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The Almighty Buck Businesses

Is 'Corporate Citizen' an Oxymoron? 373

Posted by CowboyNeal
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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Is 'Corporate Citizen' an Oxymoron?

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  • So, basically (Score:3, Insightful)

    by NJVil (154697) on Saturday May 31, 2008 @11:33AM (#23609827)
    this is advocating a form of fascism, right?
    • Re:So, basically (Score:5, Insightful)

      by Adambomb (118938) on Saturday May 31, 2008 @11:39AM (#23609879) Journal

      Fascism is a government, faction, movement, or political philosophy that raises nationalism, and frequently race, above the individual and is characterized by a centralized autocratic state governed by a dictatorial head, stringent organization of the economy and society, and aggressive repression of opposition. In addition to placing the interests of the individual as subordinate to that of the nation or race, fascism seeks to achieve a national rebirth by promoting cults of unity, energy and purity
      [1] [wikipedia.org]

      Yep. Partly.
      • Re:So, basically (Score:4, Insightful)

        by Anonymous Coward on Saturday May 31, 2008 @12:43PM (#23610415)
        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.
        • Re:So, basically (Score:5, Insightful)

          by Ray (88211) on Saturday May 31, 2008 @02:48PM (#23611429)
          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
      • Re:So, basically (Score:4, Interesting)

        by MacDork (560499) on Saturday May 31, 2008 @12:52PM (#23610511) Journal

        stringent organization of the economy and society, and aggressive repression of opposition. In addition to placing the interests of the individual as subordinate to that of the nation
        Yep. Partly.

        Yet, mostly not. FTFA:

        is often asserted as a weapon to try to persuade corporate managers and directors that they should take actions that benefit particular shareholders of a given corporation, regardless of whether those actions may impose high costs on creditors, employees, the communities where corporations have their operations, or other stakeholders

        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?)

        • Re: (Score:3, Interesting)

          by Adambomb (118938)
          As i mention in other replies, the big issue for me is the fact that this is all based on the subjective notions of "ethics and national interest". If we create such a system with great intentions, it must be created such that subjectivity cannot enter into the equation. The wrong person gets in power and bam, the system is the infrastructure to have massive influence over american corporations and vicariously, the economy. Its the wrong kind of step unless it is done flawlessly.

          Perfection is rare in humani
          • Re:So, basically (Score:5, Insightful)

            by shmlco (594907) on Saturday May 31, 2008 @02:55PM (#23611485) Homepage
            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".
            • Re: (Score:3, Interesting)

              by xappax (876447)
              <i>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".</i><br>
              <br>
              Unlikely. That's kind of like saying ghettos will disappear over time. Sure, when property is cheap, businesses and high paying jobs show up in a neighborhood. And soon it stops being a ghetto. But
    • Wow, that is a HUGE straw man [wikipedia.org] you have there.
      • Re: (Score:2, Insightful)

        by Dilaudid (574715)
        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.
        • by MacDork (560499) on Saturday May 31, 2008 @12:38PM (#23610365) Journal

          he's criticizing the article by saying it's fascism.

          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.

          I want to speak to you today on a question about the fiduciary obligations that corporate directors have, by law, in this country. In particular, I want to address a claim often made in the financial press, and by members of what a Delaware Court judge has recently called the âoecorporate governance industry.â This is the claim that corporate directors have a legal duty to maximize share value.

          What I hope you will take from my testimony today is that this claim is, at best, a misleading overstatement. At worst, this claim is simply false, but is often asserted as a weapon to try to persuade corporate managers and directors that they should take actions that benefit particular shareholders of a given corporation, regardless of whether those actions may impose high costs on creditors, employees, the communities where corporations have their operations, or other stakeholders, or sometimes even on the long run ability of the corporation itself to compete effectively for market share, or to develop the next technology

          That position is clearly very different from fascism, thus making GGP's post a straw man argument.

      • Re: (Score:3, Insightful)

        by Adambomb (118938)
        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 constitut
    • by russotto (537200)

      this is advocating a form of fascism, right?


      That was certainly my thought when I saw "it's time for the US to align its corporations to the interests of the nation".

      Though a cynic might argue that aligning the interests of the nation to that of its corporations is what is going on now, and that that is merely a different form of fascism.

      • Re:So, basically (Score:5, Interesting)

        by Original Replica (908688) on Saturday May 31, 2008 @01:40PM (#23610905) Journal
        Though a cynic might argue that aligning the interests of the nation to that of its corporations is what is going on now, and that that is merely a different form of fascism.

