Posted by: carlsafina | Wednesday, February 10 10

Corporate Money

The following is adapted from my upcoming book, The View From Lazy Point; A Natural Year in an Unnatural World, which will be published by Henry Holt in the fall. This excerpt is a little long for a blog—but very short for a book.

An Environmentalist Looks at the Supreme Court’s Corporate Money “Decision”

Carl Safina

The modern environmental movement originated as a response to unregulated pollution. But more important than its origin, even more important than the movement itself, is when and where that origin was possible. Environmental movements arose not in the most polluted places on Earth, but in the most democratic, including the United States, Canada, and western Europe. The growth of environmental activity elsewhere often paralleled the overthrow of authoritarian and military regimes and the rise of democracies. When Vaclav Havel became president of a newly democratic Czechoslovakia in 1990, he lamented to the Czech people, “We have laid waste to our soil and the rivers and forests… and we have the worst environment in the whole of Europe today.” The previous repressive regime’s suppression of citizen groups, the press, universities, and other potential sources of objection allowed it to pollute with impunity while people stood powerless. Nature is most abused where human rights are most abused. A country serves justice, or it doesn’t. When it doesn’t, it poisons air, water, and soul alike. When it does, the environment becomes a key toward unlocking justice—but free people must hold those keys.

Saving the world requires saving democracy. That requires well-informed citizens. Conservation, environment, community, education, family, health, economy, easing poverty—these comprise one quest: liberty and justice for all. Whether one’s special emphasis is global warming or child welfare, the cause is the same cause. And justice comes from the same place being human comes from—compassion.

The main point of a democracy—protecting the best interests of the many from the greed of a few—is accomplished by having “the many” run the government. The social contract is that people voluntarily give some rights to a citizen-run government that serves social order and the public interest. That was the idea.

But the body politic has a parasitic infestation that bleeds us weak. Just look at the multinational corporations, corporate lobbying, and the resulting taxpayer subsidies that flow.

Political institutions can’t correct these economic forces—or even stop feeding corporations with public money—because they’ve been captured by them. Each year globally, governments pay $700 billion in subsidies that help pay people to over-pump groundwater, over-cut forests, over-fish oceans, and overuse fuel. The world taxes itself to pay for its own destruction. That’s the worst kind of socialism, brought to us by the worst kind of capitalists.

Modern corporations were essentially illegal at the founding of the United States. (The colonists had had enough of British corporations.) In the new country, corporations could form, raise public capital, and share profits with stockholders only for specified activities that benefited the public, such as constructing roads or canals. Corporate licenses were temporary. Corporations were forbidden from attempting to influence elections, law-making, public policy, and civic life. Imagine.

But from the beginning, corporate-minded men chafed for power, prompting Thomas Jefferson to write in 1816, “I hope we shall… crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.”

For the first century after the American Revolution, legislators maintained control of the corporate chartering process. Then they essentially lost it as series of court decisions established corporate “rights” and corporate “personhood.” These have been catastrophic for democracy, with planetary implications.

We didn’t need the U.S. Supreme Court to tell us that corporations have the same rights of “free speech” as real persons. Of course they do—much freer in fact than normal humans, since they can buy air time and advertising, dose candidates with fairy dust, and mobilize paid persuaders in quantities out of the orbit of the budget of any real real person. Corporations have free speech. Normal humans, not so much.

Our problems are not the inevitable price of progress. They are the eventual cost of stupidity, ideology, superstition, greed—the list is short. The problems spawned, vast. They’re intractable, but not because we lack know-how. Intractable because we can’t find the sense that informs the will.

The 1980s saw the democratization of greed. That avuncular Trojan Horse of corporate greed, Ronald Reagan, helped replace the ethic of “all for one and one for all” with “all for me,” immortalized by the movie Wall Street’s Gordon Gekko, who says: “Greed is good. Greed works. Greed is right.” Be greedy and feel good about yourself. Everyone wanted to feel good about themselves, so a generation embraced greed.

Bill Clinton got seduced by de-regulation’s easy feel-good, as did the unmentionable administrations that bookended his. The only problem was, the regulations they all deregulated were built up over a century for a very good reason: the public needs to defend itself against greedy excess.

All in all, deregulation dealt a devastating blow to the social contract and the idea that we’re all in America together, with both feet. The divisive partisanship, the scream-radio freak-show, and the fiscal recklessness that followed were an inevitable result of the lost discipline and the lost sense of common-cause. And by the time everyone realized their pockets had been fleeced, the fleecers had fled, beyond law, beyond regulation—beyond national borders. But not everyone lost out; you glimpse a winning ticket, for example, every time you read the words, “Made in China.”

Corporations have swept real economic and political power away from most governments. Of the hundred wealthiest countries and corporations listed together, more than half are corporations. Exxon Mobil is richer than 180 countries—and there are only about 195 countries. Without the responsibilities or costs of nationhood, corporations can innovate and produce at unprecedented speed and scale. Yet they can also undertake acts of enormous social and environmental destruction and report a profit.

