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Is 'Corporate Citizen' an Oxymoron?

CowboyNeal posted more than 5 years ago | from the obligatory-lincoln-quotes dept.

The Almighty Buck 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?"

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So, basically (3, Insightful)

NJVil (154697) | more than 5 years ago | (#23609827)

this is advocating a form of fascism, right?

Re:So, basically (5, Insightful)

Adambomb (118938) | more than 5 years ago | (#23609879)

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 (4, Insightful)

Anonymous Coward | more than 5 years ago | (#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 (3, Interesting)

MacDork (560499) | more than 5 years ago | (#23610511)

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:So, basically (2, Interesting)

Adambomb (118938) | more than 5 years ago | (#23610593)

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 humanity. I dont trust us to do it properly without it being a hair trigger away from being perverted into something horrible. It might NOT be perverted but what politician doesnt like more power and influence?

The odd one yes, but most people like that tend to not get to the upper echelons of politics in any event.

Re:So, basically (0)

Anonymous Coward | more than 5 years ago | (#23609905)

That's a mighty large leap. Corps should be more accountable for their actions. Besides, Chinese corps are doing it and whipping our ass in the process.

Re:So, basically (4, Insightful)

stretch0611 (603238) | more than 5 years ago | (#23610221)

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."

Re:So, basically (0)

Anonymous Coward | more than 5 years ago | (#23609911)

no, communism.

Corporate accountability equals fascism? (2, Informative)

MacDork (560499) | more than 5 years ago | (#23609951)

Wow, that is a HUGE straw man [wikipedia.org] you have there.

Re:Corporate accountability equals fascism? (2, Insightful)

Dilaudid (574715) | more than 5 years ago | (#23610067)

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.

Re:Corporate accountability equals fascism? (4, Insightful)

MacDork (560499) | more than 5 years ago | (#23610365)

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:Corporate accountability equals fascism? (2, Insightful)

Adambomb (118938) | more than 5 years ago | (#23610303)

Its really not in the idea itself, its in the implementation. This to me sounds like one of those ideas that sounds great on paper, until the human element is involved. They would have to be extremely careful to balance the government influence on corporations, cost of running the system, and the ethics of it veryyy careful and ensure no room for someone to turn it into a control panel for the countries economy.

I do not trust us to be able to do that. The founding fathers sure as hell tried in the constitution, and they seemed like fairly reasonable men. Didn't keep numerous administrations from ignoring it when its considered "best for the nation" in the controlling parties opinion.

Its the subjectivity of it all that makes me leery of any such system.

Re:So, basically (0)

Anonymous Coward | more than 5 years ago | (#23609953)

If one accepts that a corporation should be treated as an individual, any laws or mandates that coerce them into an action violate their rights as an individual. So, yes. This does advocate a form of fascism.

Re:So, basically (5, Insightful)

boneglorious (718907) | more than 5 years ago | (#23610111)

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"?

Re:So, basically (4, Insightful)

clang_jangle (975789) | more than 5 years ago | (#23610209)

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.

Re:So, basically (0)

Anonymous Coward | more than 5 years ago | (#23609959)

You didn't read the article, didja?

It's advocating corporate responsibility to protect themselves from themselves. Or put another way, it's making corporations look further than just "what have you done for me today".

It's also advocating corporate responsibility to the tune of stopping things like off-shoring production of things like, oh, I dunno, night vision glasses and sensitive electronics.

They might be wanting to stop CEOs from cashing in millions of dollars when they don't do a damned thing.

Re:So, basically (1)

Adambomb (118938) | more than 5 years ago | (#23610213)

The problem with such legislation is who is determining what is in line with the nations interests, how the controlling players think the nations interest has that change over time. Such a system of corporate management could be easily perverted. Theres also the other angle where such a system could be an entirely worthless waste of taxpayer dollars and not ever be properly enforced.

Not saying its a bad idea to create such a system, it would just have to be VERYYYY carefully balanced between governmental influence over the corporations, the overhead of running the system, and ethics. Consider the constitution, and how many different possible interpretations people use to support their arguments in government.

I dont trust the current set of politicians on any side to want to be able to balance a checkbook let alone those considerations.

Re:So, basically (1)

russotto (537200) | more than 5 years ago | (#23610003)

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 (0, Flamebait)

clang_jangle (975789) | more than 5 years ago | (#23610147)

Though an astute observer might argue that aligning the interests of the nation to that of its corporations is what is going on now, and that that is what make our current system fascist.

