The private interest corporation is incompatible with democracy

[yurbud]

Every candidate should be forced to address this issue, and asked why we should believe they will look out for us instead of their corporate donors and those who in the past and future will employ them as lobbyists, board members, and CEOs.

Published on Saturday, December 8, 2007 by YES! Magazine
Only One Reason to Grant a Corporate Charter
by David Korten


It is fitting that we hold this conversation on the future of the corporation in historic Faneuil Hall, the Cradle of Liberty. Deliberations in this very room more than 200 years ago were the first step on a long walk away from a king named George that launched a new nation and led ultimately to the end of monarchy. May the success of our forbears inspire us in our deliberations on the future of the private-benefit corporation...

{snip}

The private-benefit corporation is an institution granted a legally protected right-some would claim obligation-to pursue a narrow private interest without regard to broader social and environmental consequences. If it were a real person, it would fit the clinical profile of a sociopath.

The basic design of the private-benefit corporation was created in 1600 when the British crown chartered the British East India Company as what is best described as a legalized criminal syndicate to colonize the resources and economies of distant lands to benefit wealthy investors far removed from the social and environmental consequences. That design has ever since proven highly effective in advancing the private interests of the world’s wealthiest people at enormous cost to the rest.

The private-benefit corporation uses its economic power to privatize (internalize) gains and socialize (externalize) cost. The resulting concentration of wealth creates an illusion that wealth is being created, when the actual consequence is a net destruction of real wealth. It is an institutional form best suited to achieving outcomes exactly the opposite of those we humans must now pursue.

{snip}

Capitalism, which means quite literally rule by financial capital-by money and those who have it-in disregard of all non-financial values, has triumphed over democracy, markets, justice, life, and spirit. There are other ways to organize human societies to actualize the positive benefits of markets and private ownership. They require strong, active, democratically accountable governments to set and enforce rules that assure costs are internalized, equity is maintained, and market forces are channeled to the service of democracy, justice, life, and spirit.

http://www.commondreams.org/archive/2007/12/08/5710/">FULL TEXT

[Demeter]

1. Good Luck Fixing That One

Once the genii was let out of the bottle, how are we to persuade him back in 200 years later?

[yurbud]

2. why do you think Washington is so afraid of Chavez? He's putting the genie back in the bottle

without doing away with capitalism.

[Demeter]

3. Exactly. And Chavez Has the People Behind Him

Or rather, Chavez is out front in front of his people.


We have no one to date out front in front of our people. Cindy Sheehan ocassionally, John Edwards more and more, Hillary: frankly, NEVER. Obama is limiting himself to some of the people some of the time, and chopping off whole categories of his party, never mind the entire country. Kucinich tries, how he tries, but he gets no purchase. And the rest are kidding themselves. They have a constituency of One.

[flashl]

4. Exposing corporate personhood

requires acknowledgement of its system of slavery, the myth of meritocrcay, etc.

[yurbud]

5. the myth that we have a meritocracy or that one is even possible?

[pberq]

6. Great article! - thanks yurbud

Thom Hartmann speaks often on this theme.

[reprobate]

7. The problem with public corporations is the absentee ownership that the stock market fosters.

Whenever you have absentee ownership of property, you will have the property run strictly for the profit of the absentee owners, with little attention paid to the corporation's effects on the environment, employees, or society.

I believe that a way to obviate these adverse effects could lie in a new class of corporation. A class in which the stock in the corporation would be owned entirely by the employees of the corporation, who would elect or hire the top management. The management would work for the employees, not absentee stockholders, answerable only to the employees.

Since the stock would be owned only by employees and not publicly traded this removes the problem of management trading huge amounts of stock options and bailing out on the corporation, leaving stockholders in the lurch. I believe a corporation structured in this way would be far more stable and beneficial to society, therefor I think the financial markets would be very open to financing employee buyouts by the employee groups. Their investment would be paid back by profits.

Should the employees see a need to expand their facilities they could issue bonds for expansion capital. And let's face the fact that the secondary security market that we call a "stock market" is nothing but a big casino. The traded value of the stock very ofter has little to do with the true value of the share in the corporation. I believe the bond is a more honest way of raising capital and the guaranteed return rather than some pie in the sky wish for capital gains would actually be an incentive for the public to invest in them.

In the case of large cap corporations, they could be broken into smaller units and those handled in the same way as the smaller cap units above. Representatives of each unit would then meet as a board of directors to hire overall management.

I think the long term effect of this paradigm shift would be a redistribution of wealth, resulting in the breaking up of the current vampire elite and their control of the entire society. Perhaps this would be difficult to start up in the USA, but Europe would probably be ripe for it.