Slashdot Mirror
Is 'Corporate Citizen' an Oxymoron?
theodp writes "Citing expert testimony from a recent House Science Subcommittee hearing on Globalizing Jobs and Technology, The Economic Populist challenges the conventional wisdom that maximizing profits should be a corporation's only responsibility, suggesting it's time for the US to align its corporations to the interests of the nation instead of vice versa. Harvard's Bruce Scott warns that today's global economy is much like the US in the later 19th century, when states competed for funds generated by corporations and thus raced to the bottom as they granted generous terms to unregulated firms. Sound familiar, Pennsylvania? How about you, Michigan?"
this is advocating a form of fascism, right?
I'm pretty sure the Soviet Union tried that experiment already with unsatisfactory results.
A Corporation's rights and responsibilities should be listed in a charter, and failing to uphold their responsibilities should cause them to lose their rights.
The lack of a charter has caused corporations to grow to be superior to nations, but with little or no accountability.
Corporations have only two responsibilities: Maximize profits, and follow the law.
It is our responsibility to make the law just.
This is how a democracy harnesses the power of greed to provide justice and prosperity to all.
From 1917 to about 1980, fear of communism helped keep capitalism in line. During that period, capitalism had ideological competition, and there was a very real fear on the part of business owners that their companies might be nationalized. During that period, most telcos were state-owned. Britain nationalized the steel and coal industries during the 1950s, and most of the rental housing units in the country were state-owned. During the Great Depression, the U.S. Government ran many programs that employed people and built things, a form of socialism.
For over a century, communism was taken seriously as an alternative to capitalism. (Yes, it never worked all that well in Russia. Neither did monarchy, democracy, capitalism, or oligarchy. Russia did better in its communist period than before or since.) During that period, when it faced competition, capitalism had to deliver an ever-higher standard of living. Which it did. There was more talk of "corporate responsibility" during that period than there is now.
Companies used to fear public opinion. That ended during the Reagan administration. (This is why Reagan was such a darling of business.)
The triumph of unbridled capitalism may be temporary. Something similar happened in 1900-1929, when railroad and power companies ruled the world. That ended in the Depression, and for the next fifty years, businesses were strongly regulated and kept in line.
Wait, are you blaming corporations for the crap that *you* bought?
Also, I have arbitrarily determined that your pay is excessive. Please hand an additional 10% your income over to the government so that they can put it to better use.
Nerd rage is the funniest rage.
No it's not. It's a rhetorical question. Read the article you linked to. If it were a straw man, he would criticise fascism, claiming that that was what the article espoused - he's not doing that, he's criticising the article by saying it's fascism.
Today, the very concept of a corporation entails the idea of profit maximization. That's why singling out one (Nike, Monsanto, Microsoft) and getting angry at it for making short-sighted moves in the name of profit is like getting angry at an alligator for eating meat. What did you expect? That's what it does.
"Corporate citizenship" or "corporate responsibility" are nothing more than marketing slogans. You can't ask an alligator to eat veggieburgers, and you can't ask a corporation to play nice. Even if it actually did so, its competitors would roll over it.
If you want an economy that responds to more than the richest 1% of 1% of the population, you need economic entities that are qualitatively different -- that measure success differently. That doesn't mean more government interference, because the state and the corporation have the same flaws, for the same reasons. The state and the corporation are rivals, not enemies.
Rather, what we need are economic bodies that are expressly designed in the interests of their employees and clients. The effective way to do it is through cooperatives.
There are countless examples that demonstrate that employee control works. It avoids practically all the evils of the corporate model: outsourcing, management/labor tension, secrecy, poor working conditions, creative accounting, and the list goes on.
Co-ops automatically are what corporations want you to believe they are. A co-op is a citizen of your community in a way a corporation never could be, because all its owners are citizens of your community.
What if I do the same thing, and I do get different results?
IMHO, most long term successes in business have balanced profit and citzenship. Look at businesses that have been around for 30+ years and you'll find that most try to balance their profit with philanthropy. One example that comes to mind is Target (formerly Dayton Hudson). Both corporately and at each retail store they have a policy of supporting worthy causes. WalMart also has a similar policy, but doesn't seem to apply it to it's own employees. ~
One may argue the motives of corporate philanthropy, but it does seem to help healthy businesses stay in the fight over the long haul.
Invenio via vel creo
Yes, those excessive profits. Never mind that for every $1 in profit EXO makes they pay $3 in taxes. So let's really aim that 'middle finger' squarely where it belongs - the Government.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
The current corporate governance situation began with the "shareholder rights" movement that started in the 1980's. That movement was fostered by corporate raiders who had no long term interest in the corporations they attacked. They wanted to get in, make a quick profit, and get out.
The movement was focused on disregarding the rights and interests of the non-shareholding stakeholders in a corporation -- the communities in which they operate, their employees, their customers, those affected by their impacts on the environment and markets, and possibly others.
Those rights and interests had previously been protected by unwritten understandings, the so-called "social compact". The shareholder rights movement effectively broke the social compact because there was no legally-enforceable impediment to their doing so.
The way to fix this is to restore the social compact and protect the interests of non-shareholder stakeholders by law, regulation, or contract. This means restoring the power of unions, strengthening regulation of markets, and providing safeguards for the interests of communities, especially those that provide benefits to corporations without written agreements reflecting the reciprocal obligations of those corporations.
Its really not in the idea itself, its in the implementation. This to me sounds like one of those ideas that sounds great on paper, until the human element is involved. They would have to be extremely careful to balance the government influence on corporations, cost of running the system, and the ethics of it veryyy careful and ensure no room for someone to turn it into a control panel for the countries economy.
I do not trust us to be able to do that. The founding fathers sure as hell tried in the constitution, and they seemed like fairly reasonable men. Didn't keep numerous administrations from ignoring it when its considered "best for the nation" in the controlling parties opinion.
Its the subjectivity of it all that makes me leery of any such system.
Ice Cream has no bones.
Nowhere in that article does the author advocate fascist corporatism. A straw man is when you create a new position that your opponent is not advocating, and then attack that new position. The position of the article is quite clear, although it isn't sound byte short like GGP's post.
That position is clearly very different from fascism, thus making GGP's post a straw man argument.
A corporation is a "pretend person" created by a governmental process. There are various kinds, but they're all imaginary: charities, educational corporations, membership associations, foundations, etc. Corporations have no existence beyond what the government chooses for them, so their functions can be adjusted by the government as necessary.
No fascism about it.
I piss off bigots.
Communism is a whole other thing. Go back to Poli Sci 101.
I piss off bigots.
They don't exist in natural law; they are a fiction established by legislation. We can set them up to do anything we want them to do (hence nonprofit corporations, etc.). There's no reason why we can't change what they're supposed to accomplish.
I piss off bigots.
The people of Michigan want fair wages and a clean environment to live in. How dare they! They'll eat poision and breath coal dust and LIKE it or else all the companies will leave and they will die.
Blar.
unions are as capitalistic as it gets! plumbers getting together and controlling plumbing prices is no different than oil companies getting together and deciding oil prices.
If the local manager of a store chain with 100,000 employees forces his 20 underlings to work night shifts without extra pay, the demand is typically along the lines that the board of directors be imprisoned.
No United Nations Secretary General will ever be demanded by those same people to be imprisoned because of anything, much less a UN deputy in some far-off country deciding to sell a container of food aid to the highest bidder.
Selective applicability of the law depending on whom you love and hate - interesting.
What a strange and bizarre unreality Mr. Scott lives in. I wonder what color the sky is there. States competed for corporate funds? While many states certainly tried to extract taxes out of corporations in the 19th century, I don't think that's what he meant. A government "granting generous terms" by not regulating firms is like the mafia granting generous terms to the corner deli by not collecting protection racket extortion.
p.p.s. The idea that corporations must maximize profits is a new one. It came about because some malcontent stockholder sued their corporation for engaging in philanthropy.
Don't blame me, I didn't vote for either of them!
Even if you take an amoral approach, the responsibility of a corporations is to serve its owners. The most obvious way is by making money. But owners have other interests as well. As an owner I'm not well served if the corporation pays be a $10 dividend it earned by polluting my air and giving me cancer. As an American owner I'm not well served if my corporation pays me a $5 dividend it earned by selling advanced weaponry to China.
But taking a more enlightened view, owners of corporations are moral creatures who have moral obligations and moral duties. Our corporation should have the same moral obligations and moral duties we do because the corporation is acting our our behalf.
So yes, corporations should not just be good corporate citizens, they should also behave morally.
I often don't like the choices people make, but I like the fact that people make choices. That's why I'm a conservative.
I believe the issue is that cooperate entities in the US (and apparently elsewhere) have been given essentially all the rights of an actual person. But for the most part the people leading the corporation are protected from personal liability for the actions of the corporation. Furthermore there don't seem to be many ways to hold a corporation responsible either. You can't jail or execute a corporation. I seem to recall there was a time when the government could dissolve a corporation but that changed a long time ago.
The point of the article (to try to get back on topic) is that currently the people behind corporations use the argument of fiduciary responsibility as an excuse to base all decisions on short term financial gain and stock price. Regardless of whether those decisions are counter to the interests of the people of the planet, nation, or state in which they operate. Meanwhile, to attract business national and state governments keep reducing the responsibilities placed on corporations.
Some privacy policy Slashdot.
Hey, military leaders are intelligent. Nobody was pretending to call it 'military wisdom' or anything.