Sunday, 29 October 2017

Business fantasies - Benefit Corporations and other thought excursions

In the wake of the latest economic breakdown many have been attempting a facelift for capitalism and the so-called B-corps are one of the latest out of this reformist gate. Simply put, they seek to  rehabilitate private for-profit business by registering those among them who do various good things. There is much that enterprises can do to make their operations more durable and socially beneficial, but if they wish to remain corporations there are several things they legally can't do, within their overall requirements of "fiduciary duty" and fiscal  responsibility, i.e. make as much money as possible for their shareholders, who are motivated by self-enrichment.

Recent changes to law in the U.S. that have been welcomed by B-corps allow them to evade the shareholder benefit maximization provision but whether enterprises in general choose to do that is permissive. As a result, corporations are not required to embed anything like worker democracy, community programming or environmental sustainability unless they choose to. And given the benefits that arise for money-motivated shareholders the majority of enterprises will avoid the administrative overheads of the stringent B-corp registration process.  To believe otherwise, as the B-corporation movement wants, to is to believe in a fantasy, something no self-respecting, let alone other-respecting, enterprises should do.

For now, social economy promoters like TorontotheBetter are left to urge enterprise change hopefully, but at some point comprehensive social economies require more affirmative action akin to the historical accretion of business health and safety requirements. For instance, if democracy is to become more than a periodic ritual it must be built into daily workplace life. Power comes from doing it, not  as a privilege but as a right. The B-corp initiative risks further elitist separation of the fortunate few from the huddled masses of workers. More B-corps are welcome but serious political change is the necessary condition of society-wide "B-corporatization". A simultaneous embrace of necessary social enablers like healthcare, educational rights and environmental protection for all, as well as B-corporate transformation, are the necessary conditions of an empowered working life, i.e, real democracy.         

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