Came across this tweet about the Philadelphia water spillage the other day:

So, shit happens and sometimes truly, no one is really to blame. But a lot of bad things which happen are a result of deliberate negligence or direct action. A good example is PG&E, the California power utility, which hasn’t been bothering to clear the areas around power poles and transmission poles or replace or repair old power poles. They knew this would lead to more forest fires and it did and people lost everything, including their lives, in some of those fires. PG&E had the money to do the maintenance but preferred to pay larger dividends and give more stock options to executives.

So the chemical spilled into Philadelphia’s water supply were spilled by a private company. We don’t know if negligence was the issue, but if it was, what should be the punishment?

Lately we tend to just fine companies, but that does nothing, especially as the fines are often less than the amount of money they made thru being negligent, and in any case, fines don’t remove the massive money executives already made from their actions, nor the money the owners made.

Clearly fines don’t work.

The first issue is the question of limited liability for shareholders and the use of corporations as shields for executives. There were sound reasons for limited liability for owners who really don’t control corporations, with unlimited liability people wouldn’t want to invest in companies and when primary issue of stock was a major, or the major source for creating new companies, new corporation creation would have collapsed without limited liability.

But the disadvantage of limited liability is, indeed, that corporations tend to do evil acts knowing that their owners won’t pay the full price for them, and the way corporate executives and decision-makers tend not to go to jail for actions that an individual would go to jail for (or be liable for personally in civil court) is causing huge problems.

I think we’re going to have to remove these shields, in the case of anything where a reasonable person would know that harm was likely to occur. If you make the decisions or get the benefits, you are on the hook, and you need to be on the hook for more than you made.

But there’s another question. What is the correct punishment beyond financial, because a lot of the crimes aren’t crimes where money can make the victims whole?

Perhaps with respect to polluters, for example, the executives might be made to partake of their pollution. “This is what people drank, you will drink the same.” Or “this is what people breathed for days that caused cancer, you too will breath it.”

There’s a certain eye-for-an-eye beauty to this, but I dislike doing evil to people even when they have done evil because it’s still doing evil.

I would suggest instead a simple rule. Take back all the money them made while in charge, then take enough to bankrupt them. Next, since they have shown they can’t be trusted, forbid them from any position of authority in any organization: no management or executive or board positions, no legal ability to control anything. All their possessions in the future must be controlled by an executor appointed by the government.

For truly significant harm, we might say that they are no longer allowed to work, but must subsist on whatever welfare or other provisions are provided for the indigent. Given background checks, this is often what happens to criminals: no one will hire them.

(Doing this to important people would likely lead to a significant improvement in the welfare system.)

These should probably be time gated. Ten years minimum, thirty year max, with the possibility of “parole” where they’re allowed to have a low level responsible positions, like foreman or control over their own assets while someone watches over their shoulder to see how they do.

All such rules, of course, must be done with the presumption of control. If you’re CEO or a board member, you don’t get to dodge any decision you should have known about. You don’t get to blame managers or grunts.

What sort of solution do you think would work to stop corporate malfeasance (or political)? Put it in comments.

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