ON LIMITS OF "CORPORATE RESPONSIBILITY"
Tyler, Gus
The current interest in "corporate responsibility" arises from a mounting concern over tensions in our society and from a recognition of the decisive role corporations play in our lives. In the...
...Hence, future moves to recompose the GNP must begin with public initiative for three reasons: first, because it is not natural for private entrepreneurs to undertake efforts that are not profitable although socially necessary and desirable...
...They demand a multiplication of police, prisons, courts, firemen, hospitals, social services...
...This is more true today than it was a halfcentury ago...
...Who will carry them...
...At other times, these constituencies— management and labor—clash over how to divide the corporate income, or how to set work rules, etc...
...In 1947, the top fifth received 43 percent of the income, in 1967, it received 41.2 percent...
...In those areas where such studentborrowing is a nuisance to the banks (because of handling charges), the bank is often pushed into this operation by the pressure of larger banks that are ultimately the chief beneficiaries of this educational venture...
...In all three of these cases, a public good has been served: job-training, environmental protection, higher education...
...in 1956, the top 1 percent held 26 percent...
...It is a profit-making enterprise...
...3) reorder product and service priorities...
...Although there has been a growing awareness of poverty in America since the early 1960s, there has also been a tendency to view this as a racial rather than an economic problem...
...For instance: if the government awards contracts to run a manpower training 431 operation and pays for the effort either by direct payment out of the public coffers or by a tax rebate, a corporation can be utterly unrestrained in its service to the public...
...At present, they live with some hope–the expectation that they (or their children) will have more tomorrow than today...
...These individuals could exert a kind of personal control, allowing their corporations to express their personal cupidity, or religiosity, or social enlightenment...
...The second half of the CED statement is open to even greater question...
...the people who buy stocks expect returns on investment...
...As inflation and taxation and, more recently, unemployment have reduced the weekly take-home buying power of nonsupervisory employees, they have turned bitter—revolting against taxes for welfare and even education...
...Income maldistribution also intensifies our urban crises...
...But for a man who sits on both boards—the bank and the corporation —the dividends he loses in the corporation can be picked up in the bank...
...The most apparent of these is poverty with its attendant ills of illiteracy, disease, crime, riot...
...In part, because we have been living with the illusion that income has been redistributed...
...But, alas, it is not that simple...
...While labor, consumer, environmentalist, racial minority, or jobless may complain that the corON THE LIMITS OF "CORPORATE RESPONSIBILITY" 433 porations have not gone far or fast enough, the fact remains that they have moved—and they have moved contrary to the compulsions of their impersonal corporate beings...
...The corporation becomes what it has long been legally named in some countries: a societe anonyme a being without a name...
...For these reasons, then, income redistribution has—in effect—been considered as neither desirable nor necessary...
...The illusion stems from the fact that the average standard of living in the U.S...
...Thus Alvin Shorr argues that without income distribution a general rise in living standards is as likely to heighten as to lessen social tensions...
...If the top 2 percent or 5 percent of the nation is to 438 GUS TYLER carry the burden of constantly rising unemployment, then income redistribution must take place...
...First, because, despite the rise in the average standard of living, social tensions have been mounting...
...They spur an illegal economy in drugs...
...One account estimates that 100 industrial firms own about half the assets in all manufacture...
...Indeed, in a huge corporation with a widely diffused ownership, the hand that holds 25 percent or less of the ON THE LIMITS OF "CORPORATE RESPONSIBILITY" 435 stock holds the reins...
...the financiers calculate their rates and their risks against anticipated earnings and values...
...by 1967 that income rose to $8,318 (in constant dollars), an increase of about 85 percent in real dollars...
...If the expenditure is not picked up in one of these or similar ways, then the corporation pays the cost out of profit—actually paying only 50 percent of the cost because final profits are divided about 50-50 with government...
...Individuals in the underwriting houses (or families) can also purchase these bonds...
...Yet in each case corporate imperatives operate to perpetuate or extend the traditional maldistribution of income and wealth and power...