The behavior of corporations arises from their wide freedom of action and their limited liability for harms caused. Further, shareholders “own” and profit by the corporation, but “limited liability” means shareholders can lose no more than the money invested; they aren’t held responsible for anything the corporation does. If they were, stockholders might know what companies they “own” and why. They might demand corporate responsibility. They might invest more carefully. But because they’re not, they don’t. Further, if a corporation can make a larger profit by wrecking a community, the law says it must.

Perhaps the most famous case in corporate law was decided in the Supreme Court of Michigan in 1919 when Henry Ford got sued by the Dodge brothers (yes, those Dodge brothers) Ford wanted to plow profits back into the company and its employees. “My ambition is to employ still more men,” Ford had been quoted as saying, “to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business.” The judges posed a short question: what is a corporation for? The judges answered themselves by saying corporations are “primarily for the profit of the stockholders” Not for employees or communities. Corporate managers—regardless of personal scruples or desire to ‘do good’—are forced to put profits always first.

The profit-maximization imperative creates continuous pressure to dump waste in the public commons, and to shift the resulting costs to the public through subsidies, tax-funded pollution clean-ups and such. Where dumping waste is illegal, corporations may be fined for violations. Such fines often become “a cost of doing business,” while shareholders know corporations never get sent to jail, and that some are “too big (to be allowed) to fail.” To the extent governmental regulations get annoying, corporate appetites engulf those too, backing and basically installing cooperative elected officials, then stoking themselves with subsidies, and then coercing the removal of regulatory “barriers” (formerly: “public protections”).

In real life as we know it, the profit-maximization imperative means that any company seeking to act responsibly incurs a competitive disadvantage. The implications are generally a cascade of catastrophes, because it means, essentially, that all the money in the world is under pressure to act irresponsibly. Any other impulse must buck that tide.

Now, the Supreme Court has sent America a new blast of partisan hot air that has caused corporate money to burst the century-old levees that had so tenuously restrained it within such imperfect channels. Who does not fear this? It is hard to see how democracy won’t be catastrophically flooded, and the voices of real people utterly drowned, in the oncoming deluge of corporate cash.

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Responses

  1. Carl Safina, Thank you for including a portion of your new book, the View From Lazy Point; A Natural Year in an Unnatural World. The recent Supreme Court (corporate) decision was a blow to me as a citizen of the U. S. I felt it was the last nail pounded in the coffin’s lid. Your words today were succinct and to the point of what has happened. My question is how do we work through this dilemma?

    • I agree. It did stunning damage to the idea of America. Obama wants congress to write a law that puts the corporate money genie back into the bottle. That will be hard with this miserably partisan court, part of the destructive legacy of GWBush. Because that action of the Court was a reversal that went against a century of laws, it is likely that an Obama court will eventually reverse it.

  2. I can’t wait to read your book in its entirety. This is exquisite writing – soul and though provoking – backed by intelligence and a clear argument. Congratulations on being a voice that needs to be heard. Catharine Cooper

    • thank you much, Catharine. I can’t wait for the book to come out, either. Looks like an october release. Right now I’m working with the mapmaker and an illustrator. If you liked that excerpt, I think you’re gonna dig it.

  3. You analysis is right on target. That “avuncular Trojan Horse of corporate greed” was indeed the Great Communicator and sold us a flawed and toxic dream of unchecked selfishness. As always, eagerly awaiting your book.

  4. Thank you, Carl Safina. In this house we see eye to eye with you.
    Looking forward to your new book The View from Lazy Point

  5. Carl,
    I have always admired your work and the elegance of your writing and now applaud the effort to cut through some incorrect perceptions the American public holds about how our country currently works (and doesn’t work!) It is an uphill battle and I hope your new book’s arguments are strongly supported. FYI- A survey this week found Ronald Reagan the most respected President in history.
    Regards,
    Doug

    • That survey certainly didn’t land in my in-box. Corporational “persons” might think he was. I think he was the most destructive president, and the second-worst president in history. The worst one had to actually have his brother steal the election for him.

  6. Carl, this is well thought and well written–a masterful job. If corporations are persons, then they should be eligible for jail.

    Just as the U.S. seized BASF and other German corporations during WWII, law-breaking corporations ought also to be “sent to jail”–all stock trading suspended, directors and officers in “house arrest” within the corporation, a court-appointed administrative body overseeing the corporation’s business, and all profits made during the “jail sentence” accruing to the government of jurisdiction (local, state, or federal). This would preserve the limited liability of shareholders, enforce the duries of boards and officers, and protect the community against corporate scofflaws.

    Keep up the good work!

    • If corporations were “persons,” they’d also have the right to bear arms. Maybe that’s next; corporations with their own armies. Obviously they have no intention of having the same liabilities as real people, or the same responsibilities as real governments. They just want no rules to apply to them.

