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Agency problem: Difference between revisions
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The critical difference between human person and [[corporation|corporate person]] is that ''a [[corporation]] cannot speak for itself''. A ''human'' principal, being a thinking, animate thing, can apprehend the [[conflicts of interest]] of which {{sex|he}} may be a casualty, and police them. A pile of papers filed at companies house cannot. It can only ''crowd-source'' defence of its own interests to its “friends” who ''are'' animate, but who have interests of their own. It can seek to nullify any ''one'' agent’s conflicting interest by asking the aggregated weight of its ''other'' agents to represent its against that one agent in a kind of “wisdom of crowds” way — their ''individual'' interests disappearing through some kind of phase cancellation effect to which their ''common'' interest — furthering the interest of their mutual principal the [[corporation]] — is immune. This works as long as the self-interests of each of the other agents ''do'' cancel themselves out: if all the agents have a ''common'' self-interest which conflicts with the corporation’s interests, this crowdsourcing strategy won’t work. | The critical difference between human person and [[corporation|corporate person]] is that ''a [[corporation]] cannot speak for itself''. A ''human'' principal, being a thinking, animate thing, can apprehend the [[conflicts of interest]] of which {{sex|he}} may be a casualty, and police them. A pile of papers filed at companies house cannot. It can only ''crowd-source'' defence of its own interests to its “friends” who ''are'' animate, but who have interests of their own. It can seek to nullify any ''one'' agent’s conflicting interest by asking the aggregated weight of its ''other'' agents to represent its against that one agent in a kind of “wisdom of crowds” way — their ''individual'' interests disappearing through some kind of phase cancellation effect to which their ''common'' interest — furthering the interest of their mutual principal the [[corporation]] — is immune. This works as long as the self-interests of each of the other agents ''do'' cancel themselves out: if all the agents have a ''common'' self-interest which conflicts with the corporation’s interests, this crowdsourcing strategy won’t work. | ||
So do all its agents have such a common conflicting interest? ''Yes''. | So do ''all'' its agents have such a common conflicting interest? ''Yes''. | ||
Any one of its agents is charged with protecting the principal’s interests, but two overriding considerations will inevitably take priority: (i) their wish to protect and perpetuate their own role ''as'' agent, and | Any one of its agents is charged with protecting the principal’s interests, but two overriding considerations will inevitably take priority: (i) their wish to protect and perpetuate their own role ''as'' agent, and protect its accompanying income stream — their need to ''persuade the principal that their role is needed'' whether or not it ''is'' needed — no turkey votes for Christmas; and (ii) their wish to not ''fuck up'' — not only is the role necessary but ''I am a suitable person to carry out that role''. | ||
===Legal industry transformation and the agency problem=== | ===Legal industry transformation and the agency problem=== | ||
The JC humbly submits that any plan to revolutionise the legal industry that does not account for the [[agency problem]] ''will fail''. Everyone who purports to speak for a corporation does so in a way that, above all else, does not prejudice {{sex|his}} own agency with the corporation. | The JC humbly submits that any plan to revolutionise the legal industry that does not account for the [[agency problem]] ''will fail''. Everyone who purports to speak for a corporation does so in a way that, above all else, does not prejudice {{sex|his}} own agency with the corporation. | ||