February 28, 2008
-- by Dave Johnson
This post originally appeared at Speak Out California
Who should decide whether our communities have museums, concert and dance facilities, parks and other cultural programs? Who should decide on priorities for funding for disaster assistance or research into cures for diseases?
Should the public make the bulk of these decisions, through the transparent and accountable systems of our democracy? Or should a few individuals who control vast wealth and resources make these decisions for the people?
Because of dwindling tax revenues many communities have come to rely on "corporate philanthropy" for assistance with cultural programs, or to supplement their schools, or for other community benefits.
The people who run corporations are in a position to decide to donate the corporation’s money to various causes. Many of these are things that the people, through our government, no longer have the resources to support. For example, the executives and Board of a corporation might decide to donate to build a museum. They might decide to fund a school.
And they might decide not to do these things.
So look at what is happening -- as discussed in the Feb. 26 post, Reflecting on Corporations, we have corporations using their resources to influence the public and government to change the rules of the playing field on which corporations operate - deregulating, lowering taxes, etc. As this corporate influence brings cuts in corporate taxes (as well as cuts in taxes paid by the owners of the corporations), our society is left with fewer public resources for building museums, conducting research, etc.
And then we have corporations stepping in, using some of their earnings to provide those benefits, with their executives deciding where to direct the resources. For which the public is supposed to be grateful, and feel more favorable to the corporations, and perhaps grant them further benefits.
These are functions that the public once prioritized and controlled. But today the balance of control of the country's resources continues to shift more and more to fewer private individuals. This massing of assets and resources into corporate hands takes away the people's ability to decide to build museums and fund schools. It puts more and more power to make decisions that affect the public into the hands of corporate executives. Is this compatible with our understanding of democracy?
And a related question: Should corporate earnings be diverted from the shareholders? Is it the proper function of corporations to make decisions about funding museums, etc?
Perhaps there should be controls that guarantee that corporate funds and resources are used solely for the benefit of the shareholders and broader pubic interest. Perhaps corporations should be prohibited from engaging in any activities that influence our government or lawmaking or public opinion. Perhaps they should operate on the playing field that We, the People lay out for them -- and not be able to influence that playing field for the benefit of a few individuals who control the corporation. Perhaps.
Posted by Dave Johnson at February 28, 2008 12:58 PM
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Perhaps there should be controls that guarantee that corporate funds and resources are used solely for the benefit of the shareholders and broader pubic interest.
1. You cite two objectives. This means you need to allocate weight between the two (i.e. 80% shareholders, 20% public). Who should do this allocation?
2. Corporate boards are supposed to look after shareholders' interests. Admittedly they don't always do a great job (Enron, for example). However, I don't think the government will do any better.
I'm with Milton, corporations' social responsibility is to make profits for shareholders. The article is a classic. Read it.
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