        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]

        Oil, soil, copper, and forests are forms of wealth. So are factories, houses, and roads. But according to a 2005 study by the World Bank, such solid goods amount to only about 20 percent of the wealth of rich nations and 40 percent of the wealth of poor countries. So what accounts for the majority? World Bank environmental economist Kirk Hamilton and his team in the bank's environment department have found that most of humanity's wealth isn't made of physical stuff. It is intangible....The rest of the story is intangible capital. That encompasses raw labor; human capital, which includes the sum of a population's knowledge and skills; and the level of trust in a society and the quality of its formal and informal institutions. Worldwide, the study finds, "natural capital accounts for 5 percent of total wealth, produced capital for 18 percent, and intangible capital 77 percent." Social institutions are most crucial. The World Bank has devised a rule of law index that measures the extent to which people have confidence in and abide by the rules of their society. An economy with a very efficient judicial system, clear and enforceable property rights, and an effective and uncorrupt government will produce higher total wealth.

        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".
    • by jcr (53032)
      Precisely.

      -jcr
    • by EWAdams (953502) on Saturday May 31, 2008 @12:38PM (#23610367) Homepage

      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.
    • The other way around. Fascism is where the citizens are ruled by Government in bed with Corporations. TFA is about making corporations responsible to the citizens. In essence, the concept is "the opposite", or at least antithetical, to Fascism.
    • by MrMr (219533)
      Cool: First Post and Godwin's law.
    • Re:So, basically (Score:5, Insightful)

      by catchblue22 (1004569) on Saturday May 31, 2008 @01:41PM (#23610923) Homepage

      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!

    • Re: (Score:3, Interesting)

      by Lord Ender (156273)
      Letter to shareholders:

      As part of our new mandate to be better corporate citizens, this quarter's dividend payment will be canceled, so that the money can be donated to the White House's new "family values" public service campaign. This campaign seeks to save our children from the evils of homosexuality by demonizing the lifestyle of these non-family groups.

      There will be no shareholder vote to cancel the dividend and donate to the family values campaign; this action is being mandated by the new Department o
  • by vertinox (846076) on Saturday May 31, 2008 @11:44AM (#23609917)
    In a sense they are right. If society on a whole is doing better than it did before than the environment the Corporations have to work in will improve and their profits will increase.

    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?
  • I'm pretty sure the Soviet Union tried that experiment already with unsatisfactory results.
  • by Zaphod-AVA (471116) on Saturday May 31, 2008 @11:50AM (#23609967)
    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.
    • I second that motion (Score:3, Informative)

      by IvyKing (732111)
      One thing left out in TFA, was that the shareholders of corporations are given a huge subsidy in the form of their liability for the misdeeds of the corporation are limited to the value of the stock. The limitation on liability was granted so that the corporation would act in the Public Interest, Convenience or Necessity.

      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

    • Those "charters" still exist, except in the US we call them articles of incorporation [wikipedia.org]. Violating these articles can lead to penalties up to and including dissolution of the corporation.
      • Those "charters" still exist, except in the US we call them articles of incorporation [wikipedia.org]. Violating these articles can lead to penalties up to and including dissolution of the corporation.

        Forgive my ignorance, but has any corporation in recent history actually been penalized for any such violation? Has any been dissolved for same?

        Curious,

        • Good question (Score:3, Interesting)

          by IvyKing (732111)
          I haven't heard of any penalties or dissolutions either - may happen with corps too small to be of concern to the typical news media. Closest thing to dissolution for most corps is bankruptcy.

          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

        • by LynnwoodRooster (966895) on Saturday May 31, 2008 @01:21PM (#23610733) Journal
          I know that action is taken quite often; here's a [wbai.org] few [findarticles.com] 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).
          • Interesting, thank you.

            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.

            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

  • by Anonymous Coward on Saturday May 31, 2008 @11:50AM (#23609971)
    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.
    • Bravo. Well put... Laws or actions targeted at single entities (or a small, select class like those deemed making "windfall profits") are unconstitutional, equal protection clause and all...
    • by colfer (619105)
      A corporation has a responsibility to follow its charter, which usually includes maximizing profits but can include other goals as well. That's how I understand it.
    • by Rolgar (556636) on Saturday May 31, 2008 @12:55PM (#23610545)
      If you make the penalties sufficiently harsh for the severity of the crime, and can prosecute the organization and individuals involved, and reduce the number of appeals so the company can't expect to indefinitely delay their punishment, the two responsibilities will align, because lawbreaking would become unprofitable. I'm all for due process, but the appeals system is abused to no end because it's like a whole second chance. More appeals judges need to dismiss frivolous appeals with an increase in penalties so the only appeals will be truly questionable decisions.
    • Corporations have only two responsibilities: Maximize profits, and follow the law.

      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,

  • by Animats (122034) on Saturday May 31, 2008 @11:51AM (#23609977) Homepage

    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.

    • by jcr (53032)
      Companies used to fear public opinion.

      Most of them still do. That's how shakedown artists like Jesse Jackson make their living.

