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?"
Yep. Partly.
Ice Cream has no bones.
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.
Rev. Wright, is that you?
Why should a corporation be treated as an individual?
I will treat a corporation as an individual the day a corporation is sent to jail for stealing pension funds!
Or maybe it should be treated like the individuals who run corporations (and make decisions) but who never seem to be punished for their egregious misdeeds, because, "oh, it was the corporation that did it"?
Can I mod something +1 Scary if it's true but I wish it weren't?
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?
You have just put your finger on the root of the problem -- "The corporate entity" is a construct which should never have been permitted. The USA has become a socialist state for large corporations and a feudal state for humans.
Caveat Utilitor
Chinese corps accountable for their actions? Are you blind? The reason why there are some many lead-based product recalls, that huge liver drug problem over the last 18 months, and things like the pet food recall is because many chinese companies operate in an environment without repercussions where they can use toxins as "filler material."
Looking for a job?
Want your resume written professionally?
DON'T USE TUNAREZ!!!
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.
As a working technologist for the past two decades (I started in IT as a pre-teen) I have been content to let the suits figure out the economics and leave me to play with my toys. But, in the last few years since having a family of my own I have begun to see how unsustainable some "corporate cultures" really are and how a business could be seen as a way to find and keep people you think are "of quality" around yourself.
... the vote of people with control over special interests counts more than the vote of common people. That's because the lobbyists like to eat.
I don't think most businesses operate like this because we are developing a "management class" in America. These are people who graduate from school as bosses. They don't work their way up to become a boss or manager they come out of the factory sparkling and new as managers.
That creates a fundamental disconnect between the work force and management. It's one that creates a first and second class "citizenship" in the corporation. In many ways if you believe there is such a thing as a "corporate citizen" then this new path through the corporate ladder means that we have reverted to a feudal system in society.
In other words, we may be making "American Style" Democracy obsolete or unworkable. Democracy (in America) is already evolving
What this means is that corporate profit maximizing interests usually count more than individual or family interests over time. And that means whatever feeds profits best will win. If human rights feed profits, great. If family stability feeds profits, awesome. If healthy employees help profits, wonderful. But, how do retirement plans feed profits? How does universal health care help profits?
These things do help profits by creating a more stable society where individuals can take risks, make inventions, try new careers. But, they don't help any particular corporation. They don't help profits in the 18 month window. These are things that are financially stupid on anything but the 100 year scale.
Take the example of the educational systems in India. A net profit loss for fifty years that eventually lead to an economic boom in the 1990's. That's my big example of a long-sighted investment in the people that will not pay off any particular corporation in a time-line that can be appreciated by share-holders en masse... however a visionary could see it.
It is a sad fact that some of the things that help the citizens of a nation help all corporations that do business in that nation... and that means that a corporation that is doing those things is helping its competitor. That could mean that strategically undermining a nation may in fact boost profits for a corporate entity which can do things to hurt its competitors and find ways around that damage to make itself more competitive.
The goal of a government (in my view) should be to seek ways to balance the goals of profit making against long term goals. Both sets of interests serve human good because employees are citizens and so are share holders and they benefit all from profits in the short term and that is good. Governments can create incentives for long term investments in your competitors by creating short term incentives to do so using tools such as those dreaded taxes and tax breaks and inventing artificial economies such as the "Income Tax" industry which CPAs and income tax software vendors make their fortunes on.
The interesting thing is that Governments create jobs using red-tape.
[signature]
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.
Nobody knows what fascism really is.
The National Socialists of Germany were fascist and in a very real sense, so are all the communist states which implies socialism as well.
The definition that was quoted could encompass just about any organization.
As far as I can tell, if someone does not like an organization, they call it fascist. Heck, Greeenpeace meets the definition.
