Torchwood: Miracle Day Episode 6

Not a whole lot to discuss this week. The whole “concentration camp” this is obviously designed to provoke outrage, but somehow fails to do so, mostly because there doesn’t seem to be any particular reason for them. I mean, say what you like about the tenets of National Socialism, at least it’s an ethos. Here, we’ve got a situation where ovens for burning people alive are put into place on less than a week’s notice. Color us unconvinced.

In any case, there’s also the issue of whether it makes sense that the PhiCorp buildup could go unnoticed, even by the company’s own executives, for the twenty years or more that the show suggests is in view.

The answer is, unsurprisingly, “No.” Corporations exist, for the most part, to make a profit. There are people who are keenly interested in the profitability of every corporation, namely its shareholders, directors, etc. So the idea that a company can spend what must be significant amounts of money on projects that don’t wind up going anywhere because someone is manipulating “the system” is just implausible. It wouldn’t take very long for a shareholder to question where these large amounts of money are going and why they aren’t generating any kind of return on investment.

Sure, the corporate world can seem one vast, impenetrable morass of hidden transactions. But that’s not really the case. The fact that you don’t have any idea what’s going on probably just means that your paycheck doesn’t depend on you knowing what’s going on. But there are people whose paycheck does depend on knowing as much as possible about certain things, so corporate moves like this one are unlikely to go unnoticed for long. For example, people noticed that Goldman Sachs is manipulating the aluminum distribution network almost right away. We’re talking about a financial services company exploiting an arcane loophole in commodity exchange warehousing rules, and it was picked up on quickly. And just because something doesn’t make the news doesn’t mean that someone doesn’t have tabs on what’s going on.

The reason this is significant is because of what are known as shareholder derivative suits, wherein a shareholder who believes that management is allegedly harming the corporation can file suit against the directors of the corporation. Keeping tabs on what corporate boards are doing is a significant part of what investment services firms do, as they’re working for their clients, the shareholders, who will want to know why they aren’t getting the maximum return on their investment. Spending millions on bizarre stockpiling projects and mystery properties outside Beijing is exactly the sort of thing which attracts unpleasant attention.

And seriously now, the COO is one of the most powerful executives in a company. So if the COO of PhiCorp asks a PhiCorp employee what they’re doing and why, they’ll either tell him or he can fire people until he finds someone who will. If PhiCorp operations are so disorganized and opaque that a senior executive needs to bring in outside investigators to figure out what’s going on in his own damned company, the conclusion is not that the company is a ruthlessly efficient machine, but that it’s so hobbled by bureaucracy that the real miracle is that it’s even solvent.

This is a pretty common misunderstanding about the corporate world though, and probably why so many people fear corporations. They can seem these powerful, inscrutable monoliths, the operations and controllers of which are hidden from the public. The fact is that in most cases this simply isn’t true, but getting informed can be time-consuming and difficult, especially if one’s day job does not require it. But the reality is that a lot of this information is out there for the asking, if one knows where to look and who to ask.

What this episode didn’t have is much development of the actual plot, other than resolving what was always going to be a set of temporary perils in Wales and California. But we’re no closer to knowing what’s actually going on here than we were two weeks ago. Sigh.

18 responses to “Torchwood: Miracle Day Episode 6

  1. What of the question of are they legally murdering people when they burn them? They have these new “categories of life”, but does that mean that they can get away with “cat 1 = dead = disposable under health regulations”?

    • We actually talked about that last time. The conclusion was that if categorization is constitutional at all (and it isn’t now, but the Supreme Court could make it that way), that probably is too.

  2. I think that (ENRON) you are overestimating (ENRON) the ability of the share(ENRON)holders to be able to discover (ENRON) when a corporation is going off (ENRON) the rails.

    • Over a long period of time, yes. Enron was also engaging in shenanigans that looked like it was making money; this is a company spending 20 years preparing to make death camps for reasons which seem to be questionably connected to actually making money.

