(Image: Illustration by akindo / iStock)
Nov 04, 2016
My previous column called for a major restructuring of both governmental and corporate institutions to strengthen democracy and subordinate corporate power and the pursuit of corporate profits to the power and interests of living people and communities.
I was a youth during the brief historical anomaly that occurred after World War II. Most major corporations that conducted business in the United States were still headquartered here, paid their taxes here, and provided secure long-term employment with good pay and benefits. Unions were strong and there was a recognized social contract between corporations and workers.
As described in my previous column, I witnessed the process of corporations walking away from this contract to advance a systematic process of colonizing the world's peoples and resources under corporate rule. For more than 20 years, I have been pointing out that to have a world that works for living people, the interests of living communities must take priority over maximizing corporate profits. That means corporations must be accountable to governments and governments must be accountable to people -- real people.
The purely private-purpose corporation is an illegitimate entity. This is the Elephant in the Room that no politician dare mention.
As a private person, I am free to do business as a sole proprietorship or partnership in pursuit of purely private interests and free to engage in politics for so long as I observe the law. A corporation, however, is different. It is a creation of government.
Government is a public entity bound to serve the public interest. It seems logical that any entity created by government is properly considered a public entity accountable for serving a public purpose, obeying the law -- and obliged as a public entity to stay out of electoral politics.
As was the case in the early United States, every corporation should have a public purpose stated in its charter and be accountable to the government authority that issued its charter for being true to that purpose.
The lack of corporate accountability is amplified when a corporation sheds its allegiance to any place, person, or public interest.
The lack of corporate accountability is amplified when a corporation sheds its allegiance to any place, person, or public interest. It may be chartered in the United States, park its profits in Bermuda to avoid taxes, contract with sweatshops in Bangladesh, sell its products in France, and be a subsidiary of a parent corporation headquartered in Brazil. In effect, it is stateless and operates as a power unto itself, and has no concern for the interests of any people or place.
The idea that a corporation chartered in one country has an automatic right to do business in another is odd indeed. As a private citizen, I don't have a right to visit another country without its express permission, much less to locate a business facility there. I'm also obligated to pay taxes and obey the law wherever I am. A corporation, as an artificial legal entity, is surely entitled to no greater rights or lesser obligations than a flesh and blood person.
Every corporation needs both a public purpose and a national identity. This need is obscured by the common practice of referring to transnational corporations as multinationals -- implying they are national everywhere. Similarly, referring to any corporation that sells its share in a public exchange as a "public" corporation implies it has a public purpose even though we may recognize on reflection that it is purely profit-driven.
By the fundamental premise of democracy, it is the sovereign right -- and obligation -- of We the People to demand that stateless corporations be broken up and the pieces restructured as national public-purpose legal entities prohibited from engaging in electoral politics and each owned by and accountable to living people who are citizens of the country in which it is chartered to do business.
We might then have a global economy organized by and for living communities rather than by and for incorporated pools of financial assets. Freed from subservience to corporate interests, these communities would be free to cooperate for the common good rather than forced to compete for corporate favor.
In my next column, I will look at what this would mean for relationships among national economies in a living Earth global economy.
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This article was written for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas and practical actions. Licensed under a Creative Commons Attribution-Share Alike 3.0 License.
David Korten
Dr. David C. Korten is a former Harvard Business School professor, a member of the Club of Rome, a founding member of the Alliance for Ecological Civilization, president of the Living Economies Forum, author of the international best-selling books When Corporations Rule the World; The Post-Corporate World: Life After Capitalism; and The Great Turning: From Empire to Earth Community; and the white papers “Ecological Civilization” and “Eco-nomics for an Ecological Civilization,” which expand on the concepts presented here.
My previous column called for a major restructuring of both governmental and corporate institutions to strengthen democracy and subordinate corporate power and the pursuit of corporate profits to the power and interests of living people and communities.
I was a youth during the brief historical anomaly that occurred after World War II. Most major corporations that conducted business in the United States were still headquartered here, paid their taxes here, and provided secure long-term employment with good pay and benefits. Unions were strong and there was a recognized social contract between corporations and workers.
As described in my previous column, I witnessed the process of corporations walking away from this contract to advance a systematic process of colonizing the world's peoples and resources under corporate rule. For more than 20 years, I have been pointing out that to have a world that works for living people, the interests of living communities must take priority over maximizing corporate profits. That means corporations must be accountable to governments and governments must be accountable to people -- real people.
The purely private-purpose corporation is an illegitimate entity. This is the Elephant in the Room that no politician dare mention.
As a private person, I am free to do business as a sole proprietorship or partnership in pursuit of purely private interests and free to engage in politics for so long as I observe the law. A corporation, however, is different. It is a creation of government.
Government is a public entity bound to serve the public interest. It seems logical that any entity created by government is properly considered a public entity accountable for serving a public purpose, obeying the law -- and obliged as a public entity to stay out of electoral politics.
As was the case in the early United States, every corporation should have a public purpose stated in its charter and be accountable to the government authority that issued its charter for being true to that purpose.
The lack of corporate accountability is amplified when a corporation sheds its allegiance to any place, person, or public interest.
