By Zachary Shahan, Clean Technica, August 2018
Senator Elizabeth Warren will introduce legislation next week aimed at reforming corporate culture in America. Under her proposal, any corporation with more than $1 billion in annual revenues would be required to obtain a federal charter. At present, the only duty of a corporation is to maximize shareholder value. But under Warren’s proposal, each federally chartered corporation would be required to consider the interests of other stakeholders in society, especially “workers, customers, and the cities and towns where those corporations operate,” according to a report in The Guardian.
Over the last year, corporate profits have soared while average wages for Americans haven’t budged. It’s been the same sad story for decades. Today I’m introducing a new bill to help return to the time when American companies & workers did well together: https://www.wsj.com/articles/companies-shouldnt-be-accountable-only-to-shareholders-1534287687 …
Companies Shouldn’t Be Accountable Only to Shareholders
My new bill would require corporations to answer to employees and other stakeholders as well.
Is Something Out Of Whack?
Warren, like many Americans, is concerned that corporate profits continue to soar while wages stagnate or decline. Back when America was great, a person working 40 hours a week could afford a home, 2 cars, and an occasional vacation. Today, both spouses must work 60 hours a week or more just to stay afloat. Many are drowning in debt with no way out.
If making America great again involves reverting to that prior economic model, Warren is all for it, but of course that is not what the Blowhard In Chief and his supporters have in mind. Their focus is on an earlier time when the robber barons were in complete control of American life, Andrew Carnegie could send the Pinkertons to club militant workers into submission without fear of consequences, and black Americans knew their place.
In 2010, John Roberts, chief justice of the US Supreme Court, blithely declared in the Citizens United decision that of course corporations have all the rights and privileges that the Constitution affords to human beings, especially the right of free speech. How Roberts, who with his conservative confreres likes to preach the doctrine of originalism, could peer deep into the language of America’s owner’s manual and find the Framers intended to equate corporations with people is still a mystery with no apparent answer. Robert Reich allegedly says, “I’ll believe corporations are people when Texas executes one.”
Since Citizens United was decided, corporations have declared open season on people. The bedrock founding principle of the United States is this distillation of liberal thought — the sovereignty of the nation resides in its citizens, not a monarch, plutocrats, or prelates. Notice that Voltaire, Rousseau, Locke, and Mill, whose writings inspired the American Revolution, never imagined corporations as repositories of sovereign power. The people who wrote the Constitution would have been aghast that anyone would think they were including corporations within the definition of citizens. Roberts and his pals have never explained how their radical vision squares with their avowed originalist roots, when their ruling so obviously runs counter to what the Framers intended.
No longer constrained by any shred of decency or regard for the people of America, corporations have flat out stolen the federal government, subverting it with unlimited mountains of cash. If a member of Congress balks at such blatant corruption, they simply shove the offender aside and engineer a way to get someone else elected who will take their money, shut up, and do what they are told to do by their corporate masters. These people are known by one common name — Republicans.
A Reader Comment
The corporate agenda has focused on demonizing the poor and the powerless. Blame the victim is the order of the day as tax cuts for corporations sail through Congress while the people of the United States see their taxes go up to pay for them. CleanTechnica stalwart John Moore posted this comment recently:
This is the United States of America. Correct me if I’m wrong, but aren’t all Boards simply puppets of the CEO? I mean healthcare CEOs give themselves $100 million dollar bonuses and no one stops them. Jamie Dimon and JP Morgan stole money directly out of customer accounts to cover losses, and not a peep. Car companies behave like….. car companies, and never a ripple.
I’m not saying that this is peachy keen, I’m just saying that it is the Corporate American Way.
How Corporations Throw People Under The Bus
It is precisely that kind of corporate abuse that Elizabeth Warren wants to correct. While The Abominable Trump beats his rather ample chest about helping working Americans, Warren has a plan that actually will benefit ordinary people instead of oligarchs. In essence, she is saying their are transactional costs to society that flow from rapacious corporate behavior and it is time to even the playing field.
Want an example? A piece in The Guardian this week describes how corporations have engineered an epidemic of obesity in order to fatten their earnings. “As Jacques Peretti argued in his film The Men Who Made Us Fat, food companies have invested heavily in designing products that use sugar to bypass our natural appetite control mechanisms, and in packaging and promoting these products to break down what remains of our defenses, including through the use of subliminal scents,” The Guardian reports. “They employ an army of food scientists and psychologists to trick us into eating more than we need, while their advertisers use the latest findings in neuroscience to overcome our resistance.”
Like the tobacco companies and the fossil fuel companies before them, food manufacturers have abused their economic power over governments to put the best interests of people last. As The Guardian piece points out, industry flacks have succeeded in convincing 90% of policy makers in the UK that “personal motivation” is “a strong or very strong influence on the rise of obesity,” according to a recent report in the medical journal The Lancet. Such “blame the victim” notions are heard all the time in the current political debates in the United States, bought and paid for by corporate lobbyists.
Here are some of the specifics in Warren’s proposal, which would apply to about 3,500 business corporations in the US. Any shareholder would be able to sue corporate directors who they believe are not living up their obligations. This actually used to be a given in corporate law in America until the courts got overwhelmed by corporate litigation and decided to limit such suits. 40% of directors would be elected by employees. Her bill would also require all corporate political expenditures to be approved by 75% of directors and shareholders. Boom! Goodbye Citizens United.
Reaction from business leaders and conservative pundits has been swift. Most have condemned the idea as another example of government overreach. But why is forcing corporations to take into account the needs of the society they ostensibly serve such a bad idea?
A group of academics believe Warren’s ideas have merit. In a letter addressed to Warren, the group led by Cornell University law professor Robert Hockett said, “We believe legislation along these lines to be long overdue. While some of us would like to go even further than the Act does, we all agree that your legislation takes the critical first steps in realigning our regime of incorporation with its original purposes.”
Can you imagine what might happen if Warren’s ideas took root? Corporations would not only enjoy free speech, they would be required to act like responsible adults, which means including considerations about the environment in their business plans. They would need to act ethically rather than hogging everything for themselves. Wouldn’t that be something?
If Warren’s plan ever got enacted — a distinctly remote possibility in today’s world where corporations own all three branches of the US government — it would have to pass muster with the Supreme Court. Oh, what a delicious irony. How would those august jurists manage to preserve the hegemony of corporations while paying lip service to their alleged originalist doctrine? Any decision they render would expose them as the towering hypocrites they truly are.
Warren, of course, is closely aligned with the policies of Bernie Sanders. There are those who believe Sanders and Warren would have wiped the smirk off Trump’s face in 2016 if they had been the candidates of the Democratic Party instead of Hillary and What’s His Name. Is she angling for a presidential bid in 2020? If so, this proposed legislation could be a centerpiece of her campaign.