There, fixed that for you. :)

Re:So, basically (0)

Anonymous Coward | more than 5 years ago | (#23610055)

Yes, because if it was aligning the nation with the corporations, it would be corporatism, and if it was taking ownership of the corporations it would be communism.

Re:So, basically (0)

Anonymous Coward | more than 5 years ago | (#23610205)

Yes.

But only in the same way that breathing air advocates fascism because fascists also breathe air.

Corporations are a government fiction. (4, Insightful)

EWAdams (953502) | more than 5 years ago | (#23610367)


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.

Atlas Shrugged (0)

Anonymous Coward | more than 5 years ago | (#23609841)

Let the capitalist engine run unfettered.

Guess you didn't play Bioshock... :-) (1)

EWAdams (953502) | more than 5 years ago | (#23610483)


That's what I really want: totally unregulated germ warfare laboratories!

The capitalist engine DID run unfettered until about WWI. Children in the mines, unsafe working conditions, rampant pollution, anybody who wants to unionize gets fired, women paid less than men for doing the same job... yeah, let's bring back them good ol' days.

HIV/AIDS (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#23609843)

This is why there hasn't been a publicly release cure for AIDS even though the drug companies discovered it 20 years ago. It is no surprise that the especially well connected and rich never die of AIDS (like Magic Johnson) while the poor in Africa are decimated by it. It wouldn't surprise me if those same drug companies created AIDS just so that they could continue to sell their treatments. Standby for the next disease that they will create/treat.

Re:HIV/AIDS (1)

couchslug (175151) | more than 5 years ago | (#23610035)

"It is no surprise that the especially well connected and rich never die of AIDS (like Magic Johnson) while the poor in Africa are decimated by it."

The rich and well-connected don't die of many diseases that kill millions in cultures that produce failed states.

Africans are responsible for Africa, and results vary by country. Adults who reject modern science and prefer different AIDS "cures" (such as sex with a child or virgin) will make choices that have consequences...

Re:HIV/AIDS (2, Funny)

hostyle (773991) | more than 5 years ago | (#23610081)

Magic Johnson has HIV, not AIDS. While they are related - and often the former leads to the latter - HIV does not mean certain death; whereas AIDS does.

Economics is not a closed system (2, Interesting)

vertinox (846076) | more than 5 years ago | (#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 was hopeful... (1)

Sun.Jedi (1280674) | more than 5 years ago | (#23609937)

... at first, that these articles would lead to a concerted 'middle finger' aimed at Exxon/Mobile/etc, their excessive first quarter profits, and the like.

I interpreted much of TFA/links as little pissing matches involving legal loopholes that are so far below the obvious problem.

Too much crap in my house has a little sticker on it which reads "Made in [!USA]".

Re:I was hopeful... (4, Insightful)

maxume (22995) | more than 5 years ago | (#23609987)

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.

Re:I was hopeful... (1, Interesting)

Sun.Jedi (1280674) | more than 5 years ago | (#23610217)

Wait, are you blaming corporations for the crap that *you* bought?
No. I am angered because I don't really have a choice to purchase American made products. They are scarce and/or more expensive, although the ones I do purchase are often of higher quality.

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.
The government can't spend the money I send in now correctly. What in the world would make anyone think more would solve the problem?

Re:I was hopeful... (1)

maxume (22995) | more than 5 years ago | (#23610625)

There is generally a choice. You just don't think the choice is worth it. There is a difference between failing to take option B because you like option A better and *not having* a choice.

Corporations are not People. (1)

FatSean (18753) | more than 5 years ago | (#23610509)

It's not quite the same, is it? People are held to much higher levels of accountability than corporations. Either hold the corps to the same levels, or make them accountable by taxing them and spending the money to right their wrongs.

Please hand over an addition 20% of your income to help make up for the national deficit.

Re:I was hopeful... (2, Insightful)

LynnwoodRooster (966895) | more than 5 years ago | (#23610155)

concerted 'middle finger' aimed at Exxon/Mobile/etc, their excessive first quarter profits, and the like.



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:I was hopeful... (1, Interesting)

Anonymous Coward | more than 5 years ago | (#23610497)

re: huge profit margins

Actually, the percentage profit margin for gas bought at the pump hasn't changed significantly in almost 40 years. What HAS changed is the government profit margin, which has risen from 1.5% in 1950 to 20% at present. Exxon still makes the same 9.5% that they did 10 years ago, but your federal government is raking in the dough.