The lack of corporate accountability is amplified when a corporation sheds its allegiance to any place, person, or public interest. It may be chartered in the United States, park its profits in Bermuda to avoid taxes, contract with sweatshops in Bangladesh, sell its products in France, and be a subsidiary of a parent corporation headquartered in Brazil. In effect, it is stateless and operates as a power unto itself, and has no concern for the interests of any people or place.
The idea that a corporation chartered in one country has an automatic right to do business in another is odd indeed. As a private citizen, I don't have a right to visit another country without its express permission, much less to locate a business facility there. I'm also obligated to pay taxes and obey the law wherever I am. A corporation, as an artificial legal entity, is surely entitled to no greater rights or lesser obligations than a flesh and blood person.
Every corporation needs both a public purpose and a national identity. This need is obscured by the common practice of referring to transnational corporations as multinationals -- implying they are national everywhere. Similarly, referring to any corporation that sells its share in a public exchange as a "public" corporation implies it has a public purpose even though we may recognize on reflection that it is purely profit-driven.
By the fundamental premise of democracy, it is the sovereign right -- and obligation -- of We the People to demand that stateless corporations be broken up and the pieces restructured as national public-purpose legal entities prohibited from engaging in electoral politics and each owned by and accountable to living people who are citizens of the country in which it is chartered to do business.
We might then have a global economy organized by and for living communities rather than by and for incorporated pools of financial assets. Freed from subservience to corporate interests, these communities would be free to cooperate for the common good rather than forced to compete for corporate favor.
In my next column, I will look at what this would mean for relationships among national economies in a living Earth global economy.
David Korten
Dr. David C. Korten is a former Harvard Business School professor, a member of the Club of Rome, a founding member of the Alliance for Ecological Civilization, president of the Living Economies Forum, author of the international best-selling books When Corporations Rule the World; The Post-Corporate World: Life After Capitalism; and The Great Turning: From Empire to Earth Community; and the white papers “Ecological Civilization” and “Eco-nomics for an Ecological Civilization,” which expand on the concepts presented here.
My previous column called for a major restructuring of both governmental and corporate institutions to strengthen democracy and subordinate corporate power and the pursuit of corporate profits to the power and interests of living people and communities.
I was a youth during the brief historical anomaly that occurred after World War II. Most major corporations that conducted business in the United States were still headquartered here, paid their taxes here, and provided secure long-term employment with good pay and benefits. Unions were strong and there was a recognized social contract between corporations and workers.
As described in my previous column, I witnessed the process of corporations walking away from this contract to advance a systematic process of colonizing the world's peoples and resources under corporate rule. For more than 20 years, I have been pointing out that to have a world that works for living people, the interests of living communities must take priority over maximizing corporate profits. That means corporations must be accountable to governments and governments must be accountable to people -- real people.
The purely private-purpose corporation is an illegitimate entity. This is the Elephant in the Room that no politician dare mention.
As a private person, I am free to do business as a sole proprietorship or partnership in pursuit of purely private interests and free to engage in politics for so long as I observe the law. A corporation, however, is different. It is a creation of government.
Government is a public entity bound to serve the public interest. It seems logical that any entity created by government is properly considered a public entity accountable for serving a public purpose, obeying the law -- and obliged as a public entity to stay out of electoral politics.
As was the case in the early United States, every corporation should have a public purpose stated in its charter and be accountable to the government authority that issued its charter for being true to that purpose.
The lack of corporate accountability is amplified when a corporation sheds its allegiance to any place, person, or public interest.
The lack of corporate accountability is amplified when a corporation sheds its allegiance to any place, person, or public interest. It may be chartered in the United States, park its profits in Bermuda to avoid taxes, contract with sweatshops in Bangladesh, sell its products in France, and be a subsidiary of a parent corporation headquartered in Brazil. In effect, it is stateless and operates as a power unto itself, and has no concern for the interests of any people or place.
The idea that a corporation chartered in one country has an automatic right to do business in another is odd indeed. As a private citizen, I don't have a right to visit another country without its express permission, much less to locate a business facility there. I'm also obligated to pay taxes and obey the law wherever I am. A corporation, as an artificial legal entity, is surely entitled to no greater rights or lesser obligations than a flesh and blood person.
Every corporation needs both a public purpose and a national identity. This need is obscured by the common practice of referring to transnational corporations as multinationals -- implying they are national everywhere. Similarly, referring to any corporation that sells its share in a public exchange as a "public" corporation implies it has a public purpose even though we may recognize on reflection that it is purely profit-driven.
By the fundamental premise of democracy, it is the sovereign right -- and obligation -- of We the People to demand that stateless corporations be broken up and the pieces restructured as national public-purpose legal entities prohibited from engaging in electoral politics and each owned by and accountable to living people who are citizens of the country in which it is chartered to do business.
We might then have a global economy organized by and for living communities rather than by and for incorporated pools of financial assets. Freed from subservience to corporate interests, these communities would be free to cooperate for the common good rather than forced to compete for corporate favor.
In my next column, I will look at what this would mean for relationships among national economies in a living Earth global economy.
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