...Or if communities were to abolish public schools and subsidize all education by issuing vouchers, a corporation might set up a total educational system from prekindergarten to postgraduate school and realize handsome profits...
...A third choice is to reconstitute the nature (the makeup) of the GNP in such a way that America can simultaneously increase its GNP, improve the quality of its output, maintain full employment, and do so while conserving and even restoring resources...
...This is one of those mischievous myths that have misled blacks into believing if they were white they would have money, and that have angered povertystricken whites who believe if they were black they would get some attention...
...In 1949, the -top 1 percent held 21 percent of the wealth...
...The employees, the consumers, the ecologically concerned public-at-large are not constituents: they have no voice in choosing the corporate executives...
...in other cases, the evil is accepted as the lesser evil—as compared with closing a plant or getting wiped out by merger or bankruptcy...
...These two constraints—both of which are compulsions bearing down on even the most socially minded executive—are of sufficient weight to slow down almost any major corporation impulse to social do-goodery...
...it is painless progress...
...Even in metropolitan areas, "poor" whites outnumber blacks two to one...
...A constituent is someone who has a voice in choosing a representative who will reflect the interests of his constituents...
...were of the same complexion, the number living in poverty would not change appreciably...
...To restore polluted and poisoned lands and waters could (should) become a major American effort, employing millions of men...
...It is not the man but his stars that are to blame—those stars that compose the constellation in whose orbit he inexorably moves...
...These various moves, arising out of the interaction between corporations and other organized forces, have generally been regarded as progressive steps in the American economy...
...corporate wealth is controlled— not by individuals, or families, but by an alliance of management and financial institutions...
...How can their expectations be kept alive in a frozen economy except by income redistribution—not from the middle but from the top...
...These figures, supplied by the Department of Commerce, actually overstate the income of the bottom fifth and understate the income of the top fifth...
...In still other cases, a corporation (utility or otherwise) will contract with government to manage a generalized manpower training program from which it, or a subsidiary, or a mother corporation will draw those with the best potential...
...The first constraint—to stay competitive— means that a corporation cannot take on any sizable added costs that would cause it to lose out to its rival in the marketplace...
...it can bring more for all...
...Our problem does not stem from either the stupidity or the malevolence of our top 200...
...The students who once attended tuition free now pay a charge that is earmarked for interest and principal of the bond...
...Because we have not, as a nation, moved toward the redistribution of wealth and income, we have made the GNP our "holy grail...
...the process again calls for employment of manpower and adds to the GNP...
...Because business corporations are what they are, must be, and should be, they really have only one constituency: the shareholders...
...has been rising constantly...
...When financing for the economy is not readily available, our government has repeatedly intervened actively to help by depreciation allowances, accelerated amortization, credits for research and development, subsidies, etc...
...If they are carried by "middle" America, tensions are bound to rise—for in a fixed economy, this means a reduction in the living standards of the middle...
...If society is served, that is a by-product...
...In sum, the expanded school system is paid for by the student (in some cases many years after graduation) or by his taxpaying parent...
...The first responsibility of the manager is to the millions of little people who buy into mutual funds, who depend in their old age on pension funds, who place their trust in the financial wisdom of a bank...
...The disorders of poverty go beyond crime and riot in the cities...
...If the government offers a tax incentive, then other taxpayers are paying in whole or in part for the clean-up cost...
...A second case...
...For instance, the ancient tug-of-war between management and labor is inherent in the contest over "who gets what...
...Or if the government were to pay utilities to hire the "hard core," or reduce corporate taxes for doing the same, or allow some publicly regulated sector of the economy to increase its rates for the same, there would be no conflict for the corporation between self-interest and the commonweal...
...funds really belong in the ethical and, ultimately, legal sense to all kinds of plain people of limited means who count on proper (profitable) investment of their funds, just to have the income now or later to make ends meet...
...The corporation is now twice removed from being a true persona: first, it was set up to be recognized under the law as a persona ficta...
