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Moral Obligations of Personhood
Elizabeth Warren has a big idea. She wants to nationalize a large swath of the economy. No, really. She has introduced the “Accountable Capitalism Act” [pdf] a bill that will surely go nowhere, but — were it to become law — would require companies with more than $1B in revenue to obtain charters as United States corporations. The charters would create all sorts of batty legal obligations for big corporations. I recommend at least reading the one-page summary linked. This thing is a doozy.
Matt Yglesias at Vox is obviously excited over the idea because this monstrosity would “redistribute trillions of dollars from rich executives and shareholders to the middle class.” Kevin Williamson is less sanguine about the proposal because “it would constitute the largest seizure of private property in human history.” I see it as neither the great hope of humanity nor the end of America as we know it because there is no way something like this could happen in one bill. I’m curious, however, about this statement from the explainer:
American corporations tried to balance the interests of all of their stakeholders, including employees, customers, business partners, and shareholders. But in the 1980s, corporations adopted the belief that their only legitimate and legal purpose was “maximizing shareholder value.”
Yglesias refers to this shift back to a fanciful state of egalitarianism as “the moral obligations of personhood.” As he further explains:
The conceit tying together Warren’s ideas is that if corporations are going to have the legal rights of persons, they should be expected to act like decent citizens who uphold their fair share of the social contract and not act like sociopaths whose sole obligation is profitability — as is currently conventional in American business thinking.
The idea that corporations focus only on profit to the detriment of everything else is where the error of this thinking can be found. It fails to recognize the synergy (I really hate that word) between corporate behavior and profit. Amazon didn’t get as big as it is by enslaving its workers or abusing its customers. Warren and company think corporations serve only their shareholders at the expense of the “public interest,” but they utterly fail to see that the only way corporations can deliver the goods to their shareholders is by discovering and slavishly serving the public interest. As Kevin Williamson explained eight years ago:
Private enterprises, and businesses especially, usually do serve something that might deserve to be called the public interest or the common good, because they create social value. How do we know they create social value? Mostly because of this so-obvious-it’s-ingenious, but still kind of counterintuitive, idea that comes from economics: If people in society did not in fact value what these businesses were producing, they would not give them their money. Social value = the stuff society actually values. The counterintuitive part, at least for you guys who graduated near the top of your classes at very prestigious law schools and made a lot of money in litigation or bond-counsel work or whatever but have not spent a lot of time selling hotdogs or landscaping or painting houses, is this: Profits are evidence of the creation of social value, not deductions from the sum of the common good…
Businesses do not create social value because they really want to, usually…
But normally, businesses create social value as a byproduct of the relentless Darwinian pursuit of profit — and the ones that fail to create much social value do not achieve much profit.
The socialists on the left (one might reasonably refer to them as fascist because they now propose implicit rather than explicit control of the means of production) miss the main point of capitalism: mutually beneficial, voluntary exchange. No corporation is using the threat of violence to engage in trade with individuals against their will. That authority resides only in government, and government is the entity Warren wants to bring to bear on these voluntary exchanges. She wants to remove the one motivation corporations have to serve the public interest. We see how well that worked with healthcare. It turned out that both parties to the transactions required a government mandate for the exchanges to occur.
I don’t fear this bill passing. There are too many structural safeguards in our system to prevent spectacularly bad ideas from becoming law barring extraordinary events like the Dems controlling all elected branches of government with a filibuster-proof majority in the Senate. I do, however, fear these ideas taking root. Yes, corporations should always strive to be better “persons.” But, the way to bring this about is more capitalism, more mutually beneficial voluntary exchanges between individuals and corporations, not the arbitrary hand of government.
Published in General
Nor do corporations vote.
Well, in the City of London, they do. But not here in the US.
The GOP has a great opportunity to tie every Democrat running for office to these crazy ideas (no capitalism, no borders,…). However, I have not seen anything in the mailers I get or speaking in public. The national GOP should be leading all candidates instead of letting them flounder. A smart GOP would have three sets of talking points: A) top 3 accomplishments; B) top 3 promises to work towards; C) top 3 crazy things Democrats stand for. Local candidates would tailor those to the district. I file the “no profits” in the “crazy things Dems. stand for” list.
This is a fantastic suggestion. Even if the PTB in the GOP heard it I’m sure they’d summarily dismiss it.
Yep. This is scariest thing about the Left – they simply do not have any limiting principles. Why this is, I don’t fully understand; although, I think their belief in the moral superiority of their intentions plays a large role.
What happens when Chick-Fil-A Inc. or Neighborhood Cake Decorators, Inc. adopt the moral obligations of personhood?
Thats actually the legal responsibility of the companies management, and they can be sued if they don’t do that.
America was never great.
