|How Popular Movements Can Confront Corporate Power and Win
By Michael Marx and Marjorie Kelly, YES! Magazine
Posted on August 29, 2007, Printed on September 4, 2007
CORPORATE POWER LIES BEHIND nearly every major problem we face--from
stagnant wages and unaffordable health care to overconsumption and
global warming. In some cases, it is the cause of the problem; in other
cases, corporate power is a barrier to system-wide solutions. This
dominance of corporate power is so pervasive, it has come to seem
inevitable. We take it so much for granted, we fail to see it. Yet it is
preventing solutions to some of the most pressing problems of our time.
With global warming a massive threat to our planet and a majority of
U.S. citizens wanting action, why is the U.S. government so slow to
address it? In large part because corporations use lobbying and campaign
finance to constrain meaningful headway.
Why are jobs moving overseas, depressing wages at home, and leaving
growing numbers under- or unemployed? In large part because trade
treaties drafted in corporate-dominated back rooms have changed the
rules of the global economy, allowing globalization to massively
accelerate on corporation-friendly terms, at the expense of workers,
communities, and the environment.
Why are unions declining and benefits disappearing? In large part
because corporate power vastly overshadows the power of labor and
governments, and corporations play one region off against another,
busting unions to hold down labor costs while boosting profits, fueling
a massive run-up in the stock market.
Why were electricity, the savings and loan industry, and other critical
industries deregulated, contributing to major debacles whose costs are
borne by the public? In large part because free market theory, enabled
by campaign contributions and lobbying, seduced elected officials into
trusting the marketplace to regulate itself.
With all this happening, why do we not read more about the pervasiveness
of corporate power? In large part because even the "Fourth Estate," our
media establishment, is majority owned by a handful of
Big corporations have become de facto governments, and the ethic that
dominates corporations has come to dominate society. Maximizing profits,
holding down wages, and externalizing costs onto the environment become
the central dynamics for the entire economy and virtually the entire
What gets lost is the public good, the sense that life is about more
than consumption, and the understanding that markets cannot manage all
aspects of the social order.
What gets lost as well is the original purpose of corporations, which
was to serve the public good.
A Movement for the Public Good
The solution is to bring corporations back under citizen control and in
service to the public good. The main components of such a movement
already exist--including organized labor, environmentalists, religious
activists, shareholder activists, students, farmers, consumer advocates,
health activists, and community-based organizations.
We've seen the power of ordinary people working together on the streets
of Seattle in 1999, challenging the World Trade Organization. We've seen
them achieve impressive results curbing sweatshop abuses, limiting
tobacco advertising, challenging predatory lending practices at home and
abroad, and protecting millions of acres of forests, to name just a few
We've also seen the growth of community-friendly economic designs like
worker-owned enterprises, co-ops, and land trusts that, by design, put
human and environmental well-being first.
Focus on Corporate Power
Each of these movements advocates for healthy communities, for a moral
economy, and for the common good. If they acted together, they would
possess enormous collective power. But as yet there is no whole, only
disconnected parts. Despite many achievements, the gap in power between
corporations and democratic forces has widened enormously in recent
Activists and citizens are beginning to turn this around. We can build
on this work. But if we are to close the gap in power, our strategies
must evolve. We need to dream bigger, to speak with one voice across
issue sectors, and to act more strategically. We need to focus less on
symptoms of corporate abuse and more on the underlying cause--excessive
corporate power. We must recognize that ultimately our struggle is for
power. It is not just to make corporations more responsible, but to make
them our servants, in much the same way that elected officials are
We need what the movement now lacks: a coherent vision of the role we
want corporations to play in our society and a strategy for achieving
that vision. It's about putting We the People back in charge of our
future, rather than the robotic behemoths that set their sights on
short-term growth and high profits, regardless of the consequences.
The streams of many small movements must flow together into a single
river, creating a global movement to bring corporations back under the
control of citizens and their elected governments. The urgent need for
unified action impelled a small group of organizations to initiate a
long-term Strategic Corporate Initiative (SCI), of which we are a part.
A Way Forward
Over the past 18 months, the SCI team interviewed dozens of colleagues
and progressive business executives to develop a coherent, long-term
strategy to rein in corporations. Three major strategic tracks emerged:
1. We need to restore democracy and rebuild countervailing forces that
can control corporate power.