      -jcr
    • by homer_s (799572) on Saturday May 31, 2008 @12:41PM (#23610397)
      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.

      Nah, I think the depression was caused by pirates and ninjas.
      That makes more sense than your theories.
    • Re: (Score:3, Informative)

      by puppetman (131489)
      The Soviet Union was technically a state-capitalist society, where the government (AKA state) owned the means of production.
    • by w3woody (44457)
      You talk as if each of these concepts (communism, capitalism, socialism, monarchy, oligarchy, etc) are monolithic, centrally administered governmental structures which have certain established goals (such as "deliver[ing] an ever-higher standard of living"), and how individuals are organized within each of these governmentally administered programs isn't what matters, only how much the central elite few administering each of these economic programs allow to 'trickle down' to the masses in order to keep the
  • It's up to people to elect governments that will effectively regulate corporate behaviour - to set the rules of the game then let them play.

    One of the biggest distortions that is happening in politics is that corporations have more resources and organization than ordinary people or even most ad-hoc groups of people, so the corporations can apply these massive resources to buying influence and opinion, through massive issue-framing and
    marketing campaigns, through direct lobbying, and thus they can buy the st
    • Corporations are self-interested. And plenty of them go out of business when their entire concern is making money. They're not going to engage in any risky behavior like putting something ahead of survival.

      What you'd get would be a lot of clever lawyering to get around whatever regulations were put in. Then a lot of lobbying to do away with it.

  • by greenguy (162630) <estebandido.gmail@com> on Saturday May 31, 2008 @12:10PM (#23610137) Homepage Journal
    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.
    • by MBC1977 (978793)
      Ok, so what happens when you get employees and clients who just want to make money? I'm not knocking your idea per se, because its actually an interesting tangent. But the bottom line is that our society on a whole is based upon improving one's status. The effective way (currently) to do so is via maximizing the amount of cash in your pocket (however that individual or group) chooses to do so.

      Last time I checked, you could not just wish your way into a car, house, vacation, etc. (and i'm not even talk
      • Re: (Score:3, Interesting)

        by greenguy (162630)
        Of COURSE you have employees who want to make money. That's the whole point. To clarify, let's pull out two sentences from your post:

        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.

    • Re: (Score:3, Insightful)

      by ChaosDiscord (4913) *

      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.

      Indeed. And like any stupid, wild animal, if it harms someone just minding their own business, it should be judged a public danger and killed. If it impacts someone's livelyhood, it should be judged a public nuisance and killed. We don't do that nearly often enough.

      Come to thin

  • Balance is the Key (Score:3, Insightful)

    by FurtiveGlancer (1274746) <AdHocTechGuy AT aol DOT com> on Saturday May 31, 2008 @12:11PM (#23610145) Journal
    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.
  • That is what government regulations for. The social contribution from corporation comes in the form of corporate taxes that the government should apply for public good, like invading disobeying countries, spying on everybody and supporting countries that have never gave us any good, only troubles. /youknowwhatoff

    The actions of corporation on the behalf of the society are voluntary actions of their owners. They do not benefit directly the owners but there are long term benefits in this life and hereafter fo
  • by grandpa-geek (981017) on Saturday May 31, 2008 @12:23PM (#23610229)
    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.
  • by Zarf (5735) on Saturday May 31, 2008 @12:24PM (#23610237) Journal
    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.

    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 ... 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.

    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.
  • It's not really a problem with corporations, the problem is when you take away the accountability of the owners. That's the major loophole. Limited liability is one hell of a loophole...
    • by istewart (463887)
      And also granted by the government. Capitalism is just as much of an engineered society as Soviet communism was, it's just somewhat less monolithic.
  • The problem with asking a corporation to do anything other than, essentially, make money is that nothing else is going to be as objective. Even if a corporation doesn't exist to make money (a non-profit, or example, or a corp actually focused on service instead of profits), making money is fundamental to their existence. Aside from undue help from the government, the corporation won't last if they can't at least maintain value.

    If we start asking corporations to do something else as well, that something e
    • I left out a point I wanted to make, but that's okay. I think that the counter to the problems people often see with corporation acting to maximize shareholder value is that there is no timeframe established for that goal. Personally I believe corporations should work to maximize shareholder value in the long term, not short term. That means not focusing on the numbers for this quarter, but having a vision 3-5 years out, even if the execs will have left the company by then.

      We count on things like a corpor
  • by OldHawk777 (19923) *
    So who cares, who is going to do something ... as soon as I can go off planet ... I am getting lost in the new wilderness and ain't ever coming back.

    Yo! ET call me ASAP. I wanna leave this company store way far behind me ... So, no matter how big their prick is ... I am safe from infection or worse.
  • Serve the owners! (Score:3, Insightful)

    by readin (838620) on Saturday May 31, 2008 @04:47PM (#23612323)
    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.

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