...There is little evidence, either historically or currently, that the "basic purpose" of business is "to serve constructively the needs of society...
...To turn out socially and personally wholesome products with little market potential, instead of socially and personally useless commodities, with much market potential, runs counter to prudent corporate practice...
...Sometimes the basic purpose of a business may coincide with the public interest...
...In such a hopeful situation, income redistribution appeared unnecessary to those on top even if it appeared desirable tothose at the bottom...
...These pension (etc...
...The movers of money are, in .a sense, caught in the orbit of the masses they handle...
...Even in the central cities, blacks are less than 50 percent of the poor...
...Hence, bigger was better...
...This is the era of the financial institution, not the personal investor...
...consumer power has been recognized with attendant changes in product...
...In the explosive '60s and '70s, corporations have not been confronted with the -threat of suppression or abolition by government...
...Today, ownership has become more impersonal: Most U.S...
...Each is motivated, in the first place, by self-preservation—by preservation of those qualities that make it what, in essence, it is...
...But, curiously, corporate profits are often less, precisely because the incomes of individuals associated with these corporations are greater...
...And, if keyed to elimination of waste, it could mean a higher (healthier) standard of living with less depletion of resources...
...environmentalist protest has been recognized with attendant changes in productive methods...
...Dutton, 1970), p. 20...
...The latter—at least as reported for tax purposes—suggest that corporate profits are not as great as imagined...
...second, because a master plan for an ecologically sound economy requires a national overview, and power beyond the scope of private corporations...
...Corporate income that goes toward paying off bonds held by individuals is not counted as corporate profit, but the corporation is the conduit of funds to enrich the bondholder...
...As frustration is almost inevitable and the notion that frustration represents personal failure and must be resisted at all costs, the problem tends to be defined in the unfair demands or superior opportunity of others...
...it meant more for business—profitable markets...
...The object of this article is neither to deny the positive aspects of corporate initiative in the social area nor to discourage the development of corporate responsibility...
...The cost to the utility is zero...
...In that sense, the shareholder is a constituent: he elects the corporate executives who are expected to champion the interests of the shareholder i.e., to make money...
...Consider the facts: in 1947, the bottom fifth of the nation received 5 percent of the national income...
...Ordinarily such a search-and-development program would have to be undertaken by the utility to get needed labor...
...But in one major respect—perhaps the major respect—there has been no progress: namely, in the area of income and wealth distribution...
...Who pays...
...These institutions (banks) get their funds * Richard J. Barber, The American Corporation (New York: E.P...
...The tax-exempt bonds he sells are bought almost exclusively by people in upper-income brackets to whom the tax break is important...
...The rise in the standard of living has taken 434 GUS TYLER place without any real income redistribution...
...Consider three examples: • A public utility needs manpower at a moment when public policy urges the training of "hard-core" (racial minority) unemployed...
...His expenses, in his corporate role, are similarly treated...
...In two decades, the changes were negliglible...
...The corporate executive who avails himself of a stock option to make a killing in capital gains is enriched even though the corporate books do not, as a result, show a profit...
...In sum, to ask the individual entrepreneur to take the initiative (on his own and at his own expense) to restore, recycle, and reorder is to expect him (as an institutional entity) to act contrary to his nature...
...2) A corollary of the "unemployed" problem is that of people who are presently living in poverty and hunger or are at the brink of this sad state...
...To recycle used materials likewise conserves and restores rather than depletes...
...Each, fatefully, is limited by the nature of its being...
...As American society is polarized on a societal centrifuge, corporations (as well as other associations) are under compulsion to think big, at least bigger than the original traditional concern of the organization...
...Indeed, the most immediate threat will come from a more short-run, narrow-interest, socially unconcerned operator (or operators) who will move in on the depressed company for a killing bybuying up the stock, by rallying the shareholders, and by hitting the target at a moment of its disfavor in financial circles...
...In these terms, of course, we will not wipe out poverty simply by providing a specified level of living...
