What’s next after capitalism?

The conviction of Bernard Ebbers, former CEO of WorldCom is yet another indication of out-of-control corporations.

You could argue that the WorldCom case shows the system is working and that this wrong-doing is being stopped. Look a bit closer, and you’ll see that the cases where there is vigorous response from government prosecutors are those in which shareholders were hurt. When it is employees (5,000 of whom die on the job each year in the US), consumers, the environment, or our democracy that is harmed by corporate behavior, the wrongs go largely unabated.

Positive Futures Network (PFN) board chair David Korten’s book, When Corporations Rule the World, explains the problem with limited liability publicly traded corporations. It is not because there are bad people in positions of power, he points out (although sometimes there are). It is because, unlike locally rooted small businesses, the structure of these corporations virtually require executives to put short-term profits before everything else—including life itself.

The inherent problem with these corporate structures is becoming clear, but why haven’t we done anything about it? When Enron energy managers are caught chortling over ripping off elderly ratepayers by manipulating electricity prices, or Halliburton walks off with billions of dollars in no-bid contracts or Wal-Mart pressures its suppliers to close down US factories and move production to low-wage China and pays US retail employees so poorly that many must rely on public support, why is there resounding silence about the structures that are at the root of these and so many other destructive activities?

The reason may have to do with the fact that much of the media is owned by these very same corporations, as journalist Bill Moyers so eloquently points out in the current issue of YES!

But I believe another barrier to change is the idea, most eloquently stated by former British Prime Minister Margaret Thatcher, that There is No Alternative (TINA). With the fall of communism, TINA says, we are stuck with corporate capitalism no matter how bad it gets. After all, we depend on corporations to supply us with food and jobs, cars and entertainment, so we don’t realize we have any other choice.

This is one of the reasons a new book by historian and political-economist (and former PFN board member) Gar Alperovitz is so important. America Beyond Capitalism points out two very simple, but powerful ideas. One is that the current system is not necessarily any more permanent than any other economic system of history. History is full of big shifts. These shifts often catch the people of the time by surprise – rarely do contemporary commentators see what is coming. But the transformations can be profound, and we are approaching, if not in the midst, of such a time.

The second point is that the alternatives to domination by large corporations are already all around us—and growing. There are many variations, from small businesses to enterprises owned by townships, from employee-owned companies to cooperatives.

When you look closely at these alternatives, you see that these are not radical, un-American experiments. They are as ordinary as the Phelps County Bank of Rolla, Missouri, an employee- owned bank that treats its employees and customers as though they are central to their business success, which indeed they are. (Since profits go to employees, each one retires with a substantial nest egg—assuming they run the business effectively for long-term sustainability.) Or the Green Bay Packers, owned by fans. Here’s a team that cannot up and leave town if taxpayers refuse to build a fancy new stadium. (There is actually a great deal of loyalty both ways, since the community knows they owns the team).

Putting these and many other examples together, as Alperovitz does, paints a picture of a far more democratic, economically stable future. It shows that contrary to TINA, the race to the bottom is not inevitable. We don’t have to send our jobs to low-wage countries and our poisonous wastes to the communities of the powerless, and we don't have to put our democracy up for sale to the highest bidder.

Instead, we can re-orient our economies to meet the needs of people and to be accountable to local communities. When companies have a long-term commitment to a place — rather than to this quarter’s profit statement — environmental responsibility comes much more naturally.

The next issue of YES! will include a review of America After Capitalism. Meanwhile, you can download posters about this topic and read excerpts at a website focused on the book.

Note: Rereading this, I am aware that it is neither true nor fair to say that nothing is being done about the structure of the corporation. The Program on Corporations, Law, and Democracy, POCLAD, for years has been challenging the corporate charter, corporate personhood, and other legal building blocks of corporate power.