One hundred and fifty years ago, corporations were a fairly minor part of the American business landscape. Today, as the landmark documentary The Corporation illustrates, (see clip above), the corporation has become the dominant social institution of the modern era worldwide. Like the Church during the Middle Ages, or the monarchy during the Enlightenment, the corporation is the pervasive organizing institution of the 21rst Century. You can’t escape it even if you want to.

Corporations are powerful, profitable, and they kill jobs in the same way that sharks kill fish.

They have to do it. It’s part of their nature.

Inevitably, the corporate model has to subvert the nature and value of work, and reduce society to two basic tiers: The incredibly rich, and everyone else.

How the Corporate Model Works

During the first 100 years of the rise of the corporation, lots of jobs were created as corporations appropriated resources or created services that previously did not exist. The ‘up’ side to the corporate model is that it does encourage competition and innovation. By privatizing institutions and resources that were once part of the public domain, corporatization briefly creates new opportunities for paid work.

Central to the corporate model however is the idea that profit must increase on an annual basis ad infinitum. Simple common sense would indicate that this is scarcely possible, but because corporations are set up to efficiently strive for this goal year after year, common sense doesn’t really apply.

Corporations may be legally lumped in the same category as human beings, but the do not function like human beings at all, though they try hard to portray themselves as humane. They cannot think and they certainly cannot feel. They are more like machines or like ruthlessly efficient computer programs.

Which brings me to the ‘down’ side of the corporate model, which is this:

When profit-added trumps value-added the result is always destruction of products, services, and jobs and the concentration of wealth into a very few hands. 

The ultimate corporate success story ALWAYS ends with a huge multinational company that generates enormous profits by providing no product or service at all and hiring the fewest number of employees possible to not provide it.

We saw that success story in action from 2003 through 2008, as deregulated banking and insurance created an enormous bubble out of thin air and a bit of real estate, using only a handful of brokers located on the Eastern coast of the United States.

My Axe and Why I Keep Grinding It

I was working in the financial industry during that very time period 2003-2008, and basically, middle management did not exist by that era. I worked the front lines (natch—why else would I be writing on the internets today?) with lots of other plebes who were encouraged to practice an ‘up or out’ philosophy of corporate ladder climbing. Two years on the bottom, then out if you weren’t promoted, or—at the big bank where I worked for two years—one year on the bottom and then out if you didn’t excel.

The problem was, by the middle of the first decade of the 21st century, middle management had been all but gutted by the corporate downsizing madness of the 1990s. It wasn’t that middle tier jobs provided no value, but rather that they couldn’t be shown to directly generate profit. So upper management simply eliminated them by the thousands. ‘Up or out’ really just meant ‘out’. There was no ‘up’.

During the eight years I spent chained to my cubicle I watched a similar pressure on the bottom tier develop and be systematically applied, and then watched that pressure increase annually. At first we plebes were just reminded of the ‘up or out’ philosophy constantly, (even though there was no ‘up’ to move into), but soon that was not enough. Gradually (OK, not that gradually!) the idea that wage earners at the bottom should have to generate ‘x’ amount of profit each became first popular and then standard.

Suddenly it wasn’t enough to simply do your job well in order to earn your wages. Now you had to be able to show that you personally generated ‘x’ amount of quanifiable profit for the corporation. It didn’t take a Harvard economist or a psychic to see where this was going.

Dollar amounts were soon attached to the already insane productivity demands (one corporation I worked for allowed an average daily bathroom time of 3 minutes or less and did bring it up at your weekly review if you exceeded that allowance), and other means of quantifying each individual employee’s contribution to profit were also introduced.

How many daily referrals were generated? How many minutes did the employee spend speaking to a customer without generating a sale? (This, even though I worked in customer service.) What was the ratio of sales to nonsales interactions? How many contests were won for most sales of this or that, the least amount of time peeing on the clock, most leads generated, and so forth.

Once profit was tied directly to individual performance, it was only natural to start turning the screws.