...These acts of "corporate conscience" will be viewed by many as the answer to our most pressing social problems...
...In certain cases, the employer gets government help, whether in direct funding or in tax incentives —and the cost is carried by the taxpayer...
...To reorder production and services to minimize or eliminate useless commodities, planned obsolescence, destructive industrial techniques, loss of valuable by-products, etc...
...Regrettably, none of these institutions has 432 GUS TYLER complete freedom of action...
...The corporation, however, is an instrument—perhaps the chief instrument—through which this topheavy distribution of income and wealth is effectuated...
...it can elevate the bottom without lowering the top...
...The criterion will have to be public use rather than corporate profit...
...Hence the need for income redistribution as a way to ease group tensions...
...Indeed, he needs far less consent today than in some times past when just about every trade and skill had to be licensed...
...In most cases, the corporate board is not aware of the evil...
...they plan obsolescence, pollute the environment, fool consumers, underpay labor, evade taxes, and turn out products and services that are useless or harmful...
...In pursuit of this prime purpose, corporations do many noxious things...
...A second reason why income redistribution has not taken place is the real need in any society for some locus where large sums of capital will be gathered for purposes of investment in plants, machines, research, employment of labor, or whatever is needed to maintain and expand the economy...
...Rather, this article seeks to explore limits of the corporate role—so that the nation will not shirk its collective responsibility by unloading onto the corporations that which the corporations cannot do...
...it dare not...
...Individuals, families •or •other identifiable groups dominated many companies throughtheir majority or sole stock ownership...
...This impersonality robs the corporation of personality...
...Unions have been recognized with attendant changes in wage and fringe benefit policies...
...But whoever the money managers are, they have one thing in common: a responsibility to serve their constituencies...
...In these cases, the constituents are the people (or funds) entrusted to the managers of the money...
...it meant more for the consumer—goods and services...
...With the poor unable to pay, with the middle leaving or unwilling (increasingly unable) to pay, and with the rich favored by tax legislation making it unnecessary to pay, the city cannot get the funds it needs to fight for its life...
...To counter the threat of exhausting our resources, it is currently proposed that we "freeze" the total economy by setting a goal of Zero Economic Growth...
...Indeed, if a fund or bank manager were so spiritually inclined, he might well think of himself as the righteous servant of the people championing their cause against the great corporation by demanding a maximum return on the invested monies...
...twenty years later, in 1967, it received 5.4 percent...
...Who pays for this expenditure...
...An expanding GNP can do miracles...
...Many students who cannot pay are encouraged to borrow from banks whose investment is guaranteed by the ON THE LIMITS OF "CORPORATE RESPONSIBILITY" 437 state...
...this can mean more and better—for less personal and social cost...
...The second constraint is even more compelling, for even if a corporation can survive against competition but appears to be offering a less than expected return on investment, that corporation will lose the confidence (support) of shareholders and the financial market...
...The corporation becomes the means of capturing massive (often monopolized) markets and the conduit for moving corporate income into individual hands...
...What happened was that GNP (and national income) was growing more rapidly than the population...
...ethnic militancy has been recognized with attendant changes in hiring and promotion policies...
...Recently, the grail has begun to tarnish...
...The number at the pinnacles of finance should be smaller...
...436 GUS TYLER from other institutions, like pension funds...
...Hence, the prime business of ,a corporation is the business of making money for its investors—and for its managers, who must carry this risky responsibility...
...Or if the government were to award multibillion dollar contracts for cleaning up the Hudson River or the Atlantic Ocean, corporations would rush to the rich waters...
...hard-core unemployment has been recognized with attendant changes in manpower training...
...As one "little republic" (to use Blackstone's appellation for a corporation) living alongside other "little republics," the corporation must work out a modus vivendi et operandi with its neighbors...
...States have, indeed, legally restricted or abolished churches, parties, unions, businesses, free masons, and chess clubs when the "society" (really the party in power) felt this to be necessary...
