Corporate Power

I taught Business Ethics for many years and during those years I came across a great many reports of the abuse of the power of corporations. It became increasingly clear as I read and thought about this misuse that it stems from the fact that the publicly owned companies ignore the stakeholder because they are primarily (if not exclusively) concerned about the return on the dollar, i.e., profits that can  be paid out to shareholders (and overpaid CEOs who typically make 400 times as much as their  average employee). What I now take to be an obvious fact has many ramifications.

I have posted before about the oversight on the part of the founders who were so sensitive to the abuse of power and who simply did not see the possible abuses of power that might result from the millions of dollars the corporations rake in every year. — and this despite the fact that Jefferson, for one, was fully aware of the dangers of immoderate wealth in the hands of a few. But the founders simply couldn’t see this coming, clearly. They did realize, however, that the Constitution was a document that required up-dating from time to time; it is not written in stone. Henry Adam thought that when Grant was elected there would be a drastic overhaul of a document he realized was already out of date. But that didn’t happen. But, surely, one of the issues that needs to be addressed in our day is the abuse of the power of corporations that can simply buy elections and determine who is allowed to hold public office and what those who have been elected will do when in office (if they want to be reelected).

In 2010 the Supreme Court decided by a vote of 5-4  in the “Citizens United” case that corporations are “persons” and have rights of free speech as protected by the First Amendment. Under that umbrella, they were given the green light to contribute to political campaigns — which they have subsequently done, in spades. Elections were increasingly a battle of the rich against the also rich, but the contributions of the corporations — not to mention those who run the corporations — have upped the ante considerably. Now we find ourselves faced with continuous requests for money from candidates and political parties to “take on” the corporations — as though this can be effectively accomplished.

I don’t buy the notion that corporations are persons and I think the claim I have seen argued that, as persons, they might somehow be shamed into behaving ethically is a bit dubious. If the shame were to result in lower profits corporate CEOs would simply pass along the losses to the customers until the PR people could direct attention elsewhere and convince the public that no real harm was done. This was the case with the Exxon Valdez oil spill in the waters off Alaska a few years ago when Exxon sent a team of people up to the region of the spill where they cleaned up several hundred yards of oil from the shoreline and then had it filmed and used the film in a public relations campaign to convince customers that they had eradicated the effects of the spill. Ignored altogether, we have since discovered, were hundreds of yards of shoreline out of sight that remained covered in oil. It seems to be in the corporate DNA to do whatever it has to do to “right the ship” in the case of an accident and make sure the image of the company is not seriously damaged. They have public relations people who do nothing else but address this issue. And they have lawyers, who they often call “ethics officers,” whose job it is to see that they take no steps that could possibly end them up in court — because they identify morality with legality and pride themselves in “doing nothing wrong.”

The recent attempts by the current administration to weaken, if not eradicate altogether, the E.P.A. and other regulatory agencies is extremely disturbing because history has shown that the corporations will not police themselves and if their feet are not held to the fire they will do whatever it takes to increase profits, full stop. In an economy like ours regulations are anathema to the corporations and their highly paid officers. But from the public’s perspective they are essential.

Furthermore, those corporations should not be regarded as persons and given the right under the First Amendment to contribute to political campaigns. The founders missed this one, but we are becoming increasingly aware of the abuses of power by the corporations and the need to rein them in by limiting their impact on the public domain. The first step, clearly, is the rejection of the Citizens United decision which at least two of the judges who voted for it now realize was a mistake. And, if we cannot revise the constitution, we can certainly modify it to see to it that controls are placed on otherwise unfettered power. That is, we can if we have the will.

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13 thoughts on “Corporate Power

  1. Hugh, great post. We have discussed before that a key reason people incorporate businesses is to protect their personal assets from risk. With this basic truism in mind, how can a corporation be treated as a person? If they are, then I believe ever officer must be subject to the same risks as a person would be should the corporation do something illegal. Keith

    • Hi Amigos
      Sometimes from afar, I read your post and appreciate what you are sharing.. yet I find myself lacking for a worthy reply. Selecting ‘like’ is sorely lacking as an alternate response. It’s not just the USA; there are many areas where the best interest of/for the people gets shoved to the back, or items of importance get tied up in red tape… presently I’m trying to navigate another twisted pathway of red tape in understanding how the poor apply for help, what are the options, why are some approved and others denied, etc. it’s incredibly frustrating, and all the while, the ones hiding behind organizations are enjoying their high-dollar lives. it’s. just. not. fair.

      Ha, looks like I did find a response!

      • Thanks to you both for your commented — always insightful and adding to the ongoing dialogue. I think the courts would have difficulty holding the CEOs responsible and the CEOs have shown themselves very good at finding fall guys!

  2. Excellent, though disturbing post. When I read the first sentence, I found myself thinking “Business Ethics … isn’t that an oxymoron?” But yes, I have long believed that Citizens United was one of the worst decisions ever. But one thing … corporations can spend zillions of dollars to promote a candidate, but at the end of the day, it is still up to the voters to learn about the candidates, their ideologies, and to exercise common sense and good judgment. So while I am against both corporations and other lobbying groups, such as NRA, being able to contribute huge sums to campaigns, I hold each citizen accountable also for educating themselves and not simply falling prey to everything they see on television or on Facebook. Both problems need to be addressed, I think.

    • Hugh, Jill raises good points. I add the McCutcheon decision to Citizens United. It allows funding by people across the country of a local political race. When a SC GOP Congressman said on the House floor we must do something about climate change after he saw the data in Antarctica several years ago, the petroleum lobby heavily funded an opposing candidate and the incumbent was defeated. I find this abhorrent when a local race can be bought. Keith

  3. Would it be OK if I cross-posted this article to WriterBeat.com? I’ll be sure to give you complete cr6edit as the author. There is no fee, I’m simply trying to add more content diversity for our community and I liked what you wrote. If “OK” please let me know via email.

    Autumn
    AutumnCote@WriterBeat.com

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