It should be noted that "excessive first quarter profits" refers to the DOLLAR AMOUNT of oil industry profit, which is obviously on the rise as the sale price rises. But the dollar amount is useless without considering inflation. We've the value of the dollar is almost 9 times less today than it was in 1950. If you consider gas prices in 1950, and adjust ONLY for increased taxes and inflation, the calculated present price is closer to $4.50 than the $4 we're all paying at the pump. Really the question is, why aren't we paying MORE for gas?

Consider what happened when we got our "economic stimulus" last month. The federal government printed off $600 for every citizen - lowering the value of the dollar - and gas prices shot up almost a dollar.

High gas prices are the result of poor fiscal policy at the federal level; they are simply the fastest market to respond to inflation.

Aligning corporate interests with the nation? (2, Insightful)

DrHackenbush (1273982) | more than 5 years ago | (#23609939)

I'm pretty sure the Soviet Union tried that experiment already with unsatisfactory results.

Re:Aligning corporate interests with the nation? (1)

vertinox (846076) | more than 5 years ago | (#23609965)

I'm pretty sure the Soviet Union tried that experiment already with unsatisfactory results.

Though China seems to have got it right with theirs. I'm just saying...

Re:Aligning corporate interests with the nation? (1)

DrHackenbush (1273982) | more than 5 years ago | (#23609997)

In China, this seems to work pretty well if you happen to be at the top of the government but the rest of the population seems to have a fairly rocky time of it.

Re:Aligning corporate interests with the nation? (1)

maxume (22995) | more than 5 years ago | (#23610043)

Environmental regulations "align corporate interests with the interests of the nation". Generally in a good way. Regulation isn't bad, too much regulation is bad.

Then you need to stop being pretty sure. (4, Insightful)

EWAdams (953502) | more than 5 years ago | (#23610405)


Communism is a whole other thing. Go back to Poli Sci 101.

Bring back the charter. (3, Insightful)

Zaphod-AVA (471116) | more than 5 years ago | (#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 (2, Informative)

IvyKing (732111) | more than 5 years ago | (#23610117)

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 to have a very different idea of ideal corporate governance than a stockholder who wants to flip the shares as quickly as possible (e.g. Warren Buffett vs Carl Icahn).

Re:Bring back the charter. (1)

LynnwoodRooster (966895) | more than 5 years ago | (#23610231)

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.

But does breaking articles lead to real penalties? (1)

zooblethorpe (686757) | more than 5 years ago | (#23610565)

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,

Two responsibilities (4, Insightful)

Anonymous Coward | more than 5 years ago | (#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.

Re:Two responsibilities (1)

LynnwoodRooster (966895) | more than 5 years ago | (#23610247)

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...

Re:Two responsibilities (1)

colfer (619105) | more than 5 years ago | (#23610325)

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.

Re:Two responsibilities (3, Interesting)

Rolgar (556636) | more than 5 years ago | (#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.

MBA training says ignore law if you can (2, Interesting)

zooblethorpe (686757) | more than 5 years ago | (#23610615)

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,

This is what happens without communism (5, Insightful)

Animats (122034) | more than 5 years ago | (#23609977)

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 (0, Flamebait)

Anonymous Coward | more than 5 years ago | (#23610127)

This is such a load of crap. Lets reduce it to the simplest terms. If you saddle corporations with high taxes, and high regulations...they will leave. And that is what they did. They went to a country that has a more free economy that the USA - China. CEOs are smart. Why stick around in a country that punishes them for success?

Just remember companies *never* pay taxes - people do.

Put a huge windfall profits tax on the oil companies - guess who will pay for it - you do.

Think about why Hong Kong was such an economic power house? At one time it was a tax free zone for corporations.

I am sick and damn tired of Marxists in this country telling us how corporations are evil. They are not evil. A powerful government that tells us what to do is evil.

Re:This is what happens without communism (1)

Jim Buzbee (517) | more than 5 years ago | (#23610173)

Bravo! If only I had mod-points.

Re:This is what happens without communism (1)

jcr (53032) | more than 5 years ago | (#23610279)

Think about why Hong Kong was such an economic power house? At one time it was a tax free zone for corporations.

It's still a lot closer to that ideal than most other jurisdictions.

-jcr

Re:This is what happens without communism (1)

dreamchaser (49529) | more than 5 years ago | (#23610255)

I think you replied to a very cleverly crafted troll. I guess it's possible he believed the stuff he spewed onto the page, but I think he just wanted to get a reaction. Yours was spot on and insightful though.

