Multinational Monitor

NOV/DEC 2007
VOL 29 No. 5


Neither Honest Nor Trustworthy: The 10 Worst Corporations of 2007
by Russell Mokhiber and Robert Weissman

High Flyers and the Grounding of Equality
by Samuel Bollier

The Pickens Water Play
by Andrew Wheat

Sin and Society Part III
by Edward Alsworth Ross


How Wall Street's Political Triumph Led to Economic Crisis
an interview with Robert Kuttner

How Eliminating School Fees Helped 2 Million Kenyan Kids Go to School
an interview with oil Mary Njoroge


Behind the Lines

Cops on the Corporate Crime Beat

The Front
Norway Nixes World Bank | Food Prices Boil Over

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News


Sin and Society

by Edward Alsworth Ross
Part III of a 3 Part Series

Editor's Note: 2007 marks the 100-year anniversary of the publication of a remarkable book-length essay, Sin and Society: An Analysis of Latter-Day Iniquity, by the sociologist Edward Alsworth Ross. Ross was the leading sociologist of the early 20th century United States, but Sin and Society was written for a lay audience.

The book is noteworthy for identifying the ways in which the industrial economy had transformed the capacity to do harm to others. The leaders of large corporations gained the power to injure and cheat people on a scale that the most heinous street criminal could not begin to match. But conventional morality had not adjusted to these changed circumstances - while the rightful disapprobation was directed at street criminals, the newly emerging class of corporate criminals and wrongdoers managed to brand themselves as respectable leaders of society.

This situation, of course, continues today - making Ross's insights all the more worth revisiting. Multinational Monitor is therefore commemorating the hundredth anniversary of Sin and Society by serializing major excerpts from the essay. Below follows the last of three parts.

Chapter 5: Sinning by Syndicate

Those who contend that men are growing better, and those who insist that matters are growing worse, may both be right. "Look at the amelioration in the lot of women, of children, of blacks, of convicts, of defectives," flute the apologists. "Never were punishments more humane, manners milder, amusements cleaner, gifts larger, the rights of the weak better protected, the lower creatures more considered." "But mark the ruthlessness of industry, the ferocity of business, the friction of classes, the stench of politics," rasp the critics. "Never in our time were children so exploited, workers so driven, consumers so poisoned, passengers so mangled, investors so fleeced, public servants so tempted." The key to the paradox is that while men are improving in their personal relations, the control of industry and business is becoming impersonal.

Take the face-to-face element out of a relation, and any lurking devil in it comes to the surface. … It is noteworthy that the strife between employer and employee was never so bitter as it has become since corporations came to be the great employers. So, also, the tension between the railroads and the people has grown with the merging of lines locally owned into huge systems controlled by remote investors in the East or in Europe.

There is nothing like distance to disinfect dividends. Therefore the moral character of the stockholders makes very little difference in the conduct of the affairs of the corporation. Christian or heathen, native or alien, blue blood or plebeian, rich or poor, they all sanction much the same thing, and that is, the policy that promises the biggest dividends in the long run. To the directors their virtual mandate is, "Get results!" The directors pass this mandate to the officers. The officers pass it along to the heads of departments, and these send it on down the line. …

Nevertheless, if the corporate owner is free from the weaknesses of the individual, it escapes also his wholesome limitations. It feels not the restraints that conscience and public sentiment lay on the business man. It fears the law no more, and public indignation far less, than does the individual. You can hiss the bad man, egg him, lampoon him, caricature him, ostracize him and his. Not so with the bad corporation. The corporation, moreover, is not in dread of hell fire. You cannot Christianize it. You may convert its stockholders, animate them with patriotism or public spirit or love of social service; but this will have little or no effect on the tenor of their corporation. In short, it is an entity that transmits the greed of investors, but not their conscience; that returns them profits, but not unpopularity. …


Thanks to the magic of limited liability, every year finds a greater distance between the corporate business and its absentee owners. Every year sees these owners more numerous, more scattered, more dominated by the big insiders. Every year sees savings banks, trust companies and insurance companies coming between the corporate management and the millions who furnish the money, thereby making it harder for their conscience to reach and humanize that management. Moreover, the Big Men's practice of watering a paying stock and unloading the infusion upon the investing public is marvelously potent in banishing humanity and decency from the corporation's treatment of its labor, its patrons or the public authorities. …

