Are Firms Today’s Low Class?

In the ancient world, there were different classes of people, who were treated differently. Some had more freedoms than others, such as to own property, make contracts, start lawsuits, speak in public forums, or travel on their own. On the street, some had to stay silent, to wear distinctive clothing, to give way to others, and to show on demand who vouched for them.

Today we are proud that we make fewer such distinctions among individuals. (Though we do distinguish kids and convicts.) But that may be less because of our liberality, and more because of the rise of large organizations, of which the ancient world had far fewer. Today we require many distinctions between individuals, for-profit firms, non-profit orgs, and government agencies.

For example, we ban many kinds of discrimination by firms that we allow by individuals, and we hold firms to higher standards of truthfulness. We require more public disclosures by them. And many want to further limit their abilities to speak in public debates.

We today are horrified to hear that an unwed mother might have once been required to wear a “Scarlet A” in public to display her status, and are similarly horrified by rumors of a Chinese “social credit” system to weigh many indicators of social approval and disapproval. (Though we seem okay with credit scores, relating only to our dealings with firms.)

But we seem fine with legally requiring firms to disclose Environmental, Social, and Governance (ESG) scores, which score firms by adding up dozens of particular “do-gooder” indications. A social credit score for firms. So far laws have not yet required us to shun the firms that rate poorly, though many suspect such laws are coming. But such scores today clearly help mobs to coordinate to punish firms, just as Scarlet As do for individuals.

Government agencies, in contrast, often have more privileges than both firms and individuals. For example, US police have “qualified immunity” protecting them from lawsuits. Government, academic and think tank studies are taken at face value, yet firm versions are considered suspect. Non-profits like universities are allowed to collude in ways that firms cannot.

Thus we today still do maintain formal class ladders in custom and law, but more ladders of orgs than of people. Now you might say this is fine, as class ladders are mean to individuals, making them feel bad, but organizations can’t feel bad. But in fact our class ladders of orgs influence how people in those orgs feel.

As individuals today largely gain status via association with orgs, the status of those orgs directly effects the status of individuals. So when we shame or honor an org, we also shame or honor the people associated with it. Formal class ladders continue today.