Re:This is what happens without communism (1, Interesting)

Anonymous Coward | more than 5 years ago | (#23610399)

There's a simple fix for that. It involves protectionist principles.

Any company that decides to leave the country losses all rights to trademarks, patents, etc. Any imports using the same trademarks incurs huge tariffs.

A company is nothing without it's mind-share.

As for the oil companies. We don't have to place more taxes on them. We should at least eliminate the tax breaks we give them. Also, we should never allow these companies to buy each other out.

Most of the problems we are having today can be traced back to deregulation and consolidation of these energy companies. This of course is further traced back to the gullibility and ignorance of the general population and the corruption of the current US government and its non-elected appointed by the white house officials.

Companies are allowed to operate because they benefit society. Governments have to regulate those companies so they do not harm society.

The true evil is a docile ignorant stupid population.

Re:This is what happens without communism (1)

InvisblePinkUnicorn (1126837) | more than 5 years ago | (#23610585)

"The true evil is a docile ignorant stupid population."

And I'm sure you what's best for each and every member of the population, correct? If only you had unlimited power to take their entire income and disperse it as you see fit, and decide what jobs they are allowed to have and where they are allowed to live. Yes, that would be the ideal society...

The true evil is telling people what is best for them and controlling their productivity through government-backed force. It is an immoral violation of their fundamental rights as human beings.

So you pass more laws, fearmonger. (1)

FatSean (18753) | more than 5 years ago | (#23610553)

You force people who built their business in the USA to stick around even if it means less profits.

If the business owners don't agree, freeze their accounts, raid their homes, put them in prison.

If they have money overseas, use leverage to get those funds.

You seem to want to give these people the ability to do whatever they want by crying that the sky is falling if they are regulated and made to play fair.

You've crafted a false dichotomy, and all your concerns can be addressed by new laws. These companies get very rich off of our nation, they will be forced to give back to the people who made them rich.

Re:This is what happens without communism (1)

Lije Baley (88936) | more than 5 years ago | (#23610609)

I agree to a point, but when a corporation no longer provides a net benefit to the nation, why care if it leaves? Maybe we should even show them the door. The hard part is determining the net effect of corporation's presence -- it could be directly detrimental, but indirectly supporting other beneficial corporations. It's about as easy as figuring out what is really "green".

Re:This is what happens without communism (1)

jcr (53032) | more than 5 years ago | (#23610357)

Companies used to fear public opinion.

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

-jcr

Re:This is what happens without communism (3, Funny)

homer_s (799572) | more than 5 years ago | (#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:This is what happens without communism (2, Informative)

puppetman (131489) | more than 5 years ago | (#23610485)

The Soviet Union was technically a state-capitalist society, where the government (AKA state) owned the means of production.

Michigan's current problems... (0, Troll)

tcopeland (32225) | more than 5 years ago | (#23610075)

...seem to be based on green power and big unions [nationalreview.com]. Nothing to do with capitalism...

Oh noes! (3, Insightful)

FatSean (18753) | more than 5 years ago | (#23610567)

The people of Michigan want fair wages and a clean environment to live in. How dare they! They'll eat poision and breath coal dust and LIKE it or else all the companies will leave and they will die.

Corporations and people are both self-interested (1)

presidenteloco (659168) | more than 5 years ago | (#23610089)

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 steering control of even a democratic government.

Constitutions should be amended to prevent this excessive influence of corporations on democratic governance.

Then let them play again, because they do whatever we let them do very efficiently.

For more musings on group dynamics and social hierarchies, see my "blog" at http://criticality.wordpress.com/ [wordpress.com]

Yup. That's why this won't work (1)

Weaselmancer (533834) | more than 5 years ago | (#23610579)

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.

Milton Friedman vs John Mackey (0)

Anonymous Coward | more than 5 years ago | (#23610123)

A much better read on the subject is the debate between Milton Friedman vs John Mackey (Whole Foods Founder) on the Social Responsibility of Business.
Friedman is of course credited with coming up with the "Conventional Wisdom" referenced in the article.

"there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." - Milton Friedman

http://www.reason.com/news/show/32239.html [reason.com]

maximize share value, not profits (0)

Anonymous Coward | more than 5 years ago | (#23610129)

TFA said maximize share value, which is closer to what I think the true financial mission of the corporation should be. "Maximizing profits" tends to lead to a short-term mentality (because profits in the distant future are unpredictable) and can result in corner cutting, with poor results. Think of Dell Computer under Ed Rollins' tenure as CEO, to take one random example.

