The document discusses the history and evolution of corporations in America from their origins to modern times. It describes how corporations have gained increased legal protections and rights while facing less constraints, allowing them to prioritize profits and shareholder value over broader social obligations. The document considers various proposals for reforming corporations to make them more responsive institutions that balance business interests with social responsibilities.

1. The Soul of Capitalism: Opening
Paths to a Moral Economy -
Command and Control
William Greider

2. Legally privileged structure and
unbounded scale
The corporation is the most effective form for organizing business
activity. Corporations organize the terms of everyday life, more surely
than politics or religion.
Systemic disorders inflated stock market financial scandals
The commanding heights of corporate control belong to management
insiders, a few intimate financiers and the large-bloc share owners
A successful company may remain oblivious to social injuries
Reverend Emil: The capitalism is irresponsibility developed into a system

3. What exactly is the public purpose of the corporation
that entitles it to favored legal status?
What should society be able to expect from the corporation?
How the business organization should be shaped and
governed, constrained and reoriented on behalf of broader
social obligations?
Solutions will be found in real-world experimentation
REEL QUESTIONS REAL ASNWERS

4. “HUNGRY GHOST”
 “In Buddhist
iconography, the
hungry ghost is
depicted as a person
with a huge stomach
and pencil-thin neck
who cannot get
enough. There are a
lot of these people
running corporations.”
(Paul Hawken)

5. CEOs: inflated egotism & hyperpersonalization
of corporate
 The CEO ultimately gets brought down by the very personality
characteristics that made him successful in the first place.
 Their whole life has been fighting and overcoming people who
say no, you can’t do it, don’t do it, its illegal. These guy say, “to
hell with you, we’re doing it, we’re getting it done, nobody can
stop me.”

6. New financial doctrine – “shareholder value”
Shareholder value kept corporate managements closely aligned
with the interests of the absentee owners. Shareholders have at
last gained real influence over the companies because
“shareholder value” compelled the CEO’s to pursue the
stockholders' singular objective of earning greater returns.
 Decreasing in stock prices; punishment (fired or pushed aside by
corporate takeovers).
 Increasing shareholder value; award, their own pay and
incentives like stock options were pegged to the stock price too.

7. Shareholders risk financial implosion
Shareholders& company CEO
CEOs did not personally share the risk, because the artificial gains in
stock prices could still be harvested by those who knew when to get out
• It is better to have honest auditors and independent directors. But more vigilant
watchdogs will not correct the problem if they are so concerned about absentee
owners.
Problem is structural not personal!

8. The corporation’s negative tendencies may be suppressed for a time by
regulatory enforcement. But these traits surface again and produce the
same flagrant damage…If one aggressive company breaks through the
barriers, others swiftly follow..
The corporation resembles a shrewd and muscular wild animal that
sooner or later figures out how to break out of his cage. Instead of
building new cages, we should investigate the DNA of these
creatures.

9. The Genesis of Godzilla
 The decisive alterations that shaped and
empowered the modern corporation
occured during several decades starting
in the 1880s, and were accomplished
through legislation and judicial decisions.
Great national industrial corporations
Oil, steel, railroads, electrical generation

10. Firing Shareholders, Hiring CEOs
 The shareholders were cut out of any significant
influence, while corporate insiders became more
empowered to decide things in isolation, more
independent of social influences. And the insiders
became personally insulated from the consequences of
their actions.
insider problem

11. insider: someone with access, privelege, or knowledge of
information and services (1)
bank account Executive manager
*Enron scandal ( suggested documentary: The Smartest Guys In The Room on YouTube )
INSIDERS CAPITALISM

12. Enron Facts:
Most of the top executives were tried for fraud after it is revealed in
November 2001 that Enron's earnings had been overstated by several
hundred million dollars.
Enron was once ranked the sixth largest energy company in the world.
Enron shares were worth $90.75 at their peak in August 2000 and dropped to
$0.67 in January 2002.
Top Enron executives sold their company stock prior to the company's
downfall.
Lower-level employees were prevented from selling their stock due to 401k
restrictions and many subsequently lost their life savings.
Enron paid the top 140 executives $680 million in 2001. Kenneth Lay
received $67.4 million and Jeffrey Skilling received $41.8 million.

