Corporations With Benefits
Margaret Thatcher once said, "There is no such thing as society: there are individual men and women, and there are families."
Maybe her view came from reading too much Ayn Rand at an impressionable age, but Thatcher's idea that the individual is all, unfettered commerce is king and that government -- taxes, regulations and anything except traffic lights and conscription of some other guy to fight for your right to be rich -- is a Big Evil, came to prevail. The common good? She sneered at it.
Thatcher came to mind because I've been reading about these new "benefit companies," or B Corps. Similar to "friends with benefits," these are corporations that allow new companies to write all kinds of social responsibility into their corporate charters.
A law supporting B Corps is currently moving through the Vermont Legislature. A similar law has been introduced in Maryland, and is expected to be discussed soon in New York State, Colorado, North Carolina, Pennsylvania and Washington State.
According to the Web site Bcorportation.net, B Corps. use "the power of business to solve social and environmental problems." They are unlike traditional responsible businesses because they "meet comprehensive and transparent social and environmental performance standards; institutionalize stakeholder interests; and build collective voice through the power of a unifying brand."
They also appear to offer protection against hostile and not-too-hostile-but-not-too-benign-either takeovers.
"You also embed your values into your corporate governing documents so they can survive new investors, new management and even new ownership," the Web site says.
In Vermont, the B Corp. bill is being promoted by in part by Ben Cohen and Jerry Greenberg, who lost control of their ice cream company when it was bought out by the giant Unilever. They say that if the bill had been in effect 10 years ago, they wouldn't have been forced to sell. They are being disingenuous, however, because they had gone public before Unilever took an interest. And once they were a public company, they were swimming with the sharks; why were they surprised that they occasionally got bit? And were eventually torn limb from limb and eaten?
Personally, I'm not against capitalism. I'm a big fan of what I call market capitalism, by which I mean something different from what Milton Freedman and the other free-market worshipers mean.
I'm a fan of the markets I adored when I lived in the Third World. You grow some potatoes, I grow some tomatoes, Juan over there decides to kill one of his cows. Around 4 in the morning, before the jungle gets too hot, we meet and sell our wares. I use the money I make selling tomatoes to buy a potato and a piece of the cow. We trade gossip, we buy, we sell, we go home, we make stew, we eat, we work, we live.
Yes, this is a naive and simplistic view of economics, but it's also a transparent one. And it illustrates that even in commerce, there has always been a common good.
The rugged individual who hacked a fortune out of the wilderness? He's a myth. No one makes it on their own. The government funded the transcontinental railroads, built the canals and put in the highways. People like Vanderbilt and Rockefeller exploited what the government gave them. Eventually, the government tried to regulate rapaciousness and succeeded during certain points in our history. Then Reagan, Clinton and the two Bushes gave away the store.
The more people who were put out of work by corporate America, the higher the stock prices, the greater the Dow, the greater the CEO executive salary, and the greater the CEO executive ego. We eventually ended up with rampant speculation, the destruction of the American economy as we know it, and now this "jobless recovery."
So a law that helps companies create themselves with built-in benefits and protections for their employees might be a very good thing. Also good: employee-owned companies, companies that protect the environment, companies that take a stand against corporate greed.
Vermont is a natural place for this kind of corporation. Many companies here already believe in the triple bottom line of profit, people and planet. Many of Vermont's large companies, for example, are employee-owned, including King Arthur Flour, Pizzagalli Construction, Carris Reels and Chroma Technology. Others, like Seventh Generation, lead the way in social responsibility. The nonprofit organization Vermont Businesses for Social Responsibility has over 300 members; it supports the new law.
Of course, the new law raises questions. Is it even necessary, since there are so few public companies here? Will investors be attracted to a company that is not entirely focused on maximizing stockholder value? If the need arises, how can a company with such restrictive by-laws be sold? Will the law attract out-of-state companies to incorporate here - thus boosting the Vermont economy? How does the state protect against the kind of hypocrisy that is rampant in the current rush to brand companies as "green"? Do we create the social responsibility police?
Still, this is a good new direction for business, and I'll be interested to see how it plays out. After all, even Thatcher herself, the grande dame of rugged individualistic free market capitalism, later said, "It is not the creation of wealth that is wrong, but the love of money for its own sake."
Someone asked Gandhi what he thought about Western civilization, he said, "I think it would be a very good idea." I say the same to the idea of corporate responsibility.