By Donella Meadows
–February 8, 1996–
The title of David Korten’s new book — When Corporations Rule the World — does not refer to some theoretical future state. Korten’s point is that corporations already rule much of the world, and that the consequences aren’t good, not even for corporations.
His book is a detailed documentation — names, cases, numbers — of dysfunctional corporate behavior. Firing people and call it “downsizing.” Squeezing wages, pensions, and local taxes. Engulfing the environment, paying executives obscene salaries, pigging out on public subsidies, making dangerous or worthless products, undercutting competition by means fair and foul, and not only violating the law with impunity, but writing the law. In the long term this behavior impoverishes the very customers whose spending keeps business alive, the natural resources that fuel the economy, the reputations that corporations spend so much to polish, the investments they indebt themselves to make, and the viability of the market system.
Korten’s book ends with a list of measures to keep corporate activity in its place. I have heard people warn him never to put out the whole list at once, because any single item is shocking, and all together are simply unthinkable.
Well, let’s try it and see.
First, says Korten, we have to reclaim our politics, so democracy is not dominated by corporate might. For example:
– Challenge the Supreme Court decision that gives corporations fictitious human rights. Corporate employees should have all rights, of course, but the corporation has no conscience, no citizenship. Corporations, says Korten, “simply do not belong in people’s political spaces.”
– Take back the corporate charter. Corporations exist by public permission. If one breaks the law or acts against the public good, its charter should be revoked.
– Prohibit corporations from influencing the political process or “educating” the public on policy issues. Forbid false-front “citizen” lobbying organizations and even corporate “charitable” giving, through which firms often push their own agendas. If corporations want to serve society, says Korten, “let them provide good, secure jobs and safe products, maintain a clean environment, obey the law, and pay their taxes.”
– Prohibit paid political advertising. The ads are misleading, and their huge cost makes candidates beholden to large donors. Broadcasters, in return for the right to use the public airways, should be required to provide free, equal exposure to all candidates.
– Pay for campaigns through a combination of strictly limited, small individual contributions and public funding. Corporations should be prohibited from using corporate resources in any way to favor any candidate.
Then comes the job of restructuring the economy in the public, rather than corporate, interest:
– A transactions tax on the sale of stocks, bonds, and other financial instruments, to encourage long-term investment but discourage short-term speculation.
– Government guarantees only for deposits in community banks that invest in the community.
– Rigorous enforcement of anti-trust laws, above all on firms that own the media. “The operation of a media outlet should be the primary business of the corporation that owns it. This would ensure that the outlet is not used as a means to advance other corporate interests.”
– Worker and community buy-outs, at least as an option, whenever a plant is to be closed, sold, or merged. The terms should reflect the workers’ years of labor in the plant and the community’s services that have made the plant’s operations possible.
– Taxes shifted from “goods” (employment, income, property ownership) to “bads” (pollution, resource extraction, packaging, imports, advertising).
– Elimination of corporate income tax (and therefore many insidious tax-avoidance behaviors). Corporations should be required to pay out all profits to workers and shareholders. Interest payments on debt would come out of profits, rather than counted as a cost of doing business (eliminating debt-financed leveraged buyouts). Corporate growth would come from new stock offerings or borrowings, not retained earnings.
– Elimination of all public subsidies to corporations.
– A tax on advertising (rather than counting it as a tax-deductible business expense). Schools should be declared ad-free zones.
Finally Korten advocates two measures that would end poverty, welfare, social security, Medicare, and the terror of losing a job or falling into poverty:
– A guaranteed income for each person (including children and retired people) sufficient to meet basic needs, paid to all, regardless of other sources of income.
– Reduction of the work week to allocate employment equitably, rather than condemning part of the population to underemployment and the rest to hectic overwork.
Are these ideas dangerous? Do they make you angry? Make you laugh? Make you think? Are they so insidious that should never be discussed in public?
Then why are people so afraid of discussing them in public? Why the taboo on this particular kind of free speech? Is it because corporations rule the media, and therefore, quite effectively, rule the world?
Copyright Sustainability Institute 1996