In the face of climate breakdown and ecological overshoot, alluring promises of “green growth” are no more than magical thinking. We need to restructure the fundamentals of our global cultural/economic system to cultivate an “ecological civilization”: one that prioritizes the health of living systems over short-term wealth production. Jeremy Lent, “The Patterning Instinct: A Cultural History of Humanity’s Search for Meaning.”
When we look at the world today we see it is increasingly being run by a few mega-corporations that have no allegiance to any country but often have budgets and money flow larger than most countries in the world. This gives them immense power, but sadly they use this power merely to expand their own corporate self-interest of monopolistic control and increased profits to maintain this control. It’s a little strange when you think about it. Business used to be about making stuff that the people could buy thus serving the wants of the people and the business system that addressed those wants. Note that I said wants not needs. Business originally existed on a small scale to serve the basic needs of people then expanded to address more and more wants as the industrial revolution ramped up. But, a simple premise underlay the process – if the workers made money, then they could buy the stuff being made by more and more businesses. Now, however, the money is being tightly controlled in an upward flow to an elite economy (see earlier posts Old Euro-Worldviews gone amok – Trying to Change Beliefs and The world Economy – are we really doing better? Measurement is everything!) where workers have less and less money in order to buy things. Think about it. If the mega-corporations were really about just making stuff for us to buy, why would the they keep removing the money that allows us to buy it all?
While we may ponder what is going on at the uber-high levels of business, the middle and lower levels of business are the ones we can help and influence for the changes that are coming. But first, a little clarification about business. Again, this is a simplified description of how corporations became what they are today.
Once we left our hunter-gatherer roots, where we were all generalists, we formed large societies where people could specialize more in what they did. For example, a person who was really good at making footware from deer skin could specialize in doing that as a small business. Likewise, this would happen for anything else that many people needed on a regular business. The better producers of stuff would inevitably be the successful ones as long as their ‘prices’ were fair and competitive – hence business started as we know it. Eventually guilds (definition: a medieval association of craftsmen or merchants, often having considerable power for mutual aid or the pursuit of a common goal) were created that negotiated and controlled the competition to keep the system stable. As the Europeans began exploring and colonizing the world for more resources, more monetary capital was needed to finance these long and risky trips. This also created dependent colonies where the resources were harvested and shipped back to the home country as a requirement of support from the home country. Thus, began a period of Mercantilism (definition: the main economic system of trade utilized from the 16th to 18th century. It was believed that the amount of wealth in the world was static and so the goal was to increase a nation’s wealth by imposing government regulation that oversaw all of the nation’s commercial interests). As long as financing came from the governments (and hence the monarchist hierarchies) the governments would give ‘Royal Charters’ to preferred merchant systems (essentially a monopoly e.g. Hudson Bay Company, or East India Company) to run that business enterprise in a given geographic colonized area. And if you could use cheap labor by enslaving the local populations or by using your own colonialists as indentured servants, so much the better.
As the governments began to lose full control of these charters, they ultimately morphed into what we today call big corporations. The original idea of a corporation was meant to be a temporary getting together of investors to accomplish a task (usually for social benefit) with their pooled resources that none could do on their own. In return the investors (shareholders) would get a cut of the profits equal to their invested share. To protect the shareholders from damage claims or losses incurred by the corporation, ‘Limited Liability (LLC)’ laws were created to limit the individual investor losses to the amount they had invested in that corporation. In the USA in the last half of the 1800s (and also around the world to some degree) the big companies formed Trusts and Mergers, which were a lot like the earlier Guilds but more monopolistic and controlling of the country’s economy. As we started getting into the early 1900s, in the USA, President Teddy Roosevelt led the populist charge to break up the monopolies and trusts. The birth of modern corporations was no longer about temporary projects but about doing permanent businesses that ran under the 1932 ‘Corporate Law” that governed how corporation ought to run. The major point being that each corporation was owned and controlled by its members, who just happened to be joint investors (shareholders) with each having shares in the ownership, control, and profits of the corporation. The primary responsibility of the corporate boards that ran the business was therefore to maximize the return investments for all of the shareholders. Indeed, in most business schools today, this maximized profit-making is the primary ethical responsibility (and often the only real ethical consideration) given for a corporation.
Corporate and business Law Professor Lynn Stout wrote in her book ‘The Shareholder Value Myth,’ “[Sixty years ago] if you had asked the directors or CEO of a large public company what the company’s purpose was, you might have been told the corporation had many purposes: to provide equity investors with solid returns, but also to build great products, to provide decent livelihoods for employees, and to contribute to the community and nation. The concept was to focus on long-term performance, not maximizing short-term profits.”
While shareholder profit was important, there was still the idea that somehow, public benefit would accrue from the corporation’s activities. Since the early 1980’s, however, and coinciding with the rush to globalization, the singular goal for most corporations is now profit at all costs, total domination of the world’s markets, and consolidation of businesses (a lot like the trusts of the U.S. 1800s). The result, growing massive corporatocracies controlling the world’s economies and all its people! So, what is happening to counter this kind of control?
TBC…
0 Comments