Although his prophesies did not come true within the time frame he gave, many
enduring images remain from George Orwell's famous book 1984. For
example, we still refer to government as "Big Brother" when it gets
too powerful or too intrusive.
To my mind, however, the most enduring, and most frighteningly true concept
that carries through to today from 1984 is "Newspeak", the language
Big Brother required the populace to use. The structure and vocabulary of the
language were designed to actually limit the thoughts of those using it. Thus,
Big Brother hoped to control the very thoughts of the people he ruled.
To my dismay, I see examples of Newspeak all around us nowadays. The smallest
package of a cleaning product is called the "large" size. (Bigger ones
are "jumbo", etc.) A parking meter sign says I get a half hour for a
dime, but for my "convenience" it will give me a half hour for a
quarter, as well. If they were really worried about my convenience, an hour and
fifteen minutes for a quarter, would do just fine, thanks.
Newspeak In Your Mail
The most glaring example I see of Newspeak in the corporate world is the
"Shareholders' Rights" clause so often seen in corporate charters
these days. If you've been investing in stocks for several years or more, you've
probably at one time or another gotten a proxy in the mail asking you to vote
for a Shareholders' Rights amendment to some company's charter.
The line you'll get from management is that the measure is to prevent a
corporate raider from coming in and taking over the company at a price that's
unfair to you. In fact, nothing could be further from the truth.
No one needs to protect you from outside corporate raiders. In order to buy
enough stock to control a company, a raider must go into the open market and buy
a large percentage of the shares outstanding. The very act of buying in such
large amounts drives the price of the stock up, increasing the value of your
investment. As the stock rises, each stock owner gets to make his or her own
decision about when the price is right. If not enough people think the price is
right, the raider can't buy enough stock, and can't take control of the company.
It's that simple.
Your Right to Keep Lousy Management
What Shareholders' Rights measures do is use artificial means to make it
impossible for a raider to acquire enough stock to gain control of a company's
board of directors. The company usually accompanies this change of charter with
another measure that rotates the election of board members so that current
shareholders can't vote to throw out the whole group of directors at once. The
combination of these measures makes a company's board and management virtually
immune from replacement no matter how badly they perform. That's because small
groups of individual shareholders can seldom muster the organization and
resources it takes to carry on a proxy fight over the typical six year period it
would take to gain a majority on the board of directors. You can't fire
management until you replace the board members who have a too cozy relationship
To add insult to injury, management actually spends shareholders' own money
to fight the proxy battle to keep themselves in power.