Every nation has the government it deserves. – Joseph de Maistre
It is often said that large companies are amoral, and commit myriad sins in the name of profit. At the same time, it’s clear that companies like Google, Paypal, Facebook, Chase and Amazon police “morality” and discriminate against anything to do with sex. Oddly enough, though the concept of an amoral morality cop would seem oxymoronic, it’s actually fundamentally correct; though corporations are not completely amoral, most have only one moral principle: responsibility to their stockholders. A corporation is both legally and practically bound to protect its investors and to maximize their profits, and unless the board of directors is dominated by unusually-principled shareholders, all other moral precepts are subordinate to that one. Readers who are my age and older will recall that in the ‘70s and ‘80s companies weren’t nearly as bluenosed as they’ve become in the last two decades; as I explained in “They Don’t Want To Know”, “It’s not that the owners of these companies are all a bunch of prudes; it’s that far too many of the people who buy their products are, and they can’t afford to take chances in a world where ‘offense’ is as fetishized as it is today.”
But while this was sufficient motivation for some companies who were both controlled by a small number of executives and image-conscious to the point of paranoia (e.g., Paypal and Facebook), others needed a stronger impetus to induce them to reject piles of lovely money merely because a few of their customers might clutch their pearls if they discovered sex workers or other businesspeople they deemed “shady” were also customers. Naturally, the US government was happy to provide that stronger motivation. The latest in a long tradition of government programs designed to criminalize private behavior and harass nonconformists, minorities, the poor and those with unpopular opinions and pastimes is Operation Choke Point, which started in March of last year but has only recently come to light due to a few high-profile effects. Jason Oxman of the Electronic Transactions Association explained it thus:
…the Department of Justice and other federal agencies are…[pursuing] disfavored – but legal – categories of merchants by targeting our nation’s payments systems…as more details of the program become public, more concerns are raised. The “chokepoint” in this operation is the nation’s payments infrastructure…Federal law enforcers are targeting merchant categories like payday lenders, ammunition and tobacco sales, and telemarketers – but not merely by pursuing those merchants directly. Rather, Operation Chokepoint is flooding payments companies that provide processing service to those industries with subpoenas, civil investigative demands, and other burdensome and costly legal demands. The theory…has superficial logic: increase the legal and compliance costs of serving certain disfavored merchant categories, and payments companies will simply stop providing service to such merchants. And it’s working…Thus far, payday lenders have been the most frequent target…what category will be next and who makes that decision?
The next big target, predictably, was sex work: under government pressure, Chase Bank has been closing down the accounts of anyone with any connection to porn, and though Paypal is very tight-lipped about it, there seems little doubt that the same program was the reason that it suddenly and without warning threatened to cut the crowdfunding platform Patreon off entirely due to “adult content” on the site. Lest you think this is going to stop with sex work, I call your attention to this list of businesses the FDIC considers “high risk”; many of these are already being targeted, so the rest won’t be far behind:
Ammunition Sales
Cable Box De-scramblers Coin Dealers Credit Card Schemes Credit Repair Services Dating Services Debt Consolidation Scams Drug Paraphernalia Escort Services Firearms Sales Fireworks Sales Get Rich Products Government Grants Home-Based Charities Life-Time Guarantees |
Lottery Sales
Mailing Lists/Personal Info Money Transfer Networks On-line Gambling PayDay Loans Pharmaceutical Sales Ponzi Schemes Pornography Pyramid-Type Sales Racist Materials Surveillance Equipment Telemarketing Tobacco Sales Travel Clubs |
While some of these (such as get-rich and Ponzi schemes) are undoubtedly sketchy and others (credit repair, debt consolidation) have strong potential to be, some of the others (escort services, gambling) are on the list due to a high chargeback rate, while others (gun & ammunition, drugs & tobacco) are purely political targets. But whatever the reason, the government’s growing tendency to force private entities to act as arms of the fascist state is incredibly alarming, not merely to those who care about human rights and individual liberty, but even to bankers:
The Justice Department’s “Operation Choke Point” is…being pushed far beyond its stated objective…and is having potentially devastating impact on lawful check cashing and small loan businesses. This in turn will cut off tens of millions of people from much needed access to money to meet emergency needs…No matter what your personal view [of targeted industries]…Operation Choke Point should be both alarming and repugnant. It is a direct assault on the democratic system and free-market economy that have made the United States the most powerful and prosperous nation in world history. Without color of law and based on a political agenda, unelected bureaucrats at the Department of Justice are coordinating with some bank regulators to deny essential banking services to companies engaged in lawful business activities. Bankers operating under the yoke of an oppressive regulatory regime are being cowed into compliance. If lawful payday lenders and check cashers can be driven out of the banking system because someone in the government doesn’t like them or what they do, what lawful businesses are next?…
Note that two of the articles I’ve quoted here ask the sensible question, “Who will be targeted next?” As I’ve pointed out many times, campaigns of persecution always start out with unpopular entities (in this case payday lenders and sex workers), but absolutely never stop there. Paypal would have shut down all of Patreon because some of its clients produced erotic art; by the same token, what’s to stop Operation Choke Point from attacking convenience stores for selling tobacco, liquor, lottery tickets and men’s magazines? There are always useful idiots who will support tyranny against things they don’t like (such as guns, tobacco or porn), and are then shocked when the same legal tools are used against things they do like (such as birth control). For now, legal-but-disfavored businesses can turn to bitcoin and offshore payment processing. But while the DoJ is currently satisfied with mere financial harassment, it wouldn’t be hard for its prosecutors to invent spurious charges using vague statutes (“conspiracy”, “wire fraud” and “money laundering” are very handy that way) to persecute targeted businesses which keep going despite the government’s attempts to stifle them. I can’t say where it will all end, but I can say this: it won’t stop on its own. The institutions behind it must be hacked apart, before they strangle us all.
You mean a group of people, given authority, not readily answerable to anyone, is abusing that authority? I’m shocked!
I haven’t had a banking account in my years. I deal only with credit unions, where I am an owner.
Unfortunately, it’s very hard to avoid having a bank account.
Oh well, when they came for Wikileaks few people spoke out, so …
I just hope the logical endpoint arrives soon – with governments targeting arms of the payment system companies themselves.
But you’re wrong about corporate morality.
Companies are not amoral. Nor is their morality to maximise shareholder profit – any more than my morality is any of the laws which seek to restrict and direct my behaviour.
Companies have only one imperative and that’s corporate survival and just like us their morality evolves according to selection pressure. The selection pressure of companies comes from the environment of the markets which is very different to the forests and savannahs that formed our morality for most of human history so it’s hardly surprising corporate morality is so alien and indifferent to humanity it’s often indistinguishable from evil. It’s geared towards their interactions with other institutions – primarily other companies – not towards human benefit. Small wonder they are rendering the planet unfit for human civilisation.
People don’t direct the morality of companies because they are expendable. If a director doesn’t comply with the true morality of the corporation – regardless of what it’s charter or statement of principles might claim – he will be replaced. Otherwise the company itself will fail and everyone will go.
Gah. The civil legal system is the United States is a horrible monster. It allows people with money to waist to bully people out of doing legal things they don’t like, including the bullies who work for government.
“Companies have only one imperative and that’s corporate survival and just like us their morality evolves according to selection pressure”
Thank you Cabrogal. I seem to recall a Supreme Court decision affirming that decades ago.
Just because the Supreme Court says something is true doesn’t always mean it isn’t. 😉
Even I wouldn’t say something that anti-American.
Or that anti-Australian for that matter.
Come to think of it, it’s a bloody nasty thing to say about any nationality.
It may be nasty, but does that mean de Maistre is incorrect?
I’d say every democratic nation has the government the majority deserve. But the rest of us get dragged along for the ride whether we like it or not.
It stipulates that most citizens are stupid when it comes to selecting who they want to be governed by. Unfortunately, current research seems to rather strongly support that conclusion.
