Robert Reich Talks About His Book "Supercapitalism"

Apparently “Supercapitalism” is making the rounds over at AlterNet, because they keep writing about it. This time there’s a good interview with the author, former labor secretary Robert Reich, and he takes the opportunity to summarize his main arguments from the book.

One is that not only should we not be giving corporations the special rights that humans are given, but we also shouldn’t expect them to behave morally.

It’s kind of an anthropomorphic fallacy, and it’s very dangerous. Corporate social responsibility is a nice idea, but corporations will not be socially responsible, if by socially responsible we are suggesting that they sacrifice consumer deals and investor returns. They won’t.

He also talks about why he calls the period from 1945 to 1975 the “not quite golden age,” and offers some general ideas on how to begin repairing the democratic process in the U.S.

“Consumer-Driven Culture Is Killing Our Democracy” [AlterNet]

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“Has “Super-Capitalism” Outmoded Democracy?”

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  1. okay isnt a corporation a bunch of humans getting together into a group. What is the problem with giving them the same rights as individuals. I dont understand why people have to lose rights if they form a group.

  2. silvanx says:

    Still, we’ve got the best democracy corporate money can buy!

  3. O RLY? says:

    why don’t you read the book and find out.

  4. asherchang2 says:

    @Petrarch1603: Megacorporations aren’t just “a bunch of humans”. They’re amoral, irresponsible machines of profit for shareholders that do NOTHING that is not in the interest of their investors.

    British Petrol changed its name to Beyond Petroleum and hipsterfied its gas stations and portrays itself as envoronmentally responsible NOT because members of BP wanted it to reflect upon their ideals, but because thses actions were deemed good for the profitability of BP’s future.

  5. @Petrarch1603: Also, the individuals don’t lose any rights just because a corporation isn’t given certain rights. Your rights as an actual human are inalienable, remember?

  6. cerbie says:

    @Petrarch1603: it’s not that the people lose rights, it’s that the group gains rights, and so also, the responsibilities and liabilities fall on the group as its own person, not the people in it.

    So the board of directors of Acme Bird Catchers puts in a new CEO, and loves him. They poison a city (they also make products that an intelligent and creative Coyote cannot successfully use, but that’s not the point). Are any of those people responsible? In the end, no. Acme itself is, they shuffle those people around to other companies, paying them good to leave, and the cycle goes on again.

  7. okay when corporations do demonstrable harm to other humans, they should pay the consequences. This does not mean eliminating corporate personhood. Don’t throw the baby out with the bathwater

  8. @cerbie, that’s just a straw man argument. It doesn’t make any sense when applied to the real world.

  9. weg1978 says:

    @asherchang2: “They’re amoral, irresponsible machines of profit for shareholders that do NOTHING that is not in the interest of their investors.”

    What interest are they supposed to represent? What is the alternative that you propose? To paraphrase what Churchill said about democracy…it’s not the best system, but the alternatives are all worse.

  10. adrock75 says:

    The links bad, anyone have a corrected one?

  11. Beerad says:

    To all those interested in ideas like this, I highly recommend the documentary “The Corporation.” Came out in 2003. [www.thecorporation.com] Really interesting, and a main point of the film is discussing the idea of corporate “personhood” and what that entails. They delve into the point hinted at by some of the above comments that a corporation, by law, cannot act in a way contrary to the interests of its shareholders (as numerous corporate litigations brought by angry shareholders demonstrate). Public corporations are designed to be profit-maximizing machines and return greatest shareholder yield — anything “socially good” that a corporation does can only be in furtherance of that interest, be it through attracting customers to your “green” products or making the local community like you more for PR purposes. This doesn’t automatically mean corporations need to be done away with, but considering the power that they wield in our capitalist society, more people should probably understand the model.

    Haven’t read Reich’s book yet but it sounds pretty interesting.

  12. TechnoDestructo says:

    @Chris Walters: No, your rights as a human being are alienable. When public space and human interaction are all controlled or mediated or maintained by entities which are not directly bound by any constitution with regard to the rights of others, and when the government that is supposed to restrain those entities is controlled by those entities, oh yes, your rights will be aliened.

    @Petrarch1603:
    It is a group of people who already have individual rights. However, the decisions of that group are governed by the drive for profit…among responsible management, profit for the company as a whole. (among typical management, personal profit, even if it’s at the expense of the company) And while one or two people might think “oh, we can’t do that, think of the children!” other people…who might have their own moral problems with something ELSE the company is doing (or not) can overrule them. The only morality that can’t be cancelled out is that related to profit-making. Or even if they all do feel something isn’t right, it isn’t THEIR personal actions causing whatever negative effect, it’s the actions of their company. You can rationalize anything away that way. Though moral individuals may be all that comprises a group (ha!) the group itself can be completely amoral.