    • First, Tom is right: Enron appeared to make money for quite some time, and its collapse was very, very sudden. It had been a traditional utility company for decades, and the time from when Skilling and Lay started screwing things up to bankruptcy was about ten years.

      Second, people did know that Enron was in trouble. Analysts knew there were problems at least three years before everything fell apart.

      Third, the reason Enron fell apart was essentially because it was trading in byzantine financial products that no one had every really dealt with before, so even analysts were slow to pick up on what was going on. But construction projects and warehouse stockpiles are pretty concrete, and people understand what those are.

      But the mention of Enron really just supports my thesis. When corporations go off the rails into projects that don’t actually make money, they get into trouble, sometimes spectacularly. So the idea that PhiCorp could have been preparing for Miracle Day for twenty years is pretty implausible.

  3. I’ve seen some incredibly complicated corporate structures, including one set up as a web of not-for-profit and for-profit companies intended to conceal asset ownership (the donor wanted to make charitable donations with even the recipient not knowing where the money originated). But as you say, correctly, it’s one of the things laypeople don’t understand. If there are a hundred shell companies, that probably means the same three people are on the “board of directors” for each shell company. Each of whom would know or have access to the precise activities of each asset owned by each shell company. So even with a closely-held multinational conglomerate (to use a legally incorrect term to describe the web of companies) there should still be as many as a dozen people who could access everything. The CEO, CFO, COO, members of the Board, at least somebody in Legal (they’re probably the nominal board members for the shell companies), someone in Accounting (asset depreciation for all the warehouses), et cetera. Not to mention government officials wherever the company has it’s formal headquarters, although the not-for-profit I’m thinking of had a special law passed by a Caribbbean nation to help conceal ownership.

    Also, I haven’t seen the episode but I suspect there are some issues with the concentration camps that are being overlooked. Where are they being set up? Did the government eminent domain the land? Is no-one filing lawsuits about NIMBY-ism? Whether you’re in favor of cremating the living or not, the ash and smell must be horrible environmental problems no-one wants to live next to. Or are they installing scrubbers in the smokestacks?

  4. I’m totally with you on the corporate shell game. Again, just because laymen find it confusing doesn’t mean that no one knows what’s going on.

    As far as the NIMBY issue though, the camps are being set up on purported military bases, generally shuttered ones. As it’s almost impossible to prevent the government from doing just about whatever the hell it wants on its own property, I didn’t think the land use issue was that important.

  5. I forgot to add – the major purpose of the Board of Directors is supposed to be to approve budgets, audit the company, and generally ensure profitability. Enron and the like get by usually because the CEO lies to the Board about the numbers, and the Directors don’t know much about the company and don’t ask if things seem to be looking profitable. For PhiCorp to avoid Board scrutiny they’d have to have some incredibly profitable departments (for all 20 years), the involvement of the CEO (to talk the Board away from looking closer beyond raw profit numbers) and unbelievable luck. Plus, the company would not only have to be closely held, it would have to STAY closely held – which seems impossible for a multinational of size because there isn’t enough capitalization, and even if it happened there is the risk the majority stockholder would die or sell off the shares to realize the instant profits instead of relying on dividend income. And usually CEOs and upper management get stock options, so they too would want the company to be publically traded.

  6. “If PhiCorp operations are so disorganized and opaque that a senior executive needs to bring in outside investigators to figure out what’s going on in his own damned company, the conclusion is not that the company is a ruthlessly efficient machine, but that it’s so hobbled by bureaucracy that the real miracle is that it’s even solvent.”

    Thank-you for the funniest thing I have read all day!

  7. I got the implication from what Ernie was saying that PhiCorp itself was basically a shell company for some larger group (the Family / the Triangle people / can’t remember their name). Leaving aside that the parent company must have bigger resources/wealth/hidiness/etc., is it possible to play PhiCorp as a shell company, have it do all that stuff, and not be organised enough for those nominally in charge that they don’t know what’s going on?

