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Is 'Corporate Citizen' an Oxymoron?
Posted by
CowboyNeal
on Sat May 31, 2008 10:31 AM
from the obligatory-lincoln-quotes dept.
from the obligatory-lincoln-quotes dept.
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?"
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So, basically (Score:3, Insightful)
Re:So, basically (Score:5, Insightful)
Yep. Partly.
Parent
Re:So, basically (Score:4, Insightful)
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.
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Re:So, basically (Score:5, Insightful)
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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Re:So, basically (Score:4, Interesting)
Yet, mostly not. FTFA:
Should Sony skip free with a few vouchers after committing half a million instances of felony computer trespass? GGP sure thinks so...
(Yeah, that last part's a straw man, but so is GGP... honestly, how does total crap like that get modded insightful?)
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Re: (Score:3, Interesting)
Perfection is rare in humani
Re:So, basically (Score:5, Insightful)
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".
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Corporate accountability equals fascism? (Score:3, Informative)
Re: (Score:3, Insightful)
I do not trust us to be able to do that. The founding fathers sure as hell tried in the constitut
Re:Corporate accountability equals fascism? (Score:5, Insightful)
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.
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Corporations are a government fiction. (Score:5, Insightful)
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.
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Re:So, basically (Score:5, Insightful)
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!
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Re:So, basically (Score:5, Insightful)
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"?
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Re:So, basically (Score:5, Insightful)
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Re: (Score:3, Insightful)
People have a right to freely associate and operate collectively. A corporation is just a formal way of doing this.
The AARP, the AFL/CIO, the city of Seattle, and the Democratic Party are all formal corporations with bylaws and rules and recognized legally.
So should these "constructs" not be permitted?
Re: (Score:3, Interesting)
Re:So, basically (Score:4, Interesting)
corporation personhood is an abomination. I'd be happy to see it go. having a taxable entity is great, but having a nearly impervious shield to liability most assuredly is NOT.
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Re: (Score:3, Insightful)
Because that allows the owners of the corporation to shift the blame for their actions (or 'limit the liability' to use the common euphemism).
Re:So, basically (Score:5, Insightful)
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.
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Re:So, basically (Score:4, Interesting)
I disagree. I exactly think it should be the shareholders who should be sued, as a group. If the ship's route and scheduling, crew size, and oil spill first response measures are dictated by "maximizing the shareholder's profit" at the (implied) bidding of those shareholders. The shareholders are owners of the company, they should be involved in any legal proceedings against it. If a million different people own the company, then a million different people will be pissed when they have to write a check to pay for the poor behavior of that company, and they will be more likely to take action to prevent future poor behavior then if they are barely aware of the problem, because all they every look at is the stock price.
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Re:So, basically (Score:4, Insightful)
If greedy corporate decisions cause a company to incur a billion dollars in fines due to an oil spill, ultimately shareholders DO write a check. Their share price tanks. The only difference is each shareholder put the money in up front, denoting the level of accountability they're willing to accept. That's part of the risk-reward of buying stock in a company. You decide how big of a role you're going to take in the good and the bad.
On the other hand, you can't haul a million people to jail because of criminal negligence on the part of a couple board members. For that, courts pierce the veil of liability and level criminal charges against the individuals. It happens all the time.
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Re:So, basically (Score:5, Insightful)
... 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.
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Re:So, basically (Score:5, Insightful)
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Re:So, basically (Score:5, Interesting)
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. [corporations.org] 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. [reason.com]
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".
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Economics is not a closed system (Score:3, Interesting)
Through better education a society will gain individuals who will generally be able to earn more money and therefore consume more products and allow for a diversity in competing genres of products.
As in, it takes a bit of education for certain hobbies and if the population on a whole is more rounded it opens more niches and markets for new revenue streams.
Secondly, a corporation serves the interest of its shareholders in the end even if it fails to make a profit they can still choose to keep the current CEO and board if they don't vote them out (that is rare though) and the self interest of shareholders often include their own well being so if you own shares in a factory and they produced chemicals that caused the shareholder or someone they know cancer, they might take it up with the board of directors even though change in company policy might cause a loss in profit.
Having money does you no good if you are dead and dying right?
Bring back the charter. (Score:4, Insightful)
The lack of a charter has caused corporations to grow to be superior to nations, but with little or no accountability.
I second that motion (Score:3, Informative)
Another issue left out of TFA, was which stockholders interests are being represented by the board of directors? A stockholder who plans on holding the stock for the long term is going t
Good question (Score:3, Interesting)
What may be the ultimate penalty is if dissolution leads to the revocation of the limited liability clause of virtually all corporations - institutional investors would be paying a lot more attention to management following the law if they knew they would be on the hook for knowing of illegal actions undertaken by m
Re:But does breaking articles lead to real penalti (Score:5, Informative)
Parent
Enron perhaps not the best example (Score:3, Informative)
Interesting, thank you.
I'm not familiar with the Rigas, but as far as Ken Lay is concerned, one could probably argue that the board didn't abandon him until it was far too late to do anything prod
Two responsibilities (Score:4, Insightful)
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.
Re:Two responsibilities (Score:4, Interesting)
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MBA training says ignore law if you can (Score:3, Interesting)
I don't have a link handy, I'm afraid, but I've heard from friends and read elsewhere that numerous MBA programs (at least in the US) actively advocate getting away with as much as possible in pursuit of profits. "Oh yeah, and don't break the law, kids (wink wink, nudge nudge)." It's not necessarily about following the law, instead it's about getting away with it when you don't.
Cheers,
This is what happens without communism (Score:5, Insightful)
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.
Re:This is what happens without communism (Score:4, Funny)
Nah, I think the depression was caused by pirates and ninjas.
That makes more sense than your theories.
Parent
Re: (Score:3, Informative)
This is a question of definitions. (Score:5, Insightful)
"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.
Re: (Score:3, Interesting)
So do most people who work at corporations, though the majority never reach those dreams.
You may dislike corporations, but history has shown they are very effective at making money, and at the end of the day that is what matters to the shareholders.
So, the corporation is an economic structure that is good at putting wealth in the hands of people who are not the ones actually generating it.
The solution is to make the workers and the shareholders the exact same people, so that the people who generate the wealth get to benefit from it. The economic structure that allows that to happen is called a cooperative.
Balance is the Key (Score:3, Insightful)
One may argue the motives of corporate philanthropy, but it does seem to help healthy businesses stay in the fight over the long haul.
Governance should extend beyond the corporation (Score:5, Insightful)
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.
Private versus Commerical interests... (Score:5, Interesting)
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.
Serve the owners! (Score:3, Insightful)
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.
Re:I was hopeful... (Score:4, Insightful)
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.
Parent
Re: (Score:3, Insightful)
Yes, those excessive profits. Never mind that for every $1 in profit EXO makes they pay $3 in taxes [exxonmobil.com]. So let's really aim that 'middle finger' squarely where it belongs - the Government.
Re:HIV/AIDS (Score:5, Funny)
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Then you need to stop being pretty sure. (Score:5, Insightful)
Communism is a whole other thing. Go back to Poli Sci 101.
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Corporations are defined by government fiat. (Score:4, Insightful)
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.
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Oh noes! (Score:4, Insightful)
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Re: (Score:3, Informative)
Re: (Score:3, Insightful)