    Society does not give people who have proven to be amoral the same rights as others. See: Prison.

    The main way in which corporations are treated as people is in terms of taxes and financial liability. Their income is taxed similarly to if it were personal income (except not because they have more ways to weasel out of it…because they control the institutions that should control them), and the liability of the company doesn’t go beyond the assets of the company…the assets of the individual members of the corporation are generally not up for grabs by the company’s creditors.

    And that’s (mostly) fine…but it would have been nice if the Enron/Tyco/Worldcom ball had kept rolling, and that limitation of liability (defacto limitation in this case, I think) entirely stopped extending to criminal liability.

    More prison time and stress-induced deaths for amoral executives, please.

  13. Fujikopez says:

    Humans : Corporations ; German Citizens circa 1945 : Nazi Party

  14. mac-phisto says:

    @weg1978: corporatism is different from capitalism. capitalism existed long before the corporation came into existence, so churchill’s quote is irrelevant.

    BUT, you hit the nail on the head. they serve NO other purpose. that is the problem. all decisions are made within the context of a balance sheet. even legal questions are quantified within the context of “profit & loss”. if a company stands to make more profit from breaking the law vs. following it, guess which one they’ll choose.

    when a human breaks the law, they go to jail. unfortunately, you can’t throw a corporation in jail (sarbox is a step to make decision-makers accountable, but it’s more bark than teeth). you can only translate punishments into fines & punitive damages, which are often factored into the p&l by actuaries before a crime is even committed.

    corporatism further clouds justice with it’s ability to resolve & start anew. if a corporation can resolve before charges are files against it, it can never be charged with criminal or civil penalties.

    maybe eliminating corporatism altogether isn’t the answer, but lawmakers need to be more responsive to the truth that they’ve created a dual society & work to eliminate the special protections that have been passed to NPEs.

  15. goller321 says:

    @Petrarch1603: The reason they shouldn’t have “rights” is because
    a.) they are not a person…
    b.)They yield vastly more influence and power than the average person. As we are seeing in America today, corporations are using their vast resources to buy politicians and the bills they right (or the corporations themselves right as is often the case today.)

  16. mr_jrdn says:

    @mac-phisto: Well said.
    Corporations strive for profit. Any time they do something illegal there is no singular person to blame, therefore the only punishment can be fines and such. But what if the CEO’s of corporations could be held legally responsible for the actions of the corporation? I think that if that were the case, corporations would clean up their act rather quickly!

  17. Jim C. says:

    …not only should we not be giving corporations the special rights that humans are given, but we also shouldn’t expect them to behave morally.

    If corporations don’t behave morally, it’s because they’re run by people who don’t behave morally. Power (including economic or political) corrupts, etc. If most individuals were as moral as the quote seems to imply, the world would be a much better place than it actually is.

    And of course, exactly what morals are those and why are they the point of comparison?

  18. olegna says:

    >> okay isnt a corporation a bunch of humans getting together into a group. What is the problem with giving them the same rights as individuals. I dont understand why people have to lose rights if they form a group. <<

    Good lord.

    A little story:

    Jack and Jill form a, Inc. for, say, a small company that publishes silly “How to do Business” CD-ROMs for various countries. Jack and Jill acquire seed money from a group of their friends, so-called secured lenders. Jack and Jill use this seed money to LEASE a bunch of equipment and rent some over-priced “for-show” showcase office in Midtown Manhattan. Then Jackand Jill, though their identity as a “corporation” consign a whole bunch of research work using freelancers and temporary employees (so they don’t have to spend any of that seed money on a large group health insurance package).

    A few years pass and the company isn’t doing too well. Jack is the company’s CEO. His wife isn’t listed as an executive.

    Eventually, Jack and Jill realize they can’t afford to continue to run this “corporation” so they filed bankrputcy.

    Jack and Jill’s secured lenders and the landlord of said office space get what they can from the company. The company closes.

    The freelancers get screwed (in my case out of $9,000) because they aren’t secured lenders.

    The freelancer cannot go after Jack and Jill’s equity because Jack and Jill isn’t the “entity” that screwed me out of $9,000 — it was the company itself.

    Of course “the company” is just Jack and Jill, but because of the laws in the US say “the company” is a completely different entity than “Jack and Jill”.

    After Jack ruins his credit and filed for bankruptcy, his wife, Jill, founds another company with a different strategy. Jill now becomes the CEO of “the company” and the freelancers from the previous “company” are f**ked while Jack and Jill duck paying them money by simply re-constituting the company under Jill’s command rather than Jack’s.

