the national defense weaponry production, they "legally" qualified for guaranteed government "bailout" should their operation become financially "embarrassed" or debts unmeetable. The U S government's decade-ago bailout of Lockheed Aircraft or its multibillion-dollar guaranteed loan to private Chrysler Corporation (the government's military-tank producer) are the current outstanding examples.
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