Thursday, August 30, 2012

Leviathan, the invisible creature no one can control

In Japan, there is a professor in Economics (and probably Political Philosophy as well), known to be a self-proclaimed Neoliberalist or Libertarian, who said there is not such an individual called corporation. According to his argument, taxing on a corporation only means taxing a group of individuals. Therefore, the weight of the tax called corporation tax is eventually levied on not only the executive members and the managers (Authority/Meritocrats) but also the labourers (Commoners).

I agree with him by means of the fact that the corporation tax cost both Authority/Meritocrats but also Commoners/Labourers. Nonetheless, I disagree with him on contradicting the existence of something called corporation. This Japanese professor must not be familiar with sociology and ethics (political philosophy). When we study sociology and ethics, we eventually know that there is something which exists like an invisible creature. This invisible creature is controlled by neither Authority/Meritocrats nor Commoners/Labourers. It is also neither created nor regulated by Law&Legislation. Nobody can create nor control over this invisible creature, and this invisible creature certainly influences us.

An entrepreneur establishes his/her business, and then employs majority citizens (Commoners) as the labour force. Then, there is the Law&Legislation imposed by the third party such as government, court, and any public institute. When these three factors, "Authority/Meritocrats", "Commoners/Labourers", and "Law&Legislation" interact each other, there are not only those which any of these three can decide and control but also those which nobody can either decide or control. When they form an organisation, an uncontrollable invisible factor is born and starts controlling not only the member of this organisation but also the outsiders.

Let's take a look of this graph:

There are three spheres of "Cannot (Decide not Control)": "Authority/Meritocrats cannot", "Commoners/Labourers cannot", and "Law&Legislation cannot".

The top blue sphere is the area that "Commoners/Labourers cannot" so that both Authority/Meritocrats and Law&Legislation can. This is the area both "Authority/Meritocrats and Law&Legislation influence simultaneously. This area represents the power Law&Legislature gives to Authority/Meritocrats such as economic and status privilege, the right to make a final decision, and how to measure the merit of individuals (Meritocracy).

The bottom left red sphere is the area that "Authority/Meritocrats cannot" so that Commoners/Labourers and Law&Legislation can. This is the area both Commoners/Labourers and Law&Legislation influence simultaneously. This area represents the power Law&Legislature gives to Commoners/Labourers such as Welfare, Labour Regulation, Employment Contract, and Collective Bargaining. This area is very developed in the Western civilisation, and all the modernised/Westernised nations.

The bottom right red sphere is the area that "Law&Legislation cannot" so that Authority/Meritocrats and Commoners/Labourers can. This is the area both Authority/Meritocrats and Commoners/Labourers influence simultaneously. This area represents a set of the unwritten rules. Illegal acts against Law&Legislation states is one of them. It also includes a communal rule which individuals implicitly accepted to exist without making any explicitly written or clarified contract. This area is still influential in the non-Western nation and any isolated communitarian civilisation.

Then, there are three areas where two "Cannot" spheres interact: Neither Authority/Meritocrats nor Commoners/Labourers can i.e. "Law&Legislation can", Neither Commoners/Labourers nor Law&Legislation can can i.e. "Authority/Meritocrats can", and Neither Authority/Meritocrats nor Law&Legislation can i.e. "Commoners/Labourers can". These three "Can" spheres represent the area which at least one of Authority/Meritocrats, Commoners/Labourers, or lawyers/legislators can decide and control.

The middle sphere where these three "Cannot" spheres interact. This sphere represents the area which none of Authority/Meritocrats, Commoners/Labourers, or lawyers/legislators can decide or control. Let's call this area "Point X".

Thomas Hobbes described Point X takes appears when people create their nation. Nation is composed of authorities, a sovereign and aristocracies, commoners, and civil law. Then, when these three components are combined together to form a nation, none becomes totally sovereign enough to be completely free to control not only the others but also themselves. When these three components interact each other, there is an invisible power controlled by nobody. Then, these three have to work for not only their own or the others' interest but also the interest of a whole nation which is called "National Interest". Also, this invisible power influence and form the characteristics of these three components. A nation with this invisible power is called "Leviathan", the mystic enormous monster, in Hobbes' book. Nowadays, Hobbes' Leviathan is also referred to not only nation but also corporation. His theory explains how human-made structure works.

Jean Jack Rousseau also mentioned the "Equity Law" which can be explained as Point X. He described that individuals make their social contract between them when they have to agree or disagree on their exchange in trade and following custom in their culture. He explained that the current environmental circumstances (E.g. Ethnological characteristics, climate, geographic location, time period, available technology, and fashion) highly influence over the Equity Law. Meanwhile, Hobbes explained how human-made structure works, Rousseau described how humans have to take exogenously from their given environment they are currently living in. His Equity Law theory lately interpreted by Adam Smith, the father of economics, to the "Market Mechanism".

Max Weber warned that the bureaucracy holds this invisible force. Someone has said that bureaucracy is only the universal characteristics of all nations, corporations, and any institutes composed of humans.

Bureaucracy is certainly a human-made structure guided by Law&Legislation. But, when bureaucracy is formed, there is also a certain geometry of power which Law&Legislation cannot have influence over. In particular in the Eastern civilisation, the unwritten rule which people implicitly agree or disagree regardless of what their Law&Legislature regulates. Even in the Western nations, Weber claimed that there is a contingent effect of bureaucracy which is not guided by the Law&Legislation. As the structure of bureaucracy is composed of human-beings, there is always some space that humans' emotion can intervene into bureaucracy's decision making process. The human-error also occurs inside this bureaucratic procedure. This is the characteristics whihc Law&Legislation cannot have a full influence over bureaucracy.

Status of individuals is also important to keep the bureaucracy. The characteristics of bureaucracy changes depending on how the human-beings composing it regard and admire the status. Certain individuals can be admired because they are educated or elderly enough to appoint them to be in charge of the bureaucratic system (I.e. Becoming the authority/meritocrats). When majority of individuals (Commoners/Labourers) change their mind to respect the different characteristics to admire (E.g. They no longer admire being educated or elderly, and they start admiring being rich and handsome instead), the structure of bureaucracy drastically changes (Even revolts itself). This is the example that both Authority/Meritocrats (with their merit and status) and Commoners/Labourers (with the power of their number) have some significant influence over bureaucracy though they are also under the influence of the others to be controlled.

All in all, there "is" such an existence called corporation as an invisible institution. Corporation is "Leviathan" of this modern day, and thrives in the market mechanism, the Equity Law. Of course, corporation is invisible, and the tax on corporation is consequently paid by some individuals. Nonetheless, there is a meaning to focus on the "action" of a corporation, the invisible force. Then, taxing on the act of this invisible force can mean something more than taxing directly on individuals' income and expenditure. Hence, the corporation tax implies taxing on the invisible but significantly influencing our living environment; and what the Japanese professor in economic says is contradicted.

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