    Meanwhile, over in Congress, lawmakers pass the Bankruptcy Reform Act (Hillary Clinton abstained, ie she didn’t vote against it and Biden fvoted for it along with a bunch of other Democrats) make it MORE DIFFICULT for INDIVIDUALS to file for bankruptcy than CORPORATE ENTITIES!

    So, PETRARCH1603 , you are actually wrong: it’s not “a group of people” it’s “a corporate entity” a creature that is larger than the group of people itself, with more rights than each individual person (especially self-employed freelancers). It’s favoritism to “the corporate entity” over “theindividual person”.

    I love when people blindly defend things that are against their interests. “What’s the Matter With Kansas”, indeed.

    PS: Small claims court is worthless against any corporate entity that uses the law to dodge it’s obligations. Civil Court requires lawyers, and most frelancers can’t afford to fight the system through the civil court, so they go to small cliams court, pay the $35 and don’t get jack crap anyway whether the judge rules withthem or not.

    PPS: When “Jack and Jill” sent me a check that bounced (in order to buy time to file the appropriate paperwork) I threatened to photocopy that bounced check and put it under the door of everyone in their fancy, Upper East Side condo. The next day I received a call from Jakc and Jill’s lawyer threatening to sue ME for defamation if I carried out that threat.

    How?

    Because Jack and Jill consciously issued me a fake check under the name of their “corporate entity” (comprising of Jack and Jill). Even though it’s illegall to issue a check you know will bounce, the defintiion of “you” get screwed up: Jack and Jill didn’t break the law (even though they did) it was their company that broke the law.

    That’s BULLSHIT.

  19. weg1978 says:

    @mac-phisto: “corporatism is different from capitalism. capitalism existed long before the corporation came into existence, so churchill’s quote is irrelevant.”

    Really? Try wikipedia:[en.wikipedia.org]

    If you would care to argue that capitalism existed in ancient Rome or in 14th century Germany, I’d be happy to debate the point with you. Adam Smith codified capitalism in 1776; corporations existed long before that.

    The challenge is still there: please name one viable alternative.

  20. mac-phisto says:

    @weg1978: i would care to argue that corporatism within the context of capitalism did not exist in the united states (in the “person” form) for 100 years after the revolution. it wasn’t until 1886 that corporations were deemed “persons” by scotus. -> [supreme.justia.com]

    previous to this point, corporations were severely limited in their functions. they had specific charters, were unable to contribute to political campaigns, could not hold stock in another company/corporation, & could be dissolved by the state if they violated a crime or their charter.

    interesting point of reference: early industrialists often chose not to corporate their companies. for example, carnegie steel wasn’t corporated until jp morgan bought out carnegie’s interests in the early 20th century & corporated the holdings as u.s. steel corporation.

    as i stated previously, maybe elimination of the corporation entirely is not the answer. however, today’s corporations are exactly the type of tyranny that our founding fathers sought refuge from. the declaration of independence was written in response to the actions of english corporations as much as the actions of the king himself.

    & as our forefathers took radical action to reclaim the rights that were unjustly denied to them, so must we. the corporate shield of protection must be torn down. the state should reassert their right to revoke a corporation at any time & use it without prejudice in cases of criminal wrongdoing. executives, shareholder groups – even individual shareholders should be held personally liable in cases where civil penalties cannot be satisfied solely by the corporate entity. fines levied should be able to negate any profit arising from wrongdoing in addition to levying a substantial penalty. & finally (this is the big one) corporations should be resolved to answer to stakeholders in addition to shareholders.

    that’s what i’d recommend as an alternative. the choice doesn’t have to be corporations with supranational powers or no corporations at all. there are certainly a thousands shades of grey in between.

  21. Amelie says:

    “A few of the world’s largest corporations successfully claimed the protection of the First Amendment, then lobbied Congress and the FCC to relax local ownership rules so they could take control of our media. Once that was done, they claimed First Amendment free speech rights to tell us whatever serves their interest and call it “news” without consideration of its truthfulness or having to worry about giving fair and equal time to other viewpoints. They claim the protection of the Fourth Amendment (search and seizure) so they can prevent the EPA and OSHA from inspecting factories for environmental or labor violations without first obtaining the corporation’s permission – which they say can be withheld for any reason.

    They now have the protection of the Fifth Amendment so they are protected from double jeopardy and don’t have to answer questions about their own crimes. They now have the protection of the Fourteenth Amendment so they can sue local towns or counties or states that try to pass laws to protect local small businesses against their predations.

    [www.thomhartmann.com]!