At the community level, this means elevating the rights of local
municipalities over corporations. Communities should have the right to
determine what companies will do business within their jurisdiction, and
to establish requirements like living wage standards and environmental
At the national level, restoring democracy means separating corporations
and state. Corporations and the wealthy should no longer be allowed to
dominate the electoral and legislative processes.
At the international level, the task is to create agreements and
institutions that make social, environmental, and human rights an
integral part of global economic rules.
2. We need to severely restrain the realms in which for-profit
Most extractive industries (fishing, oil, coal, mining, timber) take
wealth from the ecological commons while paying only symbolic amounts to
governments and leaving behind damaged ecosystems and depleted
resources. The solution is to develop strong institutions that have
ownership rights over common wealth. When commons are scarce or
threatened, we need to limit use, assign property rights to trusts or
public authorities, and charge market prices to users. With clear legal
boundaries and management systems, the conflict over the commons shifts
from a lopsided negotiation between powerful global corporations and an
outgunned public sector, to a dispute resolved by deference to the
3. We need to redesign the corporation itself, as well as the market
system in which corporations operate.
Companies' internal dynamics currently function like a furnace with a
dial that can only be turned up. All the internal feedback loops say
faster, higher, more short-term profits. And maximizing short-term
profits leads to layoffs, fighting unions, demanding government
subsidies, and escalating consumerist strains on the ecosystem.
To prevent overheating, the system needs consistent input from
non-financial stakeholders, so that demands for profit can be balanced
with the rights and needs of employees, the community, and the
To end "short-termism," company incentives--including executive
pay--should be tied to measurements of how well the company serves the
common good. Stock options that inflate executive pay should be outlawed
or redesigned. Speculative short-term trading in stock should be taxed
at significantly higher rates than long-term investments. Companies
should be rated on their labor, environmental, and community records,
with governments using their financial power--through taxes, purchasing,
investing, and subsidies--to reward the good guys and stigmatize the bad
At the same time, we need to celebrate and encourage alternative
corporate designs, such as for-benefit corporations, community-owned
cooperatives, trusts, and employee-owned companies.
The paths outlined here do not represent impossibilities. With a
citizens' movement, we could turn these musings into reality in 20
Building a Global Citizens' Movement
How can we change laws regulating corporate behavior when corporations
dominate the political process? The answer is that change begins with
the people, not their government. It always has. Civil society
organizations and communities can align their interests to produce a
wave that government leaders must either surf upon or drown within.
The people control the vital issue of legitimacy, and no system can long
stand that loses its legitimacy, as fallen despots of the 20th century
have demonstrated. Corporations have already lost much of their moral
legitimacy. Business Week in 2002 found that more than four out of five
people believed corporations were too powerful. A national poll by Lake,
Snell, Perry, and Mermin two years ago concluded that over
three-quarters of Americans distrust CEOs and blame them for the loss of
jobs. An international poll by Globe Scan recently found corporations
far behind NGOs in public trust.
Trigger events lie ahead that will create further openings for change.
We can expect to see new global warming catastrophes, unaffordable
energy price spikes, and new corporate scandals. We can capitalize on
these openings if we can help people connect the dots--making the link,
for example, between excessive CEO pay, companies' short-term focus, and
the inability of the private sector to manage long-term problems like
the energy crisis and global warming.
We also need conceptual frames that link various movements together into
a common effort. Currently our economy is dominated by a Market
Fundamentalism frame, based on the belief that when self-interest is set
free, Adam Smith's "invisible hand" will create prosperity for all. Also
dominant is the Private Property frame, which justifies actions by
executives and shareholders to exploit workers, communities, and the
environment in order to maximize the value of stockholder and executive
"property" in share ownership.
We can advance new frames. "Moral Economy," for example, is a frame that
puts the firing of thousands of employees and simultaneous awarding of
multimillion-dollar bonuses to executives in a moral context. Suggested
by Fred Block of the Longview Institute, the Moral Economy frame invites
the introduction of new system forces into market dynamics in order to
protect the moral order, and to counteract the amoral, short-term,
self-interested behavior promoted by Market Fundamentalism.