Share price is supposed to factor in future results, albeit with present value discounting. Of course investors can be faddish or misled, too. Maybe a better test would be some sort of average of share price over the next three years.

This is a question of definitions. (4, Insightful)

greenguy (162630) | more than 5 years ago | (#23610137)

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.

Re:This is a question of definitions. (1)

scamper_22 (1073470) | more than 5 years ago | (#23610349)

I 100% agree.

This is what government should be doing...setting up coops and non-profits.
Take healthcare as a great example. not even Obama is bothering to setup a non-profit federal health-inusrance company open to all americans. Let private health insurance compete if they can.

It's a total lack of thinking on the part of our 'democracy'. Their only solution seems to be letting companies run rampant maximixing profits, and then taxing us/them to make up for the difference.

The north east dare i say, is particularly prone to this.
Let's speak of Canada for example. In Ontario, people complain of bank fees and charges... and our leftist leaders even want to call in the government to control bank fees...
Meanwhile, out west, the credit unions are strong.

see the difference. One sets up quality non-profit entity. The other believes in bureaucracy, taxes, legislation...

I would actually suggest, the government be banned for providing such services (healthcare, education, insurance...0, and should only be allowed to build non-profit entities based on member contributions.

co-ops (1)

boneglorious (718907) | more than 5 years ago | (#23610471)

I agree, except I think this is not what the government should be doing, but what PEOPLE should be doing.

But I guess we, like corporations, are more interested in the short-term benefit of lower costs, rather than the long-term benefit of a business that keeps what we spend in the community as much as possible AND is directly answerable to our needs...and is usually staffed by people who are proud to be part of such an organization and are proud of the good work they do, resulting in...doing their jobs well.

Balance is the Key (2, Insightful)

FurtiveGlancer (1274746) | more than 5 years ago | (#23610145)

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.

government and voluntarism (1)

mapkinase (958129) | more than 5 years ago | (#23610175)

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 for those who do good and forbid evil.

about time somebody got it (1)

Pvt. Cthulhu (990218) | more than 5 years ago | (#23610185)

The more capable you are, the bigger responsibility you have to your country. Therefore, the largest of corporations should be pillars of altruism. Sure their focus is to make money, but thats not impossible to do at the same time as making the world a better place.

Governance should extend beyond the corporation (4, Insightful)

grandpa-geek (981017) | more than 5 years ago | (#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.

Private versus Commerical interests... (5, Interesting)

Zarf (5735) | more than 5 years ago | (#23610237)

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.

Corporations (2, Interesting)

robot_lords_of_tokyo (911299) | more than 5 years ago | (#23610277)

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...

Tessier-Ashpool for me (0)

Anonymous Coward | more than 5 years ago | (#23610321)

My friend has a Microsoft tattoo. Full colour wavy windows thingy. Apart from my forthcoming Tux tat, is there anything else I can do to help this corporate drone before he is forever lost?

A corporation is just a tool (1)

ImpintheBox (153919) | more than 5 years ago | (#23610401)

Maximizing profits IS a corporation's only responsibility, and that is the way it should be.

A corporation is a tool for making money. Period. That's neither good nor bad, it's just a tool.
It is not a person. It is not ethical or unethical, moral or immoral, any more than a hammer is.

The problem is that there is this quasi-religion that has grown up around corporations, fostered by corporate-sponsored economists and think tanks, based on the belief that giving them total free reign will produce a shower of benefit upon us all. Enacting special legislation on their behalf will increase the shower to a deluge. Anything which restricts their freedom or makes them responsible for their actions will bring disaster on us all. Nuts.

Maximizing profits is wonderful. But expecting anything else from a corporation is stupid. That is not their function.

Corporations are defined by government fiat. (3, Insightful)

EWAdams (953502) | more than 5 years ago | (#23610543)


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.

Re:Corporations are defined by government fiat. (1)

boneglorious (718907) | more than 5 years ago | (#23610591)

Agreed! If I had mod points, I would give them to you...here, want this handful of sticky change from my pockets instead? :D

Corporations without Free Will? (1)

Sean0michael (923458) | more than 5 years ago | (#23610427)

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 else won't be objective, especially if it is supposed to act in the interests of the nation. First, serving two goals that will undoubtedly conflict at times will only hurt their ability to serve either. Second, that other goal won't be set by the corporation, making the goals and plans of it subject to someone who may know nothing about it -- say, someone in Washington, D.C. And that person is going to be elected sometime every 2, 4, or 6 years, and who is not free from the undue influence of competitors and other third parties.

