Corporations are people says Mitt Romney. Well, if they are, then, they have no souls! I’ve been reading David Niose’ new book, FIGHTING BACK THE RIGHT-Reclaiming America from the Attack on Reason. In chapter three, he tells about the early use of corporations to pool individual money for a project while limiting individual liability. In the early days of America, corporations were formed to build things. Now, they’ve morphed into profit making entities that have no souls.
Niose tells how Milton Friedman, whom he calls an icon of American libertarianism, “pointed out that officers who direct corporate assets toward charity are breaching their fiduciary duty unless they can show that doing so somehow adds to the corporate bottom line.” Here’s a link: http://www.umich.edu/~thecore/doc/Friedman.pdf
Increasing profits is the one and only goal of corporations. All their decisions are based on that one guiding principal. They don’t consider what is good for the consumer unless the corporation is somehow benefited in the long term. Think tobacco companies or automobile recalls.
Now, we have gigantic corporations which are owned by other corporations. The problem being that real human ownership is now very far removed from the typical corporate “person”. Niose tells of General Electric as a prime example. According to him, the largest institutional investors hold over 400 million shares each. He says even the 20th largest institutional investor holds over 70 million shares. There isn’t a single human shareholder that comes close to that number.
Niose does not suggest that the corporate model be thrown out. But, he emphatically asserts that dismantling of government regulations is not an answer.
The reality is that we need institutions and corporations. Regulating their activities, however, Niose asserts, is NOT socialism. We need rational, independent thinking that questions authority. We progressives are free thinkers and we can deliver, he says, but we have been suppressed for over three decades. Stay tuned for more in next post.
Thanks to https://www.facebook.com/TheBlueStreetJournal for the photo meme.
Pat Taylor Fuller has a blogspot named Pat’s Commentary