Cuomo told us so.
yeah. For once the Left has embraced the full crazy/socialist mode. Aren’t using the “moderate and reasonable” mask they usually hide behind. If the GOP doesn’t savage them on this, they really are the Stupid Party.
I think GOP incorporated wants to lose. They hate DJT that much.
I thought she was a womyn of the people.
I don’t see the correlation here.
Bernie’s plan isn’t a plan. That’s 3.2 trillion per year. The entire federal budget right now is roughly 4 trillion per year.
Bernie’s looking to buy votes to take care of himself. If he can do that by selling the idea that Medicare for All is a good idea, he doesn’t care about the outcome. He cares about himself. All the rest is hot gas belching out of both of his decrepit vents.
A few years ago I guy I knew said that everything went to hell when Harvard Business School started teaching business students that corporations are supposed to maximize profit. Apparently there used to be a golden age where people would put their life savings at risk to start a business, in the hopes of being successful and operating at break-even. It’s like hearing Grandpa Simpson talk about the good old days. The statement was so shockingly naive I didn’t even argue because this guy was living in a fantasy world.
I’m curious where the Senator’s retirement funds are invested. Organic soybeans and hemp farms, one assumes. The reality is that capital is risked by corporations to earn a profit. People invest in stocks, which provide cash to firms to invest in new and updated products and services, and they expect some kind of return on those stocks – or they’ll find another stock that does provide a return, in both dividends and stock price increases.
But this is just stupid (from Warren’s Accountable Capitalism Act):
This shift is a root cause of many of America’s fundamental economic problems. In the early 1980s, America’s biggest companies dedicated less than half of their profits to shareholders and reinvested the rest in the company. But over the last decade, big American companies have dedicated 93% of their earnings to shareholders.
The shareholders own the risk of the stock they’ve bought. It’s not some magic token that never loses value. The value of a stock can drop to zero. If there’s a bigger risk, the expectation is of a bigger reward. How do companies do that, ensure reward?
By providing something of value to their customers.
What Warren provides is value to herself, in terms of reaching higher levels of public office.
No, it is theoretically possible to transfer the amount of money we all pay in insurance to the government for it to then use for medicare for all.
This doesn’t mean it is a good plan (its terrible) but it is coherent, where as Warren’s isn’t.
I’d kind of like to see what we pay total (not per person) in health insurance premiums each year. It has to be less than what the muppet is proposing.
Then where do we shift the costs to? Canada?
Just switching payers to the gov’t isn’t a plan, unless the plan is to mandate widescale rationing and an eventual federal takeover of hospitals. There’s nothing coherent or economically viable in anything Bernie thinks about or plans for.
Excepting, of course, his own personal wealth and retirement. For that, he has a sharp, realistic focus.
I’ve been poking around a bit trying to find that number – I’m sure it’s there I just couldn’t find it.
I did find some interesting data from Kaiser (not Sauze’). A ton of data but worth the look, around premium costs and annualized rates of increase.
https://www.kff.org/report-section/ehbs-2017-section-1-cost-of-health-insurance/
http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2017
It is explained above. We would have increased taxes that are a bit higher than what we pay in insurance. Again, this is not acknowledgement that it is a good idea, only that it is coherent.
I think where I disagree is not how it’s paid for, it’s that it will not cover costs. Medicare doesn’t cover costs now. Putting everyone on Medicare doesn’t change that. Medicare determines its reimbursements. I’m assuming that’s the same. That means Medicare will continue to short hospitals and providers on reimbursements.
I don’t think that’s coherent. I also think slapping a bunch of incremental tax increases and changes to tax structure to shift the tax burden to Medicare payments still falls under feeding universal Medicare, which, as I state above, is untenable as it exists today.
Is Medicare coherent today? Not if you look at its unfunded liabilities.
This all could be me, though, not wanting to give a huckster and an idiot (Sanders) an ounce’s worth of credit.
I guess the “robber barons” of the Gilded Age were motivated by enlightened civic duty. Good to know.
Or just reincorporate somewhere else: Canada, the Bahamas, Switzerland, Singapore, take your pick. Most large corporations are multi-national already anyway, just pick a foreign office to designate as the new HQ and print up some new business cards. Problem solved.
I cannot recommend enough to watch the “Exchange” series on Real Vision with Grant Williams, Simon Mikhailovich, Dan Oliver. Congress and the Fed have centralized and financialized everything and that’s why the political system has gone haywire. Watch that and tell me who the statists are. Trump and Bernie are popular for good reason.
It’s 10 bucks for a two-week pass or something. Watch the David Stockman interview as well.
Government Is How We Steal From Each Other™
***edit***
It’s 90 whole minutes. Watch it. Ping me if you want more recommendations.