This post is actually turning into a post against regulation, which is essentially the goal of the article. But since the way they propose we determine "national interest" is through legislation, and since the legislators change every couple years, it would make it much better for corporations and us if they left "national interest" to someone else.

We need to realize that the interests of the American global corporation, whose interest is profit, and the interests of most Americans, who want a higher standard of living, have been diverging.
No they aren't. Every person who owns stock in that company is interested in that company's increased business abroad. Every consumer of that company's goods is concerned with the prices they can achieve through going global. But everyone who would rather buy local or not buy products from certain countries is free to buy from somewhere else. That varigated demand is all about higher standards of living and allowing each person to decide what that higher standard is for him or her. That freedom is only provided by the multitude of companies we have making our stuff for us. Forcing corporations to be held accountable to subjective "national interest" is going to limit their freedom to do what they want with their money (within reason) and limit our freedom to do what we want with our money for some cause that we as consumers may not believe in.

We vote with our dollars. Legislating a national interest infringes on our ability to determine for ourselves what that is. It would be great if we could eliminate competition and instead all cooperate (cooperation is inherently more efficient than competition). But since we'll never all cooperate, especially on an issue as broad and complex as national interest, we ought to stick to maximizing competition.

Re:Corporations without Free Will? (1)

Sean0michael (923458) | more than 5 years ago | (#23610535)

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 corporation existing in the future, continuing to produce products, pay employees, and in doing so bringing stability to the market. I don't want a company to make hundreds of dollars this month if it means they won't be in a position to make thousands of dollars this year. They can still act in their best short-term interest as long as it doesn't badly damage their long-term interests of maximizing value through either gaining market share, increasing margins, or what have you.

Corporations w/o Free Will: The Only Kind There Is (1)

boneglorious (718907) | more than 5 years ago | (#23610563)

I don't see making profit as fundamental to what corporations should be doing. What's wrong with just producing a good product, earning enough to sustain a reasonable size and get better at what they produce, and paying workers a fair wage?

The problem with asking a corporation to do anything other than, essentially, make money is that nothing else is going to be as objective.
Technically--and I'm seeing this all throughout the comments in this--we can't ask corporations to do anything. We're asking the people who make the decisions to behave in certain ways, and nothing a person does is objective. But people can decide to behave in ways that are good for the community or not. Unlike corporations.

Yes (1)

OldHawk777 (19923) | more than 5 years ago | (#23610441)

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.

Yes. (1)

fabu10u$ (839423) | more than 5 years ago | (#23610503)

Corporations have been bad citizens ever since the courts defined fiduciary duty as "show a higher profit every quarter."

Fp 6o4t (-1, Troll)

Anonymous Coward | more than 5 years ago | (#23610525)

the political mees show that FreeBSD prima donnas, and track of where Corporate keed to be Kreskin may do, may not big picture. W`hat During this file

Odd, I read this a different way. (0)

Anonymous Coward | more than 5 years ago | (#23610559)

As a 'human' citizen I am subject to a great deal of rules and regulations. I have to pay tax's, I have to be tested to get a license to drive a car, I'm not allowed to harm or kill anyone, I'm not allowed access to private company data.....

If corporations were held up to the same standards then it would be rather cool, wouldnt it?

What if.... corporations paid tax's, passed tests to get relevant licenses, not harm or kill anyone and were not allowed to snoop on our private data......

Write the equations defining "national interest" (1)

rlglende (70123) | more than 5 years ago | (#23610607)


Then write the equations that define the actions needed by each corporation to meet that definition of national interest.

Then collect the initial conditions that will allow solving those equations.

Then compute for the age of the universe.

Then throw the results away because conditions changed meanwhile. Do it again.

At the end of a long iteration, throw the results away because people don't act like machines, and you can't program for an open system.

How can a slashdot crowd throw away everything it knows about science and technology and allow such propositions to be debated as though they have some basis in external reality?

Lew

what about Echelon? (1)

kubitus (927806) | more than 5 years ago | (#23610631)

Is it not the duty of the US to serve its companies with information eavesdropped ( or spied ) from other companies worldwide? Do not ask what you can do for your country... or did I get something wrong? Maybe the second bullet came from this direction?
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