Corporations Reimagined

by Michael Lerner

The Nation magazine, May 22, 2000


Most politicians fear to challenge corporate power, not only because they need financial support during elections but for a deeper reason as well. They fear that corporations can always threaten to move their base of operations, leaving joblessness and economic devastation in their wake. The various branches of the progressive movement each seek some minimal restraints on corporate power. But the history of the environmental movement demonstrates the problem here: For every victory won-at the expenditure of huge amounts of energy-there emerge three or four new areas where unrestrained consumption and the extension of the market to every corner of the world threaten the planet while developing new labor markets that pay exploitative wages.

And as the ethos of selfishness and materialism generated by the market and glorified by the media as "human nature" increasingly presents itself as "common sense" to the peoples of the world, resistance seems foolish to many. They decide that the best they can do is to try to "make it"-even at the expense of so many others around the world who will never get their share. While some may take refuge from the values- and love-corroding aspects of the market by attempting to build ultra-nationalist or religious fundamentalist communities around a different vision, most will passively acquiesce, convinced by the pundits' rhetoric that "there is no alternative."

But there is an alternative: to change the progressive agenda from its previous focus on "inclusion" (insuring that those who have not reaped the rewards of the capitalist system get a fairer portion) to a new focus on "changing the bottom line." This strategy, which we call "a politics of meaning," aims to change the very definition of productivity and efficiency so that we see institutions as efficient or productive not only to the extent that they maximize money and power but also to the extent that they maximize people's capacities to be loving and caring, ethically and ecologically sensitive and able to respond to the world not only in terms of how we can use it but also with awe and wonder.

That's why we at Tikkun have developed the Social Responsibility Amendment (SRA) to the Constitution. The SRA says this: Every corporation doing business within the United States (whether located here or abroad) with annual income of more than $20 million must receive a new corporate charter every twenty years, and these new charters will be granted only to corporations that can prove a history of social responsibility as measured by an Ethical Impact Report, which will measure the company's sensitivity to the needs of the environment, the community and its employees. The Ethical Impact Report will be compiled by three different constituencies: the corporation itself, the workers (under a requirement of confidentiality) and relevant community organizations around the world that wish to present their case about the social responsibility of the corporation.

To prevent a huge and easily manipulable government bureaucracy from making these decisions, the SRA will create a new system of Social Responsibility Grand Juries composed of twenty-five citizens whose task would be to read the Ethical Impact Reports and receive oral testimony from the corporation, employees and relevant community organizations.

If an SRGJ decided the corporation should not be granted a charter renewal, it would then move to stage two: what to do with corporate resources. The SRGJ would listen to management's plan for how it would alter its behavior to become more socially responsible, and it could hear proposals from other for-profit or nonprofit groups on how they would run the same corporation with more socially responsible policies. The SRGJ would then decide either to award the corporate charter to another group, and with it the assets of the corporation in question, or to put the corporation on probation for three years.

If it gave the corporation a three-year probation, the SRGJ would reconvene three years later to determine whether the changes had in fact taken place, in which case it could restore the charter for the next seventeen years (thus making up the full twenty), or it could determine that the corporation had failed to implement significant changes and award the corporate charter to some other management group.

Grand jurors would be selected by lot from the population but balanced in order to guarantee racial, religious, spiritual, gender and economic diversity. Jurors would be paid (by a corporation's charter-renewal fee), would have subpoena power and could impose contempt citations and prison sentences upon corporate leaders for up to two years if they found that the corporate leaders were withholding vital information or otherwise attempting to disrupt or distort the evaluation process (for example, by trying to discourage testimony of workers or community groups who had negative things to say). They would be assisted in obtaining information on corporate behavior by a corps of Social Responsibility Agents, which would operate much like a public defender's office, except with funding written into the amendment and not subject to electoral shifts.

The SRA moves away from the old demonization of corporate leaders and recognizes them as another group caught in the dynamics of the capitalist market-and provides them with a way of explaining to their stockholders that the corporation must become more ecologically and socially responsible or else lose its corporate ownership, a far greater risk to them than the costs of social responsibility. And by introducing the notion of an Ethical Impact Report, the SRA challenges market notions of how to judge efficiency.

No, I don't expect that the SRA will pass our state legislatures or Congress anytime soon. Just as the Equal Rights Amendment never passed yet had a monumental impact on public discourse and understanding, the campaign for the SRA could similarly shift the dimensions of American political discussion. If liberal and progressive forces made the SRA a central item on their agenda and talked about it as the way to create "a new bottom line," we could provide people with a plausible picture of how it might be possible to live in a world in which loving and caring could have real social power.

Here's how to launch the SRA: Use the next few years to involve all sectors of society in a conversation about what should be included in the Ethical Impact Report used to judge whether a corporation is entitled to charter renewal. And popularize the notion of a "new bottom line." And if we have the courage to call the SRA a fundamental spiritual challenge to the ethos of selfishness and materialism, we might soon find that our SRA campaign is attracting sectors of the population who feel ripped off by the spiritual deadness and moral decline of our society but who have never understood the connection between the spiritual crisis and the dynamics of the market. The SRA could give people confidence that their own highest values might someday have a chance to shape social reality. The loss of that kind of hope leads people to believe there is no alternative. The re-creation of it is likely to be the first positive outcome of the SRA campaign.


Michael Lerner, editor of Tikkun, a bimonthly Jewish critique of politics, culture and society, is rabbi of Beyt Tikkun synagogue in San Francisco. His new book, Spirit Matters, which details what law, medicine, education and economic life would look like if we adopted a "new bottom line," will be published by Hampton Roads in June.

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