I picked up a copy of Sapiens because I heard that Yuval Noah Harari was a deep thinker who had something to say about corporations and their relationship to humans, which made me think of him as a possible candidate for high priesthood of alt-QAnon. There may still be a place for him in the movement -- Sapiens is full of some of the same ideas I have had or wish I had had -- but it won't be because of his discussion of humans and corporations.
I had high hopes for him when he started talking about human institutions:
How did Homo sapiens manage to cross this critical threshold, eventually founding cities comprising tens of thousands of inhabitants and empires ruling hundreds of millions? The secret was probably the appearance of fiction. Large numbers of strangers can cooperate successfully by believing in common myths.
Any large-scale human cooperation – whether a modern state, a medieval church, an ancient city or an archaic tribe – is rooted in common myths that exist only in people’s collective imagination. Churches are rooted in common religious myths. Two Catholics who have never met can nevertheless go together on crusade or pool funds to build a hospital because they both believe that God was incarnated in human flesh and allowed Himself to be crucified to redeem our sins. States are rooted in common national myths. Two Serbs who have never met might risk their lives to save one another because both believe in the existence of the Serbian nation, the Serbian homeland and the Serbian flag. Judicial systems are rooted in common legal myths. Two lawyers who have never met can nevertheless combine efforts to defend a complete stranger because they both believe in the existence of laws, justice, human rights – and the money paid out in fees.”
Yet none of these things exists outside the stories that people invent and tell one another. There are no gods in the universe, no nations, no money, no human rights, no laws and no justice outside the common imagination of human beings.
People easily acknowledge that ‘primitive tribes’ cement their social order by believing in ghosts and spirits, and gathering each full moon to dance together around the campfire. What we fail to appreciate is that our modern institutions function on exactly the same basis. Take for example the world of business corporations. Modern businesspeople and lawyers are, in fact, powerful sorcerers. The principal difference between them and tribal shamans is that modern lawyers tell far stranger tales.
And then he went on to explain Peugeot SA -- the carmaker -- in Alt-Anonesque terms:
In what sense can we say that Peugeot SA (the company’s official name) exists? There are many Peugeot vehicles, but these are obviously not the company. Even if every Peugeot in the world were simultaneously junked and sold for scrap metal, Peugeot SA would not disappear. It would continue to manufacture new cars and issue its annual report. The company owns factories, machinery and showrooms, and employs mechanics, accountants and secretaries, but all these together do not comprise Peugeot. A disaster might kill every single one of Peugeot’s employees, and go on to destroy all of its assembly lines and executive offices. Even then, the company could borrow money, hire new employees, build new factories and buy new machinery. Peugeot has managers and shareholders, but neither do they constitute the company. All the managers could be dismissed and all its shares sold, but the company itself would remain intact.
Pausing for a moment to note that Peugeot is not actually immortal -- a judge could order its dissolution, and that would be the end of Peugeot, Harari then explains:
Peugeot is a figment of our collective imagination. Lawyers call this a ‘legal fiction’. It can’t be pointed at; it is not a physical object. But it exists as a legal entity. Just like you or me, it is bound by the laws of the countries in which it operates. It can open a bank account and own property. It pays taxes, and it can be sued and even prosecuted separately from any of the people who own or work for it.
He then goes on to explain that Peugeot is a limited liability company, and that he idea of an LLC "is among humanity’s most ingenious inventions." Until it came along, people going into business were personally liable for anything that might go wrong, and if things did go wrong, they'd have to pay for it from their own assets -- their houses, their cattle, their land, or even their children (selling them into servitude). And if he simply couldn't pay, there was debtor's prison or enslavement for him. Those risks were
why people began collectively to imagine the existence of limited liability companies. Such companies were legally independent of the people who set them up, or invested money in them, or managed them. Over the last few centuries such companies have become the main players in the economic arena, and we have grown so used to them that we forget they exist only in our imagination. In the US, the technical term for a limited liability company is a ‘corporation’, which is ironic, because the term derives from ‘corpus’ (‘body’ in Latin) – the one thing these corporations lack. Despite their having no real bodies, the American legal system treats corporations as legal persons, as if they were flesh-and-blood human beings.
