The constitution of knowledge is cross-disciplinary

This old tweet has recently been making the rounds and sparked up some discussion among my Facebook friends:

As someone with a background in both science and the humanities, I am continually exhausted by the antagonism between them.  In any given argument I usually side with humanities advocates, because STEM workers are way more likely to be dismissive dicks.  But this critique really misses the mark.

All disciplines ought to teach about how knowledge is constituted in their domain.  That’s as true for biology and math and computer science as it is for history and philosophy and art.

It’s true that some of the disciplines most likely to discuss knowledge constitution are in the humanities.  Philosophy has epistemology, for instance, and there are subfields of history and sociology focused on knowledge constitution.  But in STEM we have statistics, and subfields of psychology and computer science concerned with what is knowable and how we know it.

Regardless, I don’t agree that we can or should assign ‘knowledge constitution’ to specific fields.  All knowledge is actively constructed and we ought to be teaching people about that process even as we’re teaching the current results of the process.  Which is, I think, what Neil Degrasse Tyson is getting at.

 

A summary of David Ciepley’s “Beyond Public and Private: Toward a Political Theory of the Corporation”

I recently read David Ciepley’s “Beyond Public and Private: Toward a Political Theory of the Corporation”.  I recommend reading it yourself, but here’s my best attempt to summarize it in my own words.

Historically, we used to think of corporations as institutions that existed by the authorization of the state and for the public benefit – although the public often did not benefit in practice (*coughs* British East India Company).  In the 19th century, especially in the United States, we began to view corporations instead as part of the private sphere.  This has led to incoherent legal and political results.  Ciepley argues that, rather than viewing corporations as public or private, they ought to be considered as part of their own distinct sphere.

The first corporations were created in the image of constitutional republics, such as Dutch East India Company, whose governing board held a proportional balance of representatives from each of the Dutch provinces.  Several American States such as Massachusetts and Virginia were originally chartered as corporations.  Despite this history, there are some key distinctions.  While republics are “by, of, and for the governed”, those most subject to corporate action (workers, and secondarily customers and contractors) are not represented in its governance.

There are three main spheres of rights that make a corporation a corporation, and it’s important to note that these are all governance rights, not business rights.  After all, there are many corporations that are not businesses, and many businesses that are not corporations.  The three rights are: 1) the right to own property, make contracts, and sue and by sued, as a unitary entity, which Ciepley calls ‘contractual individuality’; 2) the right to centralized management of their property; and 3) the right to establish and enforce rules within their jurisdiction beyond the laws of the land.  Ciepley only talks about the first and third rights.

Right #1: Contractual Individuality

All corporations are granted contractual individuality by the government.  Business corporations additionally are granted by the government the right to use a joint-stock mechanism – that is, to sell shares.  The three key elements of contractual individuality are asset lock-in, entity shielding, and limited liability.

‘Asset lock-in’ refers to how investors in companies cannot directly withdraw their funds.  In a business partnership, a partner leaving the business withdraws their assets.  An investor in a corporation cannot withdraw their assets, only sell their shares to another investor.  This gives corporations an enviable stability, allowing them to specialize their assets and therefore increase their productivity.

‘Entity shielding’ means that the corporation’s assets are protected by creditors going after shareholders.  A creditor may take a shareholder’s shares, but cannot take assets from the company.  ‘Limited liability’, conversely, means that shareholders’ assets are protected by creditors going after the corporation.  Limited liability makes corporations attractive to small and/or passive investors.  Together entity shielding and limited liability are what make the trading of shares possible.  Share trading in turn is what makes investment attractive in the first place, because it allows investors to get their money back when they want – they do not have to wait until the company is dissolved.

Some people like to conceive of corporations as like fancy partnerships (a legal theory we’ll return to later) but this is incorrect.  Asset lock-in and limited liability can be approximated by partnerships, although with significant shortfalls (for instance, assets cannot be locked-in indefinitely and limited liability cannot protect against tort claims).  However partnerships cannot approximate entity shielding. To do so would require every shareholder to contract with every one of his creditors, from their bank to their plumber, against their laying claim to corporate assets.  This would be wildly impractical even if shareholders were willing to do it, but they would have an incentive not to, to allow the corporation’s credit to back up their own.

Contractual individuality means that corporations rely on the government for certain key privileges in way that other businesses do not – privileges which are foundational to their functioning and which allow them dominate the market through preferential accumulation and specialization of capital, as compared to private business.

Asset lock-in, entity shielding, and limited liability also mean that shareholders do not own a corporation.  So who owns a corporation?  No one: the corporation owns itself.  It is therefore neither publicly owned nor privately owned but corporately owned.

