Is 'Corporate Citizen' an Oxymoron? 373
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?"
So, basically (Score:3, Insightful)
Re:So, basically (Score:5, Insightful)
Yep. Partly.
Aligning corporate interests with the nation? (Score:2, Insightful)
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.
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.
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: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.
Re:Corporate accountability equals fascism? (Score:2, Insightful)
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"?
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.
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.
Re:I was hopeful... (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:So, basically (Score:5, Insightful)
Re:So, basically (Score:5, Insightful)
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.
Re:Corporate accountability equals fascism? (Score:3, Insightful)
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.
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.
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.
Then you need to stop being pretty sure. (Score:5, Insightful)
Communism is a whole other thing. Go back to Poli Sci 101.
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.
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.
Oh noes! (Score:4, Insightful)
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.
Re:Michigan's current problems... (Score:2, Insightful)
Re:So, basically (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)
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:So, basically (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?
Double standards from Slashdotters (Score:1, Insightful)
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.
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.
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
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".
Unreality (Score:2, Insightful)
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.
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.
All the rights, but few of the responsibilites (Score:2, Insightful)
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.
Re:So, basically (Score:2, Insightful)
Modding the parent as Flamebait seems harsh, methinks humor was the goal. I actually thought the parent was correct based on the much cited quote from Mussolini:
But I just learned (from Wikipedia so it must be true) that he didn't say that. It's too bad, I liked being able to use the term Fascist to slander those who treat cooperate profits as if it were the ultimate Truth of the universe.
Whatever it's called, the preamble of the US constitution is "We the People", not "We the Legal Entities," 'nuff said.
Re:Of course not (Score:3, Insightful)
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.
Re:This is a question of definitions. (Score:3, Insightful)
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 think of it, I'd vote for a 10 day corporate hunting season. To protect the herd as a whole, maybe have a "no killing any corporation with a market value of less than a billion US dollars" rule.
Re:So, basically (Score:3, Insightful)
Individuals don't lose their free speech rights just because they come together as shareholders to form a corporation.