So while in fact it is a bloody nasty thing to say about any group of people, it seems also to be a bloody accurate one.
While I support prosecution of actual crimes such as murder, assault and rape, I do not believe sex work should be illegal. Let’s not confuse apples with oranges.
It’s noteworthy that the FDIC’s list is in part the RESULT of the chokepoint tactics, not a partnership with chokepoint practitioners. The FDIC guidance is a “safety and soundness” concern for open banks — in other words, risk to the depositors from banking practices creating financial pressures. And they identify why payment processing for businesses from the identified list raise safety and soundness concerns: “risks not present in typical commercial customer relationships, including greater strategic, credit, compliance, transaction, legal, and reputation risk.” Credit, compliance, transaction, legal, and reputation risk are all the *result* of the tactics employed by DoJ and other heavy-handed government agencies.
So the FDIC urges its banks to perform extra due diligence on certain payment processing customers, because those businesses have heightened compliance and enforcement and reputation risks — bringing the FDIC into the world of regulators subtly increasing the pressures on banks.
Runaway government directing the most minute parts of people’s lives — largely without sanction from the government. Jeebus. . . .
For most of the 20th century the management of companies was fairly conservative, aimed at the survival of the company, remuneration of the owners—the shareholders—at a reasonable level, corporate growth and fair reward for the managers of the company.
After the Reagan/Thatcher financial loosening in the 1980s, things have certainly changed. A new breed of manager now has his or her own interests as paramount; the company is managed for their personal reward, a system rather perversely encouraged by bonuses (often) related to the company’s share price. Bankers are the ones who attract the most opprobrium. If there was once a 40-times differential between the lowest and highest paid in the company, this can now be 200-times and more; and, for most employees, real wages have barely increased in the last 30 years.
For instance, the British bank, Barclays, recently announced that profits were down by around 30%, and though the dividend was maintained, bonuses increased by 10%. Around one third of shareholders voted against this, including some large institutional investors, but the motion was passed; many saw this as a reward for failure.
Also, many foreign corporations which seem to be UK based actually have their registered offices elsewhere, in low corporate taxation places. For example, amazon.co.uk is based in Luxembourg where it pays its taxes; it pays almost nothing in taxes in the UK. While this is perfectly legal, it is seen as immoral by the majority who think that “we are all in this [austerity] together”.
So we have the unedifying sight of companies applying a peculiar morality to others, refusing their business which may be perfectly legal—while some banks seem to do little to stop illegal money laundering—not, I suspect, because of fear of the owners’ sensibilities, but because managers’ own rewards might be threatened. The company now seems to be run not for the benefit of the owners, but for the benefit of their avaricious managers; and it may be in their best interests to close the company.
I think the corporate environment we have has created the bonus culture.
These days it’s probably less important for a big company’s survival to meet the needs of clients, staff or owners than it is to have well networked senior management. They can cut deals via the old boys network, get trade deals and regulations written the way they want them and even if the company goes bankrupt they can tap their connections in government to ensure a tax-payer funded bailout.
Even if none of the conventional business fundamentals are right you can ensure success in the modern market by pulling strings so from the point of view of corporate survival the string pullers are worth hundreds of time as much as the people who do the ‘real’ work.
bonuses are no longer related to company performance. Here in Alberta we have Health Services executives getting bonuses regardless of whether or not they achieve low ball expectations and getting more than generous severance packages even after spectacular failures and/or being terminated with cause
Reblogged this on Pycraftsworld’s Weblog.
Cabrogal, I hope you know I am in agreement with you.
Yeah.
I just couldn’t resist the free kick at the Supreme Court you set up for me.
I’d certainly like to see some competitor to PayPal pop up that doesn’t honor all these stupid restrictions on who can do business with them.
As for banks, when so-called overdraft fees (and manipulation of transaction order) became their main profit center, banking ceased to be an honorable job. I don’t make an exception for credit unions either, they’re just as bad.