These developments tend to bring to the headship of certain big businesses - especially public-service enterprises - men akin to the steward on a feudal estate or the agent of an Irish landlord. With growing remoteness and anonymity of ownership, the railroad, gas or traction manager who aims to develop his properties, to prosper through the prosperity of the community instead of at its expense, to respect local sentiment, the rights of others and the law of the land, is dropped. Quietly, but relentlessly, the popular man of local antecedents and attachments, who calls his men "Bill" or "Jim," is discarded for the imported man with "nerve," who "does things," who "gets results" - no matter how. The owners fête and cheer the "efficient" railroad president who has increased the net earnings "520 percent in eight years," heedless that he lets the trestles rot till cars full of sleeping passengers drop through them, overworks his men till people are hurled to destruction in daily smash-ups, and denies sidings for the swelling traffic till his trainmen pay Death a heavier toll than soldiers in the field.

Now, the stockholders for whom all these iniquitous things are done do not consciously stand for them. They do not will that children should be worn out, workmen maimed, consumers defrauded, the ballot polluted, or public men debauched. They seem to demand such conduct only because they fail to realize what they are doing when they exact the utmost penny. However harmless their intentions, their clamor for fat dividends inevitably throws the management of quasi-public - and some other - businesses into the hands of the domineering-arrogant or the suave-unscrupulous type. The manager represents just one side of the shareholders, namely, their avarice. In other respects he is no more typical of them than the company doctor is typical of physicians or the corporation attorney is typical of lawyers. …

Now, the corporation cannot mend itself. More and more it is impersonal and non-moral. More and more the far-away manager is rated as a profit conveyer, and the conduit with the bigger flow is always preferred. It has become a machine, and Mammon is its master. Reform, therefore, will not come from the inside. Those who supply the capital cannot mould it to their better will. But they can change its spirit if they will join with their fellow citizens in restraining the corporation by public opinion and by statute. If the reaction of organized society upon the Gradgrind type of manager is so severe that he cannot make so much money for his stockholders as a more reasonable and representative type, he will give way to the better man, and one cause of the needless alienation of classes will be removed.


The savage beats the stone he has stumbled over without inquiring who left the stone in his way. Early law punishes brutes for the harm they do, and the domestic animal that hurts a human being is deodand. Law now looks farther back, but the public in its short-sightedness is like a stricken animal biting at the arrow in its flank instead of charging on the hunter.

In view of the pressure they are under, what folly to mob the spade men who set telephone poles where they have no right to be, rather than the manager in a downtown office who gives these men their orders! Why execrate the dozing operator or the forgetful engineer, rather than the superiors who exact the long hours that incapacitate for duty? Why lynch the motorman for running over the baby, when he is on a schedule that obliges him to violate the municipal speed ordinance or lose his job? When powder firms or armor-plate companies are caught giving aid to the enemies of their country by furnishing bad plates or poor powder, what childishness to be satisfied when the employees who plugged the blow-holes or "switched the samples" are dismissed with a great show of virtuous indignation, while the instigators go unpunished!

There is no work so dirty or dangerous but that it will attract volunteers pleading wife and babes to support. An economic constraint, more or less harsh, binds the ordinary underlings of a corporation and obliges us, in quest of the one to blame or punish, to turn to "the men higher up." Nor is it easy to find the right place to stop. Whom shall we blame when orders for automatic signals put in by superintendents of railroads on which heart-rending collisions have occurred, have been turned down by the Wall Street owners? The company claim-adjuster who, by playing on the ignorance, fears and necessities of the injured, "bluffs" them out of their lawful indemnity, insists with truth that, if he did not cheat the victims, another man with fewer qualms would be given his place. The attorney who fights all claims, just as well as unjust, to the court of last resort in order to intimidate claimants, pleads that his corporation will wear them out anyway, and he might as well hold the job as someone else.