Within the overarching framework of a Moral Economy, other frameworks
like Community and the Commons challenge the supremacy of individualism
and self-interest in the Market Fundamentalism frame. Community
well-being becomes the standard by which business practices are judged,
and communities themselves the arbiters of whether standards are met.
The Commons represents our shared property and wealth, which is not to
be exploited for the selfish benefit of the few.
New conceptual frames, trigger events, a crisis of legitimacy--elements
like these can serve to help build a citizens' movement. But we cannot
simply wait for this movement to form spontaneously. At the
international level, we need regional organizations to come together to
agree on overarching priorities. At the national level, we likewise need
discussions that forge strategic priorities. At the community level, we
need to create a network of municipalities working together to challenge
corporate rights, to promote alternative business forms, and to
inventory and claim our common wealth assets. Communities can also take
the lead in creating public financing of campaigns, and in tying
procurement and investment policies to corporate social ratings.
The idea is not that people will drop their issues and adopt new ones,
but that we can learn to do both at once. We can knit ourselves into a
single movement by adopting common frames and by integrating strategic
common priorities into existing campaigns. For example, campaigns
covering any issues from the environment to living wages could demand
that targeted companies end all involvement in political campaigns.
As individuals, we can relegate our identities as consumers and
investors to secondary status, elevating to first place our identities
as citizens and members of families and communities, people with a
stewardship responsibility for the natural world and with moral
obligations to one another. We can stop buying the story that government
is inefficient and wasteful, grasping that the real issue is how
corporations and money dominate government. We can stop thinking that
the solution is more Democrats in power, and realize it is more
The transformative changes we need will not be on any party's agenda
until a citizens' movement puts them there. It's up to us to build that
movement. By joining together--by taking on the common structural
impediments that block progress--we can make it possible for all of us
to achieve the variety of goals we're currently struggling for.
How would reducing the underlying power of corporations affect today's
issue campaigns? Ending corporate campaign contributions and political
advertising would benefit a great many public interest causes. How often
in recent years have initiatives to protect forests, increase recycling,
provide healthcare coverage, and raise minimum wages been defeated by
corporations who outspent their civil society opponents by a ratio of
over 30 to one? We've all witnessed elected leaders move to the
political center once they started receiving a steady flow of corporate
Likewise, if we could reduce the 13,000 registered corporate lobbyists
in Washington, D.C. and end the revolving door between government
regulators and corporations, would a handful of companies be allowed to
own the lion's share of our media? Would savings and loan, energy,
transportation, and tobacco companies still have been de- or
unregulated? Would oil and coal companies still drive our national
Imagine what it might be like in 20 years if our efforts are successful
and people could once again govern themselves. A line would be carefully
drawn between corporations and the state, reducing financial influence
over elections and lawmaking, making possible a whole new generation of
progressive elected officials committed to social transformation.
In 20 years, imagine that the institutions of the global economy are
overhauled so that labor and environmental issues are integrated into
trade policies, and impoverished nations are freed from unpayable
international debts. Trade and investment rules promote fair exchange,
and national governments have the policy space to support social and
environmental goals at home. Transnational corporations that take
destructive action are held accountable in a World Court for Corporate
In 20 years, imagine community self-governance has become the new norm.
No longer can companies open new stores in communities where they are
unwanted, or play communities off one another to extract illegitimate
public subsidies. We value and protect our precious common wealth, from
ecological commons like air, water, fisheries, and seeds, to cultural
commons like music and science.
In 20 years, imagine that it is a violation of fiduciary responsibility
for corporations to pay CEOs obscene amounts, or to aggressively fight
unions and lobby against environmental safeguards. Responsible companies
protect the environment as though there is a tomorrow, and they view
worker knowledge and company's reputation in the communities where they
operate as their greatest assets. Imagine such companies receive
preferential treatment in government purchasing, taxation and investment
policies, while irresponsible companies find themselves barred from
Imagine we have a new national policy to make employee ownership as
widespread as home ownership is today. And alternative company
designs--like cooperatives and new, for-benefit companies--grow and
Imagine, in other words, that We the People are able to reclaim our
economy and society from corporate control. Daring to dream that such a
turn of events is possible--and charting the path to get there--is a
critical challenge of our new century.
Michael Marx is director of Corporate Ethics International (CEI) in
Portland, Oregon. Marjorie Kelly is with the Tellus Institute in Boston.