One of the central rationales of private property is that the owners bear the consequences of use or misuse of their property, and are therefore incentivized to use it well.  Because shareholders are alienated from corporate property, and in particular because limited liability means they bear fewer consequences, they are not well incentivized.

Neoliberal reforms which attempt to tie corporate management to shareholders have therefore only made things worse.  Shareholders more than anyone else are incentivized to take risks with a corporation.  Tying management to shareholders thus increases financial and legal risk-taking.  Shareholder also tend to be more interested in short-term gains than other associates of a corporation.  Over the last forty or so years, as these shareholder-focused reforms have been made, the average amount of time a stock is held has dropped from eight years to four months.

Right #3: Establishment and enforcement of rules

Management authority within an organization is widely assumed to derive from shareholders, who as “owners” of the corporation elect the board of directors.  But as Ciepley as shown, neither shareholders nor anyone else owns a company.  Where does management authority derive from, then?

It comes from the state, as specified in the corporate charter.  The corporate charter establishes the board of directors and then authorizes it to issue stock to shareholders – hardly the order of events you’d expect if the board’s authority derives from the shareholders.  Indeed, some corporations never issue stock at all, and some corporations issue nonvoting stock.  The current popular system of boards elected by shareholders is merely one possible way a charter can delegate control.

Ciepley refers to corporations as “franchise governments”: run on private initiative, but receiving their form and purpose from the state.  This is easy to see with municipal corporations (New York City is the largest municipal corporation in the US) but harder to see with business corporations, since we tend to view commerce as a private matter.  The increasing identification of corporations with business corporations, the increasing commercialization of the public sphere, and the elimination of the requirement that corporations be for the public benefit all go hand in hand.

(Ciepley doesn’t delve too deeply into the judicial history behind these trends but does cite a number of key court cases, starting with Dartmouth vs Woodward (1819) where the Supreme Court ruled that corporations were independent of the state and did not have to prove they were acting in the public interest.  According to Wikipedia, the eloquence of Daniel Webster’s oratory was thought to have been a deciding factor in the case.  Thanks, Daniel Webster.)

Implications of Ciepley’s theory of corporations

Ciepley argues for a return to the older view of corporations: that they are an artificial entity created by government, whose enjoyment of special legal rights requires them to act in the public benefit.

He also notes that during the mid-twentieth century, the Supreme Court began requiring that states and towns observe the core provisions of the Bill of Rights.  If municipal corporations are required to respect these rights, shouldn’t business corporations also be required?

Two alternative legal theories of corporations have dominated judicial arguments, the theory of “corporation as partnership” and the theory of “corporation as real person”.  The theory of “corporations as partnership” argues that corporations are voluntary associations of individuals and therefore the constitutional rights of the individuals extend to the corporation.  But a foundational element of the corporation is the alienation of shareholders from their property.  So why would their property rights apply?  And more generally, why should corporate partners enjoy rights such as limited liability that no other individual or group enjoys?

The theory of corporations as real person answers this question by claiming that corporations are a special, emergent entity distinct from the state.  But while some corporations may predate their current government, as do some medieval towns and as did Dartmouth College (the Dartmouth in Dartmouth vs Woodward), all corporations derive their status from the government, whereas real people have rights inalienable by their government.

Despite the flaws in these theories, they have been used to grant corporations a vast number of legal rights, for instance in Citizens United.  Lawyers for Citizens United argued both the “corporation as partnership” and “corporation as real person” perspective, even though the theories are contradictory.  If corporations are partnerships are reducible to their members, why should it get extra rights?  If corporations have emergent properties distinct from their members, why should it claim their constitutional rights?

Conclusion

There’s actually nothing worth summarizing in the conclusion, but I felt bad just stopping abruptly.

tl;dr: corporations are not private concerns, shareholders do not own them, we should go back to requiring corporations act in the public benefit, there’s no rights-based reason for shareholders to have any influence on the governance of a corporation, the rights granted to corporations based on these conceptually incoherent theories are bad for the economy, bad for society, and really rather unfair to actual private businesses, and someone should rewrite The Devil and Daniel Webster to be about Darmouth vs Woodward

Tolerating Uncertainty

The business of thinking is like the veil of Penelope: it undoes every morning what it had finished the night before.

Hannah Arendt, Responsibility and Judgment, p. 166

I’m an anxious sort of person.

That’s a glib way of saying that I have an anxiety disorder.  I’m afraid a lot of the time.  I have practical fears, like heights and driving and cardiovascular disease.  I have existential fears, like global warming and the descent of American society into fascism.  And I have social fears, like public speaking and calling people on the phone and putting myself out there when I want something or someone.

