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Saturday, September 5, 2009

The Corporation | Externalized Costs and Political Contributions - SOC142 extra credit

When corporations operate, according to the movie, The Corporation, they tend to externalize costs. In other words, these legal entities end up making third parties, which have no direct interest in the corporation, bear large amounts of the cost of running and maintaining the enterprise. These costs range from the funds needed to build and maintain the necessary infrastructure, like roads, trade arrangements and the legal system, to the human cost of the unthinking and impersonal actions of the corporation.

These human externalized costs, borne by the rest of society extend beyond the borders of the host or parent nation. But the human costs borne by the host nation are significant. When corporations fall under financial pressure, the fiduciary responsibility to stockholders legally bind and restrict the actions that corporations can conduct. That legal bind force corporations to do their best to externalize all costs, and maximize the return to the stockholders, but not to all the stakeholders. Who are the other stakeholders? Employees, employee families, retirees, neighbors, local governments, etc.: ordinary people and social institutions. These stakeholders are just the ones in the home nation. Additional stakeholders are the environment, future generations, and anyone or anything affected by the actions of the corporation now and in the future.

Society as a whole pays the price for layoffs, union busting and habitat destruction. Corporations longing for maximum returns don’t care if they employ sweatshops, outsource work, or dump toxic waste. In order to maintain control in regions of the world where the political, legal and enforcement infrastructure is not as mature as that of Western society, corporations can muster military support to ensure that they receive what they need or want, as made evident by many corporations having a long history of condoning human rights violations.

Why do corporations act this way? Simple: Corporations have no feelings.

So should corporations be able to donate to political campaigns, given that they externalize costs? Corporations have no beliefs. They have no feelings, emotions or life. Corporations are legal persons, yet if they were flesh and blood individuals, they would be considered psychopathic legal persons, committed to mental health facilities to protect themselves and others. Ordinary people who are committed are not normally allowed to donate to political campaigns. Such people are restricted by society from influencing societal decisions.
Corporations externalize costs so much that they not only dump expenses on society, they also manage to divert tax dollars into their coffers as well as influence tax policy. Many corporations buy this type of political influence by donating to political campaigns. But since corporations hold allegiance to profits and not to any flag, they shouldn’t be allowed such political access. Should disloyalty to a nation be rewarded with political influence in that nation? I don’t think so.

So should any organization be able to contribute to political campaigns? I think the question is somewhat leading. It assumes that the current political process is acceptable and that the practice of soliciting and making political contributions should be allowed to continue in its present form. I don’t think we can continue and survive with those assumptions. I think the entire electoral process in the United States requires an overhaul, and the first change would be to restrict political contributions to a general election fund, divorcing the influence of corporate money from the inevitable corruption that it brings when contributions are made to individuals. Political contributions have more influence in politics than the will of the people who comprise the ostensibly sovereign entity.

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