Bush’s corporate interests harm democracy

Recently, the Bush-Cheney campaign began airing an ad saying
Sen. John Kerry’s health care plan would leave “big
government in charge.”

President Bush should have also included, “Under my plan,
the one in charge is Big Corporation.”

The Bush administration’s corporate ties run deep. Bush
has schemed to privatize health care and has favored
environmentally unfriendly corporations by cutting funding for
global warming research, weakening environmental protections such
as the Clean Air Act, and threatening the independence of the Clean
Air Science Advisory Committee. These actions and a host of other
pro-corporate decisions demonstrate his support for corporate
power. With corporate interests playing such a large role in
politics, we must ask ourselves how the corporation came about and
if it is a danger to society.

In Joel Bakan’s recent book, “The Corporation: the
Pathological Pursuit of Profit and Power,” and in his new
film, “The Corporation,” he explains that a
“corporation’s legally defined mandate is to pursue
relentlessly and without exception its own economic self-interest,
regardless of the harmful consequences it might cause to
others.”

This unchecked self-interest is damaging to individuals and
society and can even hurt shareholders themselves and cause
corporations to self-destruct, as in the recent Enron scandal.

In both the movie and the book, Bakan chronicles the history of
corporations’ rise to power. In the 19th century, ownership
of corporations was spread out among so many shareholders that
decision-making by the owners was nearly impossible. Real people
fell to the wayside, and the legal rights and duties companies
needed to operate were granted to another “person,” the
corporation itself.

By the end of the 19th century, the corporation gained the
rights of a person under the 14th Amendment, which originally was
written to protect freed slaves. In an 1886 Supreme Court decision,
corporate “persons” were guaranteed “due process
of law” and “equal protection of the laws.”

Bakan recounts the landmark high court case Dodge v. Ford
(1916), in which Ford Motor Co. investors and brothers John Dodge
and Horace Dodge sued Henry Ford for using corporate profits to
reward customers in the form of lower prices on Model T cars. The
Dodge brothers sued on the basis that profits belong to the
shareholders and that Ford had no right to give their money away to
customers. The judge agreed, stating that “a business
corporation is organized and carried on primarily for the profit of
the stockholders,” and it could not be run “for the
merely incidental benefit of shareholders and for the primary
purpose of benefiting others.”

Dodge v. Ford helped define “the best interests of the
corporation” principle, which legally binds corporations to
put shareholders’ interests above all others. It is in fact
illegal for a corporation to assist workers, improve the
environment, or help consumers save money as primary goals ““
and it can only undertake such actions if they maximize the wealth
of its shareholders. In effect, genuine corporate social
responsibility is illegal.

Corporate self-interest is as active as ever. An exceedingly
successful way for corporations to maximize profits is to lower
costs by utilizing the concept of the externality, described by
Nobel Prize-winning economist Milton Friedman as “the effect
of a transaction “¦ on a third party who has not consented to
or played any role in the carrying out of that transaction.”
Several externalities created by corporations are air and water
contamination from the release of toxic chemicals into the
environment, faulty and dangerous products such as asbestos or
ephedra, and worker rights violations. These problems, passed on to
societies around the world, are acceptable because they maximize
shareholder profits.

Too often the cost of settling lawsuits against such blatant
corporate abuse is lower than the cost of preventing these problems
in the first place.

As corporations view this simply as a monetary decision, the
laws often do not prevent corporations from continuing to harm
people and the environment; corporations cannot choose to solve the
problems they have created if the decision is not in the best
interests of the shareholders ““ even if it is the moral and
responsible thing to do.

Consequentially, even the most socially conscientious CEOs are
stifled.

Bush’s actions have further weakened the restraints on
corporations. Bush demonizes government regulation, our best hope
for protection from corporate abuse.

We must not lose our voice in the democratic process to the vise
grip of the moneymaking machine known as the corporation.

Cholfin is a fourth-year paleobiology student.