...Fortunately, the choices are not between growth and nongrowth...
...Indeed, a business that did not, as a basic purpose, make money for its owners would soon be dead...
...This becomes possible if national policies are established to: (1) restore...
...They load up the city with a back-breaking payroll...
...The control of corporations is even more concentrated than wealth and income...
...In its opening sentence, the statement of the CED quite appropriately addresses itself to this question of the relationship between the business corporation and the society...
...Without the last, we may well find a rise of social pollution (human decay and disorder) in a sanitized environment...
...The money a corporation pays to a bank for funds that were borrowed is charged as a cost to the corporation and, hence, diminishes the profit...
...Given the four alternatives above—tax incentive, higher price, brake on payrolls, or cut in profits—the corporate compulsion has been to eschew the last— as is natural in the light of the corporate compulsion...
...That leads to group conflict, not to say prejudice and discrimination...
...In those cases where the financing institution has one or more of its men sitting on the corporate board, it is clearly a constituent— sometimes, the constituent...
...To talk of employees, consumers, and the public-at-large as constituents is unnecessarily confusing—and even dangerously illusionary...
...2) recycle...
...But, in another sense, the statement is not true, for a businessman does not have to ask for the consent of the - public in order to go into business...
...The financial community —the banks and other lenders—have a special relationship with corporations, whereby the financier may often opt to be a constituent...
...To invest millions to clean up Lake Erie or billions to decontaminate oceans is hardly a profitable undertaking for corporate management charged by bond and stockholders to provide a return on investments...
...in 1962, the top 1 percent held 33.3 percent...
...In each case, the corporation (nonfinancial or financial) is cast in a heroic role...
...The process becomes clearer when individual income is separated from corporate profits...
...The state floats a bond issue underwritten by major financiers— usually organized with a noncompetitive syndicate...
...3) Even with Zero Economic Growth, our economy will continue to waste—if it runs as it has in the past...
...yet their manufacture, packaging, sale, repair, removal all add up to our vaunted GNP...
...it is the substitute for class struggle...
...The first part of this statement—business functions by public consent—is true in only a partial sense, namely, that if the public wished to deny business the right to function it could do so by outlawing a given business or by socializing all business...
...The effect is that many people find it difficult to satisfy their aspirations...
...But to assume that a corporation is— in a sense—a creature of society, created consciously to serve the needs and to respond to the will of that society is to misread the true nature of corporations...
...It is assumed that poverty wears a black face and that a light complexion leads to affluence...
...The underwriter gets his handling fee...
...If the cost is passed onto the consumer, then he is absorbing the expenditure...
...The waste and pollution may not multiply exponentially because the machine will not be driven at ever higher speeds...
...Why has there been so little, if any, progress in dealing with this central economic problem...
...Here, the society has failed to effect a more equitable redistribution, despite the efforts of labor and liberal political movements •and corporate expressions of concern...
...But now, with mounting ecologic worries, the wasting of resources becomes a central societal concern...
...By 1949, however, the movement toward increasing concentration was under way...
...But even in those cases where a corporation performs a social good—education, environmental cleanup, job training—the righteous deed becomes a commodity for which others must pay...
...2) Management must concern itself with realizing a level of profitability that its stockholders and the financial market consider to be reasonable under the circumstances...
...By a process of careful enlistment, it should be possible to compose a congenial congregation of about 200 who are the real power...
...The utility recruits in the "ghetto," trains and employs black youths...
...This concentrated power is multiplied by control over such nonpersonal institutional finances as mutual funds, pension funds, trust funds, etc...
...The expenditures for training are counted in when some public service commission sets the rate—and the cost is carried by the consumer...
...Consider a third case of a financial corporation that has shown its public-spirited mien by calling for a tremendous expansion of a state's system of higher education—an unquestionable good...
...fewer than half of the 200 largest non-financial corporations were under management control...
...such labor does not devour resources, but reclaims lost resources...
...A corporation makes an expenditure to clean up a river into which it has been dumping waste...