The more profit you could generate the more you were expected to generate. Coasting was not an option. Employees who did not continuously exceed the goals set for them were terminated. For instance, I began working at the bank with a monthly sales goal of $75,000 and ended with a monthly sales goal of $1 million—and I worked in the customer service department—the department people reached when they couldn’t access their account, were overdrawn, or had some other legitimate complaint.

At the insurance corporation where I worked before that, we were told to ‘own the problem’ when a customer called to complain. In other words, we were supposed to fix their problem so they would not keep calling back. If we actually attempted to do that however, we were reprimanded, because it usually took too long.

By the time I left that corporation (five years—three years past the ‘up or out’ deadline) the requirements had shifted to generating profit dollars out of customer service directly by turning it into disguised sales. In other words, sales goals were added in a non-sales department.

At the bank, the ‘own the problem’ credo was quickly jettisoned in favor of, “If they can’t buy something then just get them off the phone.” I was told this directly by two supervisors. At the insurance corporation I had precisely seven minutes to not solve my caller’s problems and get them to upgrade. At the bank I had to do that within three minutes.

The Corporate Model and the Internet

I quit doing this work in 2008 when I collapsed at my cublcle from an apparent heart attack. After eight years and excellent performance I was making $12/hr and still had not found a position to move ‘up’ into. I was #10 out of 300 employees at the first corporation, but still, not good enough to make it in my two years of ‘up or out’. So I decided, time to go while I still can walk out on my own two feet.

Since then, I’ve noticed that most corporations have started using staffing agencies to fill these slots, and that many of the staffing agencies farm out the work as temporary or as subcontract assignments so that ‘employees’ have to answer calls out of their own homes, use their own computer and phone equipment, for even lower wages than the jobs I had and with stricter sales requirements, no benefits, no company withholding, and a 1099 at the end of the year instead of a W-2.

This saves corporations huge amounts of money on benefits, unemployment insurance, and so forth, and increases profitability substantially without adding any value whatsoever.

Ideally, (from a corporate standpoint) we will eventually come to a place at which people have to pay to do this work, (and possibly pay to not do this work), and also pay for either 1) buying the service or product which has actually stopped being either, or 2) pay for not buying the now non-existent service or product.

I notice that in recent months the corporate model has begun to make intrusions on the kind of work I do today as well: Freelance writing.

I used to write for mostly private clients who, like me, had set up their own little home-based cottage industries online. I wrote copy for their landing pages, wrote product descriptions, wrote ‘About Us’ pages and short articles for their blogs, and content for them to post to article directories to promote their sites.

That work has largely dried up, and what is left of it is exceedingly poorly paid and unreliable. Much of it has instead been recently taken over by corporate ‘content farms’—companies like Demand Studios and Break Studios that focus on what is most salable in web content, purchase it at low but (for now) competitive rates from freelancers like me, then sell it at a ridiculous profit to really major concerns like The New York Times and such. They get the lion’s share of the profit and we get, well, we get four cents a word instead of one.

Now, this corporate model is also systematically shutting down sites where freelancers used to be able to make money on their own. E-How was recently taken over by Demand Studios. If you want to write for E-How today, you have to apply to DS just like you have to apply to any entry level job, be approved, follow their narrow and relentlessly productive editorial guidelines, and start pumping out your ‘content’ through them. You only get paid for the minutes you actually produce work, and you’d better work fast to make it worth your while.

Sound familiar?

Ning has also recently shifted to an all-paying model after becoming a brief Mecca for individuals who wanted to establish small virtual communities. No money in that. Or, not enough for Ning. 

The point is, the profit is never large enough in the corporate model. That is built right into the model.

Now that corporations have learned that they can get people to work for almost nothing out of their own homes, why on earth would they ever create jobs again? What’s even more troubling though, is the loss of real products that actually last and do what they were constructed to do, real services that actually help people and treat them like they matter, and real thought and analysis and creativity—which is something that writing used to provide and that people tended to value.

I do have some ideas on how this will all play out.

More on that next time.

In the meantime, if you think you are having trouble finding real work, it’s probably NOT your imagination. It’s just the corporate model doing what it does, and doing it very, very well.