    • First of all, PhiCorp isn’t just a shell company, or any other kind of corporate front, really. It’s supposed to be the world’s largest pharmaceutical company. It’s got buildings and factories and warehouses and everything. Shell companies, as such, basically consist of mailing addresses and registered agents. They don’t have much in the way of assets, let alone entire production facilities.

      Second, even if it were a shell company, it’s pretty much impossible for all of the executives to be truly ignorant of large scale projects the company is working on. Ignorant of some of the nitty-gritty, maybe, and certainly ignorant of a lot of the day-to-day stuff (see, e.g., Dilbert), but ignorant of a multi-decade program to stockpile painkillers? No. They’d have to be the ones originating and signing the orders.

  8. Clearly, PhiCorp hired all its senior staff from Wayne Industries, where Bruce Wayne can hide, at one point, building the Justice League satellite and its various space craft in the R&D budget — never mind all the various Bat-toys. And it must use Wayne Industries CPAs as well.

    • With Wayne Industries, Lucius Fox, the CEO, is in on it, plus, if Wikipedia is any guide, it’s closely held. Plus, a lot of it would fly under the radar as it is broadly similar to things Wayne Enterprises actually does produce for sale. Basically, it flies under the radar since it isn’t obviously an illegitimate expense.

  9. Melanie Koleini

    I’ve no clue how/if the Justice League managed to keep the builders of their equipment secrete.

    Is it possible that all their neat gadgets are patented and Wayne industries is putting components of the league’s equipment into products for civilian and military use? Maybe the JL gets the newest toys and then the old designs are marketed to everybody else.

    • Considering what we see of their tech that would probably make warfare even bloodier. Of course any sane power would seek supremacy against a rather serious threat like the JL and would quickly notice if Wayne was producing the same tech as the JL. Incidentally that’s why things like this work so much better in fiction than in real life.

      I wonder what would happen if a political scientist tried to figure out the politics of DC. I know one’s written a book on political theories and zombies.

  10. This is a pretty common misunderstanding about the corporate world though, and probably why so many people fear corporations. They can seem these powerful, inscrutable monoliths, the operations and controllers of which are hidden from the public.

    I fear corporation because they are machines for turning moral people into monsters. The doctrine of fiduciary responsibility virtually requires one to pursue any legal (not moral) means of making a profit. So officers and other members of a corporation can pursue the most horrific schemes from mountaintop leveling to massive outsourcing of jobs overseas and feel that they have done their responsibility to their shareholders – they have maximized profits. And if something is both immoral and illegal, corporations can fund lobbyists to remove the latter difficulty – and once they have done so the former is not an issue.

    Additionally, corporations are effectively weakly immortal – they only die if someone does something. This gives them large financial advantages in resource accumulation – it is much easy to make your 101st million than your first. Look to the accumulated wealth of the Catholic Church for one example.

    • Your other points aside, it’s worth pointing out that the “accumulated wealth” of the Vatican is 1) a hollow shadow of its grandeur in the Late Middle Ages, when it was arguably the most powerful entity in Europe, and 2) largely in the form of art and other non-liquid objects. Really, in terms of material wealth and influence, the story of the Vatican has been one of slow decline for about eight hundred years now, occasionally punctuated by drastic losses such as those in 1536-39 and 1789, when the English and French respectively seized most of the Church property in their countries.

      The fact that it’s still around at all is admittedly impressive, but they’re far from a good example of a corporate-type entity accumulating ever more wealth and power over time.

    • To quote the movie Wall Street “Greed is good”. Well, maybe when the U.S. government is facing deficits and debt totaling tens of trillions of dollars, maybe, just maybe, greed isn’t as good as it is made out to be but ideally you can have both free enterprise and fiscal responsibility. That’s how things are supposed to work anyway.

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