...Sometimes these two constituencies—management and labor—have common interests, such as increasing the market for the product or protecting the market against foreign competition...
...This does not mean that the corporation, with its imperatives dictated by its nature as directed by its constituents, can disregard the other constituencies in society...
...But they have been endangered— as have unions, universities, the military, and even government itself—by an ambience of anger, by a dissolution of the social order on which they are founded...
...The maldistribution of income is also at the root of "middle" America's restlessness...
...The friction between producer and consumer is inherent in the desire of both parties to get as much as possible for what has been put out...
...Second, because the future of the GNP appears limited by ecologic considerations...
...The number of people in charge of that world is relatively small...
...Up to now, the growth of the GNP was, in and of itself, considered to be good...
...Business functions by public consent, and its basic purpose, is to serve constructively the needs of society—to the satisfaction of society...
...Corporations must (like unions, colleges, political parties, churches) ask themselves: "What can I do, institutionally, to help keep this society from flying apart...
...We combine in the United States a relatively rigid distribution of income with enormous pressure for achievement...
...What is new, a contribution of the post-war years, and particularly the last decade, is the shift from individual to institutional corporate ownership...
...In the U.S...
...The employees, if they are unionized, are constituents of another organization, electing their own leaders to represent them...
...In an oversimplified cartoon of this concentrated cosmogony of income, wealth, and control, it might seem easy to instill a regnant sense of social responsibility in the corporate world...
...If everybody in the U.S...
...the managers and executives are under duress to justify the expectations of owners, investors, lenders...
...In 1947, for instance, the median family income (in constant 1968 dollars) was $4,716...
...In sum, it is not necessary to stop growth or add to unemployment in order to preserve and restore our resources...
...Although banks play a central role in almost all of these, they are not the only money managers...
...Since these Iast calculations are based on estate tax returns it is not unreasonable to believe that the top 1 percent holds even a greater percentage than stated...
...But now, as we face the possibility of limited resources, we must begin to question not simply the size but also (more significantly) the nature of the GNP...
...Moreover, the satisfaction of aspirations is regarded as competitive with other individuals and groups...
...are white: of the 5,047, 000 families listed as "poor" in 1970, only 1,363,000 were black...
...This does not mean that a corporation can mindlessly go its own sweet way without regard for the feelings of the society...
...The maldistribution of income is at the root of some of our most serious social problems...
...ON THE LIMITS OF "CORPORATE RESPONSIBILITY" 439...
...Hence there was more for everybody— rich and poor alike...
...Growth meant more for the worker—jobs...
...For financial institutions the operation is pure profit...
...If a wage and salary increase is denied, delayed, or reduced, then the employees absorb the cost...
...In this connection, two major restraints are noted: (1) "No company of any size can willingly incur costs that would jeopardize its competitive position and threaten its survival...
...This sort of recomposition of the GNP does not come easily or naturally to private entrepreneurs...
...In the same manner, the consumers compose a separate constituency, although rarely do they find the kind or organized expression typified by a corporation or a union...
...Over the years, the present top-heavy distribution of income has been structured into the economy by an even more top-heavy distribution of wealth...
...In this case, the taxpayer not only subsidizes manpower training for a corporation (or several corporations) but also pays for the costs of a school that is run as a profit-making operation by a corporation...
...A realistic appraisal of a business corporation's social role must begin with a realistic view of what a corporation is—especially what it is in relation to the society as a whole as embodied in government...
...Now, this normal operation becomes socially significant...
...At the same time, these disorders drive the more affluent out of the city— depriving the inner urban areas of funds...
...In a Soviet country, this accumulation of capital is the function of the state...
...Median family income is about $1,000 below the official "modest but adequate" income of the Department of Labor...
...To date, this tragedy of waste bothered only tidy efficient souls who felt that such waste was sinful in a society where too many lived in want...
...third because among the many national policies implicit in a comprehensive design—such as a policy on air, water, waste, land use—must be included a national policy on income distribution...