  7. Thank you Carl,
    for your strong voice and clearly written words.
    The book excerpt is poignant.
    You clearly define the threats to democracy
    and its link to environmental issues.
    I had not clearly realize this.
    WOW…I wish the book’s release date were sooner.
    Dawn

  8. Hello Carl
    Thank you again for saying what millions of us want to say but can not or do not (for whatever reasons). My admiration for your writing skills is increasing exponentially with each book you put out. When Aaron Sorkin began his West Wing series, he should have had you as an adviser. Wow, I just thought of something …. maybe he did! Regards to you and the gang at Blue Ocean. George

    • That’s very kind of you. And very encouraging to hear. And no, he did not have me as an advisor; I can’t take any credit for that series.

  9. Thank you for writing this book! My father spoke of some of what you have included for years. He has now passed on. It is my privilege to pick up his baton and do what I can for wilderness on the land – principally at the moment in Montana and Utah – and to include our water world. You might like Craig Child’s “The Secret Knowledge of Water.” It connects us all.
    I hope I can contribute to the work The Blue Ocean Institute is doing with words and pictures in the future.
    The leafy sea dragon I “met’ at the Monterey Bay Aquarium recently has sparked my interest in bringing him face to face with our land locked Montanans to see what they are willing to do for oceans.
    Thank you again for writing this book

  10. Excellent writing, especially liked the historical analysis of how the government and society has been taken over by big business the past 200 years. I keep thinking that the voters, most of whom are not beneficiaries of the greed, will finally realize what is going on but they are too busy putting bread on the table to understand, I guess. Too bad that western civilization generally values materialism above all else. Thanks for continuing to spread good messages! Randy

    • Randy,

      In the cases i’ve watched, especially logging in the Northwest, it’s not that workers are too busy putting bread on the table; it’s that they’re too loyal to a company that is not loyal to them and feeds them disinformation. In that case (and there are many others, that create the whole tone of the country), they blamed environmentalists for putting restrictions on logging, when actually the reasons the mills were closing is that they were sending logs raw to Japan. From the air I saw mountains of logs on the docks, being loaded into ships bound for Japan, while mills were being shuttered all over the Northwest and the logging companies told workers that the Spotted Owl, Endangered Species Act, meddling enviros, and liberals in general were the problem. In reality, 95 percent of the forests were clearcut, most of the logs exported. And that was that. Only 5 percent were protected. Satellites show that. But that’s not what the loggers and mill workers were told. That’s in my book “Song for the Blue Ocean.”

      Writ large, corporations have sent all our jobs to China, India, and elsewhere so they can pay next-to-nothing to unionless sweatshop- and child workers. They tell people throughout the rust belt that liberal regulations killed their jobs, when in fact the causes were de-regulation and moving jobs to poor countries so very rich corporations could get very, very rich at the expense of America.

      It’s true that exported American jobs redistribute American wealth and help people who need jobs. But if America, with about 200-300 million people, became the envy of the world by building itself a broad middle class based largely on manufacturing what we all bought and sold to one another, why can’t China and India, each with a billion people, do the same for themselves? If they need our help, American consultants could show them how to create jobs and build an economy. As it is now, we have not only sold out American jobs and created depression throughout our former Midwest manufacturing centers, but China is stealing us blind on U.S. technology—while repressing public information and free speech. That’s not a model. That’s a catastrophe for our country.

  11. Carl,

    You’re not billed as an economist, but this exerpt from “View from Lazy Point” sure is spot on, with identification of the corporate greed that is devouring our country.

    Now the trick is “how to stop the avalanche”.

    Out here in Colorado, we use dynamite to head off potential avalanches when we have too much snow. This saves lives and reduces property damage.

    A few months ago the Feds tried to take away the dynamite used for the above purpose.

    The Feds backed away when they received a virtual landslide of protest against this action.

    H’mmm, maybe there’s an object lesson there.

    Regards, Lyda

  12. Carl,
    I just finished “Voyage of the Turtle.” As a surfer, biologist and lover of the oceans it was a terrific read. I remember Archie Carr, his wife and the three coeds who worked for him at Torotuga (we called them Archie’s angels). But to the point – the Voyage pointed the way to solutions – the excerpt above oversimplifies the very problems you identify in the Turtle. It is us that are head of the corporations and on the corporate boards – and many of us are the baby boomers as well as the Reganites. Look at the hope most of us had for Obama but we found that we all want something for ourselves but not if it goes to someone else. Like the sea turtle–who as you said has the misfortune of breeding in many of the most poverty stricken places but must just continue up the sandy shore no matter what the odds continue–do we just continue on or is there really a movement that can be created to make things more just and to ensure that all life -particularly ocean life -have the right to exist? Thanks
    Wally

    • Wally,
      There certainly is a movement to make things more just and ensure the continuation of all life. But it no longer drives politics and policy as it did in the 1970s. I think it will again, though, as the failures of present governments and economics mount and conditions become unacceptable. The question is, how much will be lost in the meanwhile.


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