Unfortunately, anyone who gets a paycheck is forced to deal with the banking system, at least to the extent of getting that check cashed (which means they’re NOT going to succeed in shutting down the check cashing industry, at least unless they first make it illegal for banks to refuse anyone a checking account).
If this nasty government behavior continues, though, the likely result is that large parts of American business will be forced to move to the black market, just as has happened throughout the poor countries of the world (and is a big part of the reason they’re poor). This is what overregulation and overtaxation do to a country.
In the meantime, why don’t we try to turn the tables? Pro-freedom businesses should start refusing to serve cops, spies, and maybe all federal bureaucrats.
Can we start the revolution already?
I’m totally ready. I really don’t see any other way to combat this nonsense other than to take off and nuke it from orbit … just to be sure.
I almost always pay cash when seeing sex workers. I have, however paid money into women’s accounts when a relationship of trust has developed (plus on occassions when I have asked a lady to stay for longer than previously agreed she is, sometimes happy for the extra money to be paid into her account). My bank has never queried these payments but from what you say a time may come when they will start doing so which is a cause for concern.
“But whatever the reason, the government’s growing tendency to force private entities to act as arms of the fascist state is incredibly alarming, not merely to those who care about human rights and individual liberty, but even to bankers:”
How much of this is actually a war on men (and the women who love them)? It’s a rhetorical question.
[…] Choke Point. […]
José Antonio Ocampo — a world-renowned economist, former Colombian finance minister, and former nominee to head the World Bank — has filed a complaint with the Consumer Financial Protection Bureau against JPMorgan.
He says the bank shut down his accounts without warning, the Financial Times reports. (http://www.ft.com/intl/cms/s/0/3a8f975c-d523-11e3-adec-00144feabdc0.html?siteedition=intl#axzz312BenjiA)
“Friday was hell for me,” Ocampo told the FT. “I had all my money frozen. I am being treated like a criminal.”
The bank says Ocampo’s account was shut down because JPM is reevaluating its business with “politically exposed persons” like non-U.S. former high-level diplomats (think the Tony Blairs of the world) because of high compliance costs. It’s all part of a new effort at the bank to clamp down on any potential for money laundering or security breaches.
Pornography? This means war!
[…] Others were obviously targeted because some moralizer or safety Nazi doesn’t approve: online gambling, fireworks sales, pharmaceutical sales, head shops, businesses selling racist materials, and of course porn. (One liberty-loving former call girl, Maggie McNeill, has already spoken out articulately. […]
[…] Others were obviously targeted because some moralizer or safety Nazi doesn’t approve: online gambling, fireworks sales, pharmaceutical sales, head shops, businesses selling racist materials, and of course porn. (One liberty-loving former call girl, Maggie McNeill), has already spoken out articulately. […]
[…] big mess and a PR disaster, and it may have something to do with the U.S. Dept. of Justice’s Operation Choke Point. You can browse Twitter for more reactions/questions aimed at WePay. You can also donate to […]
This crap may explain why I can no longer use Green Dot to send money to my SO in another state. She has a prepaid debit card, and I used to fund it with a Green Dot Moneypak. Well, Green Dot decided she was a whore and cancelled her debit card. Actual statement: “New banking rules required us to flag this account for questionable activities” but we all know what they really meant.
[…] Operation Choke Point was an Obama administration initiative to impose extrajudicial and lawless punishment upon pornographers, gun shops, gambling operations, sex workers, tobacco sales, and many other kinds of businesses the government bureaucracy considered undesirable, by threatening to flood payment processors with “subpoenas, civil investigative demands, and other burdensome and costly legal demands” if they didn’t terminate services to (“deplatform”? Hmm…) those industries. […]
[…] Operation Choke Point was an Obama administration initiative to impose extrajudicial and lawless punishment upon pornographers, gun shops, gambling operations, sex workers, tobacco sales, and many other kinds of businesses the government bureaucracy considered undesirable, by threatening to flood payment processors with “subpoenas, civil investigative demands, and other burdensome and costly legal demands” if they didn’t terminate services to (“deplatform”? Hmm…) those industries. […]