Ought we, indeed, to flay the legislator who, under pain of losing the renomination, votes as he is told on corporation matters, or the bureau chief who winks at crooked land entries because he feels at the back of his neck the chill of the axe? He is no hero, to be sure, who eats dirt in order to keep his berth; but if he refuses he will become a martyr, and it is doubtful if we have the right to require martyrdom of anybody. The society that allows its enemies to run the party conventions, or lets unclean hands wield the official axe, has only itself to blame for what follows. …

In the corporation the men who give orders, but do not take them, are the directors. They enjoy economic freedom. If their scruples cost them a reelection, their livelihood is not jeopardized. In the will of these men lies the fountainhead of righteousness or iniquity in the policies of the corporation. Here is the moral laboratory where the lust of an additional quarter of a percent of dividend, on the part of men already comfortable in goods, is mysteriously transmuted into deeds of wrong and lawlessness by remote, obscure employees in terror of losing their livelihood.


In enforcing the rules of the game the chief problem is how to restrain corporations. The threat to withdraw the charter alarms no one, for corporations know they are here to stay. Fine the law-breaking officers, and the hoard of directors by indemnifying them encourages them to do it again. Fine the corporation, and, if its sinning is lucrative, it heeds the fine no more than a flea-bite. Never will the brake of the law grip these slippery wheels until prison doors yawn for the convicted officers of lawless corporations. Even then you cannot fasten upon the officers legal responsibility for much of the iniquity they instigate. …

Until the courts recast their definitions of legal evidence and legal responsibility, much of the control of corporations must devolve upon some agent free from the pedantries and Byzantism of the law. Public opinion, however, is impotent so long as it allows itself to be kept guessing which shell the pea is under, whether the accountability is with the foreman, or the local manager, or the general manager, or the president, or the directors. How easily the general wrath is lost in this maze! Public indignation meets a cuirass of divided responsibility that scatters a shock which would have stretched iniquity prone. Till the law lifted its mailed fist, how futile were the agitations against grade crossings, link couplers and fenderless cars! Instead of playing hide-and-seek in the intricacies of the corporate structure, public opinion should strike right for the top. Let it mark the tactics of the Philadelphia mothers who, after vain appeal to underlings to put in a gate at a railroad crossing their children must make on the way to school, stormed the office of the president of the road.

The directors of a company ought to be individually accountable for every case of misconduct of which the company receives the benefit, for every preventable deficiency or abuse that regularly goes on in the course of the business. Hold them blameless if they prove the inefficiency or disobedience of underlings, but not if they plead ignorance. Consider the salutary side-effects of such severity. When an avalanche of wrath hangs over the head of the director of a sinning corporation, no one will accept a directorship who is not prepared to give a good deal of time and serious attention to its business. Strict accountability will send flying the figurehead directors who, when the misdeeds of their protégés come to light, protest they "didn't know." It will bar buccaneering insiders from using a group of eminent dummies as unwitting decoys for the confiding investor or policy holder. It will break up the game of operating a brigand public-service company (owned by some distant "syndicate") from behind a board of respectable local "directors" without a shred of power. …

Make it vain for a director to plead that he opposed the wrong sanctioned by the majority of his colleagues. If he will keep his skirts clear, let him resign the moment he is not ready to stand for every policy of his board. In the board of directors, as in the cabinet of parliamentary countries, the principle of joint responsibility should hold. It ought to be as inevitable for the entire board of directors of a railroad company caught systematically stealing mineral lands or oppressing coal operators along its line, to resign, as now it is a matter of course for college trustees to resign when they have been caught unloading bad securities on to the college funds. …

Corporations are necessary, yet, through nobody's fault, they tend to become soulless and lawless. By all means let them reap where they have sown. But why let them declare dividends not only on their capital, but also on their power to starve out labor, to wear out litigants, to beat down small competitors, to master the market, to evade taxes, to get the free use of public property? Nothing but the curb of organized society can confine them to their own grist and keep them from grinding into dividends the stamina of children, the health of women, the lives of men, the purity of the ballot, the honor of public servants and the supremacy of the laws. …

Chapter 6: The Rules of the Game


Many spiritual leaders imagine that the Kingdom of Heaven comes simply by regenerating souls, that as man after man turns his face upward society is duly uplifted. It would follow that the quiet work on individuals does not need to be supplemented by the recourse to law or public opinion, and that the Puritan's endeavor to establish righteousness is superfluous.

