The outrageous corruption of the city council in Bell, CA was in the news in 2010 and occasioned these comments on the nature of corporations
Bell: The Shock of the Familiar
We are becoming used to headlines about the latest outrages from Bell, California, a decent, working class town whose city government rivals Kabul for corruption and deceit. The latest scandal involves city managers pressuring the police department to impound automobiles in an effort to raise city revenues to cover the exorbitant salaries and pensions the city managers awarded themselves. None of this is terribly surprising, however; we’ve seen it all before. The city managers of Bell are simply mimicking the behavior of corporate executives. Cities are corporations, after all. Why should we be surprised if they behave like corporations in the private sector?
Corporations are not democratic institutions. They are autocracies. The CEO is king, beholden only to the Privy Council, i.e., the Board of Directors, that appointed him. The first task of the new CEO/king is to ensure the safety of his throne by dominating the Privy Council. He, and increasingly, she, accomplishes this by demanding and getting astronomical salaries, benefits, pensions, and perks. Once the Privy Council members accede to these outrageous demands, they are dependent on the King to protect them from the shareholder/peasants, whom they, as good aristocrats, are obliged to protect, but who will come after them with pitchforks and torches if the stock price isn’t maintained.
It is in the king’s interest to encourage that dependency. The spectacular rise in executive compensation, beyond all bounds of reason, shows the modern CEO/king’s success in dominating his Privy Council. But the cost is increasingly short-term decision-making to protect the stock price quarter to quarter that sheds jobs and scants reinvestment. Can we not recognize in this the behavior of the Bell city managers and city council, the exorbitant salaries and pensions, the slashing of payrolls and city services? How is the latest outrage, impounding cars to raise city revenues any different from the behavior of banking executives who raised revenues by spiking overdraft fees?
We cry foul when we see this kind of behavior in a municipal corporation, but accept it as a matter of course in private-sector corporations. But the analogy works in the opposite direction. The behavior of private-sector corporations is just as undemocratic, unpatriotic, wasteful of public resources, and contemptuous of the public good as the city government of Bell. The California Republican Party is running two CEOs for the top spots of Governor and Senator (i.e., in 2010). Check out the behavior of Meg Whitman and Carly Fiorina as CEOs of their respective corporations, and you will find perfect models for the behavior of the Bell city managers. The corporate sector is no model for good government. Do we really want CEOs running the public sector?