13. The Genesis
 Corporation originated in early American history as a
government-authorized exception to the everyday routins of
commerce
 They were given explicit privileges and public obligations
because these private organizations were able to undertake
large projects, like building canals or railroads, that promised
great public benefit (George Washington)
 Popular resistance to the corporation was fierce throughout the
19th century because merchants, mechanics and farmers well
understood the power implications of giving competitive
advantages to these large, growing business organizations
 Most preferred form

14. Race to the bottom
 ecological crises
 Citizens are unable to define reliable limits on the
corporation’s purposes and performance in advance,
people must passively experience the environmental
consequences of exotic new industrial substances or
production techniques until the harm becomes visible
around them
 Elaborate scientific proof
 Biotechnology - Genetically altered seed, foodstuffs and
animals may be harmless to the future
 If there are destructive consequences, the damage
already will be widely present in our lives

15. The Genesis
 Supreme Court-----The corporation shall henceforth be
treated as a “person” for purposes of law, and be entitled
to the same constitutional protections previously accorded
only to the citizens who are human beings
 Corporations, like human beings, seek stability in their
lives and use their predatory size to secure it
 Fourteenth Amendment’s right to “due process”
 Decisions to protect the corporations
 A company could execute its mergers and acquisitions
with only majority approval from the shareholders. This
change effectively alienated shareholders from their
property and secured control of the firm for the insiders,
including largest stakeholders
 Proper corporate structure and scale can best be
determined by periodic tournaments of gladiatorial
combat

16.  The antiturust laws that originated during the
“robber baron” era to contain the overbearing
size of industrial giants have been largely
neutered
Antitrust Social trust

17. In the early 1900s, “limited liability”
 Major investors and other insiders could walk
away from their failures and start again
elsewhere while bankruptcy courts picked
over the corporate carcasses they had left
behind
 Risk of enterprise from the owners to the
creditors
 The full costs of failure are “socialized”
 Encourages a more adventurous capitalism
 Injustices (Enron)

18. Corporations and Values
 Uncle Cicero-It suggests how much our system of
personal values has been degraded by the
conventions of modern capitalism
 The corporation functions as a principal source of
American inequality
 Redistributes the value upward and outward to
others
 CEOs making more than 500 times what their
company’s workaday employees earn
 People did rebel
 Working people organized collectively in unions
to fight for better wages, control of the work
place, and safe, secure working conditions
 Politicians legislated new public rules

19. Unequal Treaty among Classes
 Supreme Court------ “Lochner” decision
 invalidate a pioneering labor law enacted by New York
state to require a ten-hour workday and safer working
condition in bakeries
 Court used the Lochner doctrine to block new social and
economic reforms
 More than two hundred state and federal laws were
invalidated: minim-wage standards, health and safety
codes, workers’ right to organize, and many others
 New Deal (1937) Government has powers to
protect society’s general
health and welfare by regulations

20. Unequal Treaty among classes
 Modern government, meanwhile, continues to
elaborate new legal privileges for corporate
“personhood” and in some exotic ways that
were revealed in the wake of the Enron
scandal
 Avoiding U.S taxes without losing any of
benefits and protections of being American
 Bank loans become “revenue” on the
company’s books. Its debts mysteriously turn
into “assets”
 Companies must report the same set of
numbers to the tax collector as they report to
their shareholders

21. Frankenstein
 “People create what looks to be a
nifty machine, a robot, called
the corporation. Over time robots
get together and overpower the
people. They redesign themselves and
reconstruct law and culture so that
people fail to remember they created
robots in the first place, that the
robots are machines and not alive.
For a century, the robots propagandize and
indoctrinate each generation of people so they grow
up believing that robots are people too.”
–Richard Grossman

22. Can the corporation be refashioned into
a more responsive, less powerful
institution without destroying the
qualities that make it effective as a
business organization?
BIG CHALLENGE

23.  A handful of midwestern and western farm states
prohibit corporations from owning farmland in
agricultural production
 Protecting local companies and jobs
 A reform idea by Ralph Nader

24. Changing the Status quo!
 There are concentrate differences in
corporate behaviour, good, bad and terrible.
That coul become the basis for modifying
corporate legal privileges, not in search of
utopian perfection, but in order to reward
what is better and penalize what’s worse
 Measuring is not easy as percantage or legal
definitons
 Systematic research and reporting
 Making distinctions is a way to gain leverage
for changing the status quo

25.  All shareholders are not equal, despite the
conventional lore that pretends otherwise. It is
the large-scale investors who become the
intimate insiders with management and who
control the large decisions. The company treats
these big guys differently, since they are often
the controlling owners and so should the law.

26. Reducing “limited liability”
Increasing exposure to personal loss
Structural reforms

27. The Missing Political Question: Why the
corporate “persons” damage the interests
of human “persons”?
• “public audit(ors)”
* Our discussion has focused on the dysfunctional elements, how corporations
acquired their expansive powers and misuse them. But we cannot grasp fully what
is dysfunctional in the modern corporation until we also learn to appreciate its
virtues.

28. THANKS
FOR
JOINING! EMRE ALPER