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The Business Roundtable, MiBiz and the free-market lie

September 4, 2019

On August 19, the Business Roundtable, a coalition of the most powerful corporations in the US, released a statement “revising” their Purpose of a Corporation.”

MIBiz reported on this announcement, included a copy of the text of the Purpose of a Corporation and provided two responses to the statement from the Business Roundtable. The responses were the CEO of Steelcase and a GVSU professor of business, Tim Syfert.

The Business Roundtable was founded in 1972. This group is different than the Chamber of Commerce, in that they are only made up of large corporations and not all businesses, like the Chamber.

The Business Roundtable also exists as a way for corporations to collectively lobby Congress at the federal level. According to OpenSecrets.org, the Business Roundatable  spent $23 million on lobbying in 2018 and $27 million in 2017. Since 1998, when OpenSecrets started tracking this data, the Business Roundtable has spent on average $15 million a year lobbying Congress on public policy.

The responses from the CEO of Steelcase and the GVSU business professor both accept the fundamental premise of the statement and the purpose of corporations. And while the GVSU professor provides some mild criticisms around the issue of sustainability, neither of these responses provides any serious examination of the Business Roundtable Purpose of a Corporation statement.

An anti-Capitalist response

The Business Roundtable statement begins with this sentence:

We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.

There is no evidence to support such claims that the free-market system will do all the things this statement claims. The notion that the free-market generates “good jobs” is a joke. How many people in the world have a job that pays a living wage, provides just health benefits, a just pension and allows people to have lots of vacation time?

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When it comes to the free-market and a healthy environment, no one in their right mind would say that this has been true. The free-market system is dependent upon fossil fuels, which has caused and is continuing to cause massive levels of environmental destruction, from the extraction of fossil fuels, the transportation of fossil fuels and the burning of fossil fuels.

The Purpose of a Corporation statement then identifies 5 “stakeholders” that they are committed to, listed here below. We provide a brief response to each of these points, which are in bold.

  • Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations. It’s all about consumers, not human beings. Capitalism needs consumers. Capitalism does not want people to critical think human or believe they have agency. Capitalism convinces the public that they need most of the environmentally destructive, toxic and unhealthy products that are produced by corporations. Food Justice advocates have been saying for years that most of the food that is sold in grocery stores is more like food stuff, highly processed and unhealthy for humans to consume.
  • Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect. What exactly does fairly compensate even mean? The Business Roundtable, like the Chamber of Commerce, has fought paying people a livable wage and providing them with just and full benefits. Using the language of “compensating them fairly” is nothing more than rhetorical, since most corporations have demonstrated over the past century that workers only get treated well when they fight for economic justice and workplace democracy.
  • Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions. Again, very vague language here. Ask yourselves, are farmers treated with respect and dignity in economic terms, by how they are compensated from food brokers, food processing corporations or grocery stores? Most small farmers work long hours and rarely are they fairly compensated for their work in growing food. Large farmers are more likely to survive, since they are compensated by the US Farm Bill, which is a form of government subsidies and has nothing to do with the free-market” system.
  • Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses. There are examples in every community that corporations operate where public health and a sustainable environment are disregarded. The list is long, but some examples are: what the coal industry has done to communities and the environment across the county; the pollution generated by corporations like Dow Chemical & Dupont; the deforestation caused by the paper industry or the beef industry; groundwater contamination from CAFOs that exist all over the country; look at what uranium and other mining corporation have done to local communities; and what about Wolverine Worldwide as a recent example of complete disregard for environmental and public health.
  • Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders. Corporations and their commitment to shareholders is actually a true statement, since they need people to buy into the shareholder model, allowing corporations to use people’s money to do whatever they want. On the matter of transparency, corporations do practice this to a degree with shareholders, but NOT with the public. In fact, corporations are fundamentally totalitarian entities which are not accountable to the public. You can not walk into a corporation and demand access to documentation or to observe their manufacturing processes. Well, you can demand these things, but most corporations will remove you, forcibly if necessary, from their property and not allow you to come back.

This newly revised Purpose of a Corporation statement is nothing more than rhetorical window dressing and means little considering how many people in the US are living in poverty, how many people cannot afford housing & health care, and how corporations are one of the largest contributors to the Climate Crisis we are all facing.

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