And he goes on to explain that that's where Peugeot came from -- back in 1896 Armand Peugeot set up an LLC so he could make automobiles without risking his own assets. And the company lived on after he died in 1915. He goes on:
How exactly did Armand Peugeot, the man, create Peugeot, the company? In much the same way that priests and sorcerers have created gods and demons throughout history, and in which thousands of French curés were still creating Christ’s body every Sunday in the parish churches. It all revolved around telling stories, and convincing people to believe them. In the case of the French curés, the crucial story was that of Christ’s life and death as told by the Catholic Church. According to this story, if a Catholic priest dressed in his sacred garments solemnly said the right words at the right moment, mundane bread and wine turned into God’s flesh and blood. The priest exclaimed ‘Hoc est corpus meum!’ (Latin for ‘This is my body!’) and hocus pocus – the bread turned into Christ’s flesh. Seeing that the priest had properly and assiduously observed all the procedures, millions of devout French Catholics behaved as if God really existed in the consecrated bread and wine.
In the case of Peugeot SA the crucial story was the French legal code, as written by the French parliament. According to the French legislators, if a certified lawyer followed all the proper liturgy and rituals, wrote all the required spells and oaths on a wonderfully decorated piece of paper, and affixed his ornate signature to the bottom of the document, then hocus pocus – a new company was incorporated. When in 1896 Armand Peugeot wanted to create his company, he paid a lawyer to go through all these sacred procedures. Once the lawyer had performed all the right rituals and pronounced all the necessary spells and oaths, millions of upright French citizens behaved as if the Peugeot company really existed.
Telling effective stories is not easy. The difficulty lies not in telling the story, but in convincing everyone else to believe it. Much of history revolves around this question: how does one convince millions of people to believe particular stories about gods, or nations, or limited liability companies? Yet when it succeeds, it gives Sapiens immense power, because it enables millions of strangers to cooperate and work towards common goals. Just try to imagine how difficult it would have been to create states, or churches, or legal systems if we could speak only about things that really exist, such as rivers, trees and lions.
Over the years, people have woven an incredibly complex network of stories. Within this network, fictions such as Peugeot not only exist, but also accumulate immense power. The kinds of things that people create through this network of stories are known in academic circles as ‘fictions’, ‘social constructs’, or ‘imagined realities’. An imagined reality is not a lie. I lie when I say that there is a lion near the river when I know perfectly well that there is no lion there. There is nothing special about lies. Green monkeys and chimpanzees can lie. A green monkey, for example, has been observed calling ‘Careful! A lion!’ when there was no lion around. This alarm conveniently frightened away a fellow monkey who had just found a banana, leaving the liar all alone to steal the prize for itself.
Unlike lying, an imagined reality is something that everyone believes in, and as long as this communal belief persists, the imagined reality exerts force in the world. The sculptor from the Stadel Cave may sincerely have believed in the existence of the lion-man guardian spirit. Some sorcerers are charlatans, but most sincerely believe in the existence of gods and demons. Most millionaires sincerely believe in the existence of money and limited liability companies. Most human-rights activists sincerely believe in the existence of human rights. No one was lying when, in 2011, the UN demanded that the Libyan government respect the human rights of its citizens, even though the UN, Libya and human rights are all figments of our fertile imaginations.
Ever since the Cognitive Revolution, Sapiens has thus been living in a dual reality. On the one hand, the objective reality of rivers, trees and lions; and on the other hand, the imagined reality of gods, nations and corporations. As time went by, the imagined reality became ever more powerful, so that today the very survival of rivers, trees and lions depends on the grace of imagined entities such as gods, nations and corporations.
I started off wanting to paraphrase more, but I feel like I had to let Harari speak for himself just so you can follow his exact argument, because I'm still a bit confused about it. Yes, it is true that a "corporation" is a legal concept that in and of itself has no physical form. And one might say it has no "reality" -- certainly not the same kind of reality a a river or a mountain -- apart from the imagined reality of its legal statuus. But as Harari points out, the law treats it as a "person." And as Jeremy Lent and Alt-QAnon hold, a large corporation is like an extremely powerful and sociopathic person.
So while I'm not disagreeing with Harari, and perhaps its a useful insight to say that the cognitive revolution gave rise to stories which first gave rise to religions and ultimately gave rise to corporations, it doesn't really help us understand what a corporation is, and how to control them.
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