Every single person feels anxiety sometimes.  What makes it a disorder is that it interferes with your life.  My disorder is not a bad one – anxiety is ever-present in my life but I largely work around it.  I hate flying and driving, for instance.  If I could take the train everywhere I would, but I can’t, so I fly and I drive and my nervous system freaks out but I’m okay.  Sometimes I wake up in the morning and I’m just anxious for no damn reason, and it lasts all day, or all week, and there’s nothing I can do.  And that’s hard but it’s also reassuring in its own way.  It’s a reminder that anxiety often can’t be reasoned with.  At a certain point, all you can do is acknowledge what’s happening.  “My nervous system is freaking out, but I’m okay.”

What I’m trying to say here is that my relationship to anxiety is very personal. I think that’s true for most people. You can reason about fear but there’s a part of it that’s inescapably embodied. And uncertainty exacerbates fear.  I’d rather get a single painful shock I knew was coming than sit around waiting for a shock that might come.  It’s less terrifying to ask out a person you know will say no than someone who might say no.  So my relationship to uncertainty is very personal too.  To tolerate uncertainty is not just an intellectual choice or an emotional choice, but a physical choice.

The Romantic poet John Keats in 1817 coined the term negative capability:

[At once it struck me what quality went to form a Man of Achievement, especially in Literature, and which Shakespeare possessed so enormously—I mean Negative Capability, that is, when a man is capable of being in uncertainties, mysteries, doubts, without any irritable reaching after fact and reason—Coleridge, for instance, would let go by a fine isolated verisimilitude caught from the Penetralium of mystery, from being incapable of remaining content with half-knowledge.

Part of why negative capability is so rare and difficult to cultivate is because uncertainty provokes for so many of us a physical fear.  So we try to escape the fear by leaving the situation, or reasoning ourselves out of it, or blaming something else for the fear, or trying to grit our way through it.  Negative capability is the decision to sit with that fear, to say, “I’m afraid, but I’m okay”.  And when you approach uncertainty with that kind of acceptance, it lets you view the world – and the uncertain issue or object – in a different way.

This way of approaching the world is not something Keats invented, of course.  From Hannah Arendt:

It is in [thinking’s] nature to undo, unfreeze as it were, what language, the medium of thinking, has frozen into thought – words (concepts, sentences, definitions, doctrines), whose “weaknesses” and inflexibility Plato denounces so splendidly in the Seventh Letter.  The consequence of this peculiarity is that thinking inevitably has a destructive, undermining effect on all established criteria, values, measurements for good and evil, in short on those customs and rules of conduct we treat of in morals and ethics.  These frozen thoughts, Socrates seems to say, come so handy you can use them in your sleep; but if the wind of thinking, which I shall now arouse in you, has roused you from your sleep and made you fully awake and alive, then you will see that you have nothing in your hand but perplexities, and the most we can do with them is share them with each other.

Hannah Arendt, Responsibility and Judgment, p. 177

In other words, Socrates sought to build a community of people with negative capability, people who could hold perplexities in their hands.

(Brief aside: I can’t help bringing up one of my favorite characters, Chidi Anagonye, again.  Chidi is a moral philosopher with severe anxiety and essentially zero negative capability, who I think would benefit enormously from having Socrates as a mentor.  Maybe I will write fanfiction about this.)

Negative capability is vital in so many endeavors:

It’s vital in scientific research, since you must tolerate uncertainty about how the world works and whether the hypotheses and theories you’re relying on are true.

It’s vital in technological innovation, since you must tolerate uncertainty about whether your inventions will work and what impact they’ll have on the world.

It’s vital in political coalition-building, since you must tolerate uncertainty about how to compromise and whose perspectives to favor.

And of course it’s vital in philosophy and art, as Socrates and John Keats would agree.

Some people argue that an inability to tolerate uncertainty predisposes people to authoritarianism and fascism.  Others link it to conservatism:

[R]ather than make an unvarnished demand for freedom to oppress he is more apt to present himself as the defender of certain values. It is not in his own name that he is fighting, but rather in the name of civilization, of institutions, of monuments, and of virtues which realize objectively the situation which he intends to maintain; he declares that all these things are beautiful and good in themselves; he defends a past which has assumed the icy dignity of being against an uncertain future whose values have not yet been won; this is what is well expressed by the label “conservative.”

Simone de Beauvoir, The Ethics of Ambiguity, p. 39.

There has not been very much research on the links between uncertainty tolerance and authoritarianism or conservatism.  There has not been much research on uncertainty tolerance as a whole.

These are, fittingly, subjects for which we must tolerate a great deal of uncertainty.  So let us do as Socrates would do, and share our perplexities with each other.