This may have been true before competition became lord of life, but now that the few lead off while the rest must follow suit, much depends on giving the lead to the good man rather than the bad man. You may add to the number of good men, but, without enforced rules, it will be impossible for them to stay in the higher posts and callings. For the social trend denies most men a free hand. More and more the chief vocations come under the baton of competition, so that one may not maintain one's self in them at all unless one feels at liberty to do as his rivals are permitted to do. Those in the same line must move in lock step, and the pace is set by the meanest man who is allowed to continue in the business. The department store that pays its girls living wages and closes at six can hardly live in the same town with one that pays four dollars a week and closes at nine. If the price of glass jars is fixed by the manufacturer who overdrives little boys, every competitor must, unless he possesses some offsetting advantage, conform to this practice. Leave the business he may, change it he cannot. If one dealer in foods successfully adulterates, his fellows must follow suit or else seek their patrons among the few who prefer a brand because it is dear. As for the dispenser of pure drugs, there is no place for him until the law steps in to standardize quality. The one shipper who extorts an illegal rate obliges all other shippers in his line to break the law or be snuffed out. So long as there are able attorneys willing to handle the corporation work just as it comes, clean or dirty, the lawyer who insists on picking and choosing must mildew in the basement of his profession. If the lavish use of money is countenanced in politics, no poor man can win without truckling to the contributors of campaign funds.

It is chiefly the directive groups in the social scale that are thus swayed by the twentieth man. The privates in the industrial army do not move in lock step, for they keep step with their officer; their performance is standardized for them by those who give out the work. Farmers are independent, and on the soil a man may still live up to his ideals. In the learned professions there are tricks, to be sure, but the quack cannot set the pace. But in business, finance and politics it is more and more the case that all who maintain themselves therein must stand on about the same footing. Without pressure from outside, the moral level of practice will be low, and the good man will have to stagnate or get out. The rule of money in politics means "Wear the collar or quit." The control of the press by financial interests is a placard, "Stubborn truth-tellers not wanted." The reckless rivalry among life insurance companies advertises, "No room for the conservative manager." If it becomes common for dealers to give "commissions" to servants or purchasing agents, the sign might as well be hung out, "No one who will not bribe need apply."

How vain, then, to expect to better conditions simply by adding to the number of good men! The converts would be obliged to join the multitudes who have their work cut out for them. They might, of course, hew coal or lay bricks or drive oxen. But business, finance, and politics and journalism - so potent in the allotment of wealth and of welfare, so authoritative in impressing standards on the rising generation - would become no whit better. There are already enough granite men to man the high posts; but, till the ways be cleared for them, they accumulate on the lower levels where, having no free hand, they feel no moral responsibility. By themselves they can get no foothold at the strategic points where conditions are made, where the weal or woe of thousands is determined. Without aid they cannot maintain themselves in these competitive fields. It is, therefore, the first duty of society to establish the righteous by lifting the plane of competition.

Pure food laws mean an open door for honest men in the purveying business. An efficient state insurance department means a chance for the "old-fashioned" manager. A stricter ethical code for the legal profession would enable certain briefless lawyers to forge to the front. Child-labor restriction is a godsend to the humane manufacturer. Outlawing the sweaters' dens may throw the ready-made clothing trade into the hands of reputable men. Already in banking we see a business, once the happy hunting ground of swindlers, which, by regulation, has come to be a field for honorable men.

It is easy to see what 50 years of public condemnation of liquor-selling has done in driving good men out of it. It is easy to foresee what a lively public appreciation and support of truth-telling newspapers, of plain-spoken preachers, of fearless scholars, of civic-minded lawyers, of conscientious merchants, of humane manufacturers, of upright officials, of zealous prosecutors, would do to populate these walks with good men.

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