Hypersonic

Oh boy Ray! ......you'd be a hit with the trade unions

Seriously though, this is an excellent point -- I entirely agree with you.

Curb Zone

 

Hypersonic

Oh, well ...I agree with much that has been said by you and others. My only concern is the vast numbers of working people in the west whose jobs are "vaporizing" -- where do these people go -- welfare?

Harry Plopper

Claiming that the one and only role of a corporation is to make profit for the shareholders only is ... have to put it ... very brave.

What about corporate social responsibility?

Don't you think a corporation owes something to society?

Some corporations are social responsible - mainly due corporate ethics based on corporate values & visions. And many are not.

Why social responsibility is an important factor?

Why a corporation is able to make profits? Because a state - which is currently the ultimate representation of society as a whole - allows corporation to make a profit. Mind communist countries where corporations & companies haven't got a green light for operating (and making profit).

OK, back on track ... Today every serious corporation is responsible not only to their shareholder but to many parties eg. shareholders, business partners, employees, customers, state, local community, etc.

I'm not claiming they have to distribute some of their profit to those parties (although in some cases they are obligated - eg. state & local taxes!), but in some way they are responsible to take all these parties in account.

Eg. state is getting tax payments, local communities some donations, business partners some rebates, customers some extra services or treatments, employees some material benefits or awards, etc.

Many times corporations are patrons to some activities (eg. art, sport, medical researches, humanitarian actions etc). Talking about donations here, not sponsorships where a corporation benefits directly.

Responsible corporations are aware they have to give something back to society - not only taxes & wages. Usually state introduce lower taxes on profit & allows low wages to please a corporations, yet in such case IMO there is moral duty of a corporation to pay off to the society and state in an alternative ways (donations, patronages, etc).

Don't you think capital is obligated to some ethics & morality?

And if all corporations were a bit more moral & social responsible the globalization would be much more pleasant & with less side effects.

Hypersonic

Hmmm, maybe they don't "owe" society, but they do play a leadership role in society and with that should come an ethical responsibility.

Some small towns might be entirely reliant on one major industry or one major company -- an entire population can be devastated when companies restructure or close down a factory. Of course, closures are not done lightly, they are usually only done out of economic necessity.

Imhotep Evil

Nope.
What does that have to do with it ?!

I said pension funds, hedge funds, private equity NOT secret or not Clubs.

Bieldeberd members, rotarians, roma club members, and/or free-masons, are not private equity firms, hedge funds firms or pension funds firms

notic

many of the large firms in those categories you mention are run by some members of the group. but this is off topic...

notic

i guess thats the sad part about capitalist societies. the general population is not only governed by local laws but also by price. whether it be the price of labour or the price of inputs such as oil, corporations and elected officials will adjust to suite the economy. i do agree with you that something should be done about major closures, but heavy government intervention (protectionism) usually doesn't seem to work. a possible government funded re-education program might work or maybe a change in the mores of the corporate world is needed in order for there to be a sustainable solution.

450SEL6.9

Eni, who claimed that the one and only role of a corporation is to make profit for the stockholders? I certainly didn't. The quote from my earlier post that you used was, "It is not the role of business and commercial enterprises to distribute the wealth they create to anyone other than their stockholders." How does that become, "The one and only role of a corporation is to make a profit"? Overextension of the original statement, don't you think?

I'll go one further than Rob. Corporations don't owe society more than what they are legally required to pay, i.e. tax, minimum wage, pension benefits. If a certain corporation wants to go beyond that, great! They can and should, but I still don't think there is something more owing on their part.

Corporations have capital that can move anywhere on the touch of a button. If a state suddenly becomes inhospitable to a corporation, the corporation can move. Now, this does not always work. Many resource developments and mines in politically unstable regions can't be picked up and shipped back home. However, the ongoing capital needed to fully develop those mines can be shut off and redeployed. Similarly, if a businessman owns a widget factory in American and he doesn't like that corporate tax situation, he can do multiple things with the business. He can move corporate HQ to Bermuda, while keeping the plant. He can move HQ offshore, build a new plant in China or even outsource to China. In the meantime, the corporation could pay a lot less tax and radically lower its cost structure. I think corporations are less tied to the state/nation they are domiciled it today than they have ever been.

There are so many ways to invest capital today. It doesn't have to be locked inside a corporation's fixed assets. In the mid-1980s, I think '84 or '85, Forbes did a list of the richest Americans. Twenty-some-years later, I believe 75% of the richest in '84 are no longer on the '06 list. Now, if they had simply taken their capital and invested it in bonds or the S&P 500 fund, most of them would still be among the richest Americans today. With so many new markets, investment products, funds, capital can be shifted out of fixed assets and be able to earn even higher returns.

Imhotep Evil

I know some were involved in painful divorces.
Hence they're no longer on the list.

Harry Plopper

No. "The wealth the corporations create" is the net profit. And the net profit is distributed to shareholder - via dividends.



And that situation is so scary!

Eg. the relations between states are regulated by some international laws & declarations (put bilateral agreements aside). There is even UN organization where individual states make agreements & decisions, and are obligated to such agreements & decisions otherwise they can face sanctions (economic or even military ones).

And here we have corporations acting globally - acting beyond state borders & competence & jurisdiction. Not obligated to any international laws & declarations.

Corporation - an amoebic organization. More flexible than any state. More powerful.

IMO some big corporations shoud get a status of "subject of international importance" and get a membership in UN. So they will be obligated to some international laws & declarations made by UN.

Right now corporations are "free-floating" subjects with great power - migrating from less pleasant environment to more friendly environment (read: from state to state). And with their enormous power influencing the state inner affairs & lives of citizens there. And many times influencing inter-state (aka foreign) relations.

Yet I'm afraid we are too late ... Unless there will be more synchronized interventions by several states to take more control over big corporations. Yet this a bit idealistic expectation since we know every government is "purchasable" - prone to corruption, and willing to please corporation in exchange for some national & even more their personal benefits.

Unless you are eg. Hugo Chavez.

Curb Zone