Corporations and Citizenship

391 Pages·2014·2.658 MB·English

by  Greg Urban (editor)

Corporations and Citizenship
Democracy, citizenship, anD constitutionalism
rogers m. smith and mary l. Dudziak, series editors
a complete list of books in the series is available from the publisher
Corporations
and Citizenship
edited by
GreG Urban
University of pennsylvania press
philadelphia
Copyright © 2014 University of pennsylvania press

all rights reserved. except for brief quotations used for purposes of review or
scholarly citation, none of this book may be reproduced in any form by any means
without written permission from the publisher.
published by
University of pennsylvania press
philadelphia, pennsylvania 19104-4112
www.upenn.edu/pennpress
printed in the United states of america
on acid-free paper
10 9 8 7 6 5 4 3 2 1
a catalogue record for this book is available from the library of Congress
isbn 978-0-8122-4602-5
C o n t e n t s
Chapter 1. Why for-profit Corporations and Citizenship? 1
Greg Urban
part i. are for-profit Corporations in the pUbliC interest?
Chapter 2. Corporate power and the public Good 31
Lynn Sharp Paine
Chapter 3. how big business