If one accepts that a corporation should be treated as an individual
... then when a corporation breaks a law, they should be removed from society for the duration of the applicable prison sentence. So instead of an OSHA fine, a corporation that has a fatal worker injury due to failure to follow standards should be on trial for involuntary manslaughter, and serious injuries should be treated as criminal recklessness. The problem arises when you stop to ask "What does everyone who worked for that company do during it's prison term?" or "What do you do the the assets of a company that earned a life sentence?"
The problem is, that corporations aren't people. Attempting to treat them as such is ludicrous.
We are all just people.
I know that action is taken quite often; here's a few examples of such violations. Contrary to conventional wisdom, boards tend to draw the line at violating the articles of incorporation, as their own stakes - their own interests - live and die with the corporation. You'll usually see those guilty of such actions readily served up by the company - witness Ken Lay, the Rigas', and many others. The board will look for their own interests, and those usually align with the majority of the stockholders (since they're elected by the stockholders).
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
OK I'll be that cynic. It makes perfect sense that such problems should arise, money is essentially a tool used to trade power, influence, and ownership. So when you have corporations with as much money as many powerful countries, that they would begin to exert the same levels of influence as countries. The problem with this is that they are countries with only one law: profit. More enlightened countries understand that by improving the lives of their citizens and the lives of citizens in countries close to them, they improve the value of the country itself. The real wealth of nations is in the quality of life of it's citizens, much more so then the exchange rate and quantity of it's currency.
When you have economic enities as powerful as nations that do not work to preserve and improve the intangible capital within their domain as a priority higher than simple short term monetary profit, then all society loses wealth. So really this is just a more enlightened enforcement of that requirement to "maximize profit".
We are all just people.
It makes me laugh when right wingers such as Glenn Beck attempt to co-opt the definition of fascism, applying it to those to whom they disagree with, when the word would be best applied to the very right wingers throwing the term at others. This seems like a strategy of misdirection and confusion, an attempt to make it more difficult to recognize the real fascists.
At the core of fascism is a worship of power, of strength. Fascists despise the weak. In the case of WW2 fascists, they sought to destroy the weak, the degenerates, the Jews, anyone who didn't fit their idea of strength.
The modern fascists also worship strength and power. They despise the modern welfare state because they see social programs as a way of supporting the weak at the expense of the strong, supporting the poor at the expense of the rich. They profess to support the free market, because in their view the free market punishes the weak, while rewarding the strong. The free market is survival of the fittest, and that idea is at the core of fascist thinking.
For right wingers to call liberals fascists is like Orwell's 1984, where "freedom equals slavery". Can you imagine Hitler supporting mentally challenged people? Of supporting the rights of homosexuals? Of supporting religious tolerance? Wake up folks! Learn to recognize a mind-fuck when you see it!
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
Of course there is. We could stop spending our tax money on corporate welfare and we could reign in corporate rights. The financial entity part of the equation only makes sense if it is closely controlled and if its rights do not trump those of the individual, which in fact was the original idea. The way it has become, the notion of corporate accountability is a joke -- the taxpayers or the consumers (often the same people) pay to clean up the mess while the corporation prospers. This system is broken, but not yet beyond repair.
Caveat Utilitor
I'll call bullshit on that one. There is one guy who knew EXACTLY what Fascism is because he invented it.
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
From the article, it sounds like the author wants to create an international governing body that ensures all corporations are playing by the same rules no matter where they're located.
So what country, INCLUDING the US, is going to want to turn control of corporate governance over to an international organization?
The article indicates that developing nations use local laws (or lack thereof) to attract corporations. So it sounds to me that developing nations won't sign, as they'll then lose the advantages that attract foreign companies and capital. And the "first-world" countries won't want to give control over to some entity (like the UN) that won't have THEIR interests in mind.
Sounds like a non-starter to me.
Personally, I think most of these "havens" will disappear over time anyway. Look at India. Was the major outsourcing center for the support and call industry. But as competition for skilled employees increased, wages increased, and suddenly other countries were "cheaper".
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.