...Hence business corporations, like other associations, must be mindful of the public mood—or else...
...There are, of course, certain "social" acts corporations can perform that are also quite profitable...
...They are likely to be better informed and better intentioned than most...
...A more recent questioning of simple "growth" as a solution to our economic problems arises out of ecologic sensitivities...
...In the last half-century, the business corporation has adjusted policies to accommodate the other constituencies...
...Similarily, to develop and install processes to prevent pollution could be a costly proposition that a company would be loath to introduce unless its competitors had to do the same...
...The men who organize it do so to realize profit...
...Corporations are necessarily limited," the paper points out, "by various internal constraints on what and how much they can do to improve society...
...The 1973 statement of the Committee on Economic Development (CED) on "Social Responsibilities of Business Corporations" recognizes the necessary limits of a company's commitment to the societal interest...
...The facts reveal that most of the poor families in the U.S...
...accumulation is the function of the big earners whose income is so huge that they, of necessity, must revert much, if not most of it, to "production" rather than personal "consumption...
...and now the persons who hid behind the persona ficta have been replaced by persona ficta called "institutions...
...What are these institutions...
...They are mutual funds, pension funds, insurance companies, trust funds, and—above all—banks that move their own funds and manage personal and common trusts and pension funds...
...In the next decade, there will undoubtedly be considerable movement by corporations into the social area—out of social pressures and enlightened self-interest...
...Social goodwill, therefore, can operate only in that thin area of cost advantage a corporation is willing to surrender to its competitors without losing its competitive edge...
...Moreover, a 1968 study on the historic trend of income shares shows that there was little change in the half-century from 1910 to 1961...
...If they could be persuaded as to the right course for America by a faculty composed of Ralph Nader, Ken Galbraith, Charles Reich, and Billy Sunday, the job would be done...
...In short, the end of racism would not be the end of poverty...
...In 1929...
...No doubt, some money managers see themselves in this hallowed light—as makers and monitors of a people's capitalism...
...This quick vivisection of the body corporate uncovers no locus for a social conscience...
...Contractors who erect these buildings borrow from lending institutions—often the same or satellite institutions...
...In this discussion of income and wealth, the focus has been on individuals and families rather than on corporations...
...Meanwhile, the discomforted bank pushes to have the state absorb handling charges—at the expense of the taxpayer or the student borrower...
...Many of the conflicts arising between corporations and other constituencies are inherent in the corporate being...
...A man (or institution) holding 49 percent of the stock in a corporation actually has 100 percent of the control...
...For instance, the payment of an annual salary of a quarter-million dollars to a corporate executive is an income for him but is charged up as a cost to the corporation...
...What then is a business corporation—by its very nature...
...Assuming that this becomes national policy—in whole or in part—there are three consequent questions: (1) Unless population as well as the economy is frozen, the number of unemployed will mount every year...
...The more recent collision between manufacturers and the public over pollution is inherent in the corporation's need to produce as cheaply as possible and to avoid such outlays as are not necessary to the conduct of its own business...
...But we will still continue to eat up and poison valuable and limited resources— without replacement...
...Indeed, quite the opposite: a master effort to clean up and recycle could become a prime service (good) in calculating the GNP...
...But these are all cases where corporate profit coincides with a public need, where doing good means doing well...
...None is prepared consciously to commit suicide as a blood sacrifice, for the salvation of the social order...
...The basic purpose of a business is to serve its owners in the same way that the basic purpose of a union is to serve its members...
...Similarly, any gains by individuals through the sale of stock are not counted as corporate profit...
...The corporation, like the banks, gets it funds increasingly from institutions...
...At the end of World War II, the ownership of wealth was less concentrated than after World War I—creating the illusion that wealth, as well as income, was being "democratized...
...If the society is offended too often and too deeply, it will turn its wrath upon the erring subsociety...
...At present, the GNP includes many items that are socially useless or downright noxious...
Vol. 21 • July 1974 • No. 3
