Corporations & the Public Interest -How the original purpose behind corporate charters has been lost

[Roland99]

Someone sent me a link to this article this morning. What a wonderful summary of what's happened in the distortion of the corporation to its current form of pure anti-American greed. This should be required reading for everyone!


Oh, and do read the whole thing. I wish I could have copied more than just 4 paragraphs of this!!



Corporations and the Public Interest
A look at how the originally purpose behind corporate charters has been lost
by Jonathan Rowe

One of the articles in Business On A Small Planet (IC#41)
Summer 1995, Page 26
http://www.context.org/ICLIB/IC41/Rowe.htm

Profit Machines

It gets even weirder. The modern corporation actually can be incapable of commitment to a community or any other realm of concern that might diminish its profits. Individual entrepreneurs, including the owners of small and family-held corporations, can express their conscience through their enterprise. They can choose to make less money for the sake of a larger good.

The publicly-held corporation, by contrast, generally cannot. Officers are subject to shareholder suits if they do not put shareholders - i.e. profits - first. The corporation becomes a greed machine, an engine of acquisition that is not subject to the urgings of individual conscience and responsibility.

Free market fundamentalists such as Professor Milton Friedman argue that it is wrong in principle to distract the corporation with any such extraneous concerns as conscience or the need to help the society survive. For the corporation to pursue any goal besides the maximization of monetary profit, he says, would disrupt the cosmic market scheme.

If that's true, it means the largest and most powerful "persons" in America are exempt from any standards of individual responsibility and from any obligation to help solve problems in voluntary and nongovernmental ways.

[TransitJohn]

1. It really is madness.

End corporate personhood now.

[rucky]

2. If they want personhood, they need a conscience.

Which is the very definition of personhood.

[Ozymanithrax]

3. Greed isn't anti-American.

Without it thrift wouldn't be worth a dime.

But it is a great article.

[Roland99]

4. Their version of it certainly is. And by "their" I refer to the Enrons, Worldcoms, defense industry

pharma companies, health insurance companies, etc. and their one-dimensional mission to make money money money!

[kenny blankenship]

5. the limited liability protection enjoyed by shareholders relieves them of any duty

to care for anything besides their immediate & personal gain. They don't have to care what the company does because they can't be sued for damages. All that can happen is that the company's value will go to zero and they lose their investment - which they will have dumped on a "greater fool" before the judgment comes due. The fiduciary obligations of corporate management legally bind them to pursue and maximize that gain. It's a Frankenstein monster stitched together to have all the powers of a human being without any capacity for conscience, or respect for social responsibilities.

[Roland99]

6. I could have easily chosen this passage to quote.....

In fact, the first corporations in the Anglo-American tradition had nothing to do with profits. Much as it might cause free market fundamentalists to squirm, the original corporations were actually regulatory agencies, such as guilds, or local governments such as townships. (In New England, when you drive from one town into another you pass a sign that announces the year in which the town you are entering was "incorporated.")

Later, the British Crown adapted the corporate form to what we would call today a "public-private partnership." The Queen wanted to lay claim to the New World, but such ventures required huge amounts of capital, and were risky in the extreme. To amass the capital, there was a need to insulate investors from responsibility for the undertaking, beyond the amount of their investment. Thus the "joint stock company" was born.

Individual responsibility is one of the bedrock principles of common law. To dilute this principle was an extraordinary step, one that was conceivable only for a mission that presumably served the public good. In other words, there was a direct link between the exemption from individual responsibility for corporate investors (and later officers), and the public good that the corporation was chartered to carry out.

This legal tradition carried over to the American colonies. It gave rise to the corporate charters that the state legislatures bestowed one by one, and only for specific undertakings. (Think of Amtrak as a rough modern-day equivalent, including the subsidy.) This was the form of corporation the framers of the Constitution had experienced. It was totally a state matter, and nothing for the new federal Congress to worry about.

Greed, arrogance, the strive for more and more power and money and influence has gradually distorted many (most?) corporations into an unstoppable beast exuding only the worst traits.

[Roland99]

7. Justice Sotomayor's views on corporate personhood give me hope

http://www.dailykos.com/storyonly/2009/9/17/783575/-Justice-Sotomayor-Questions-the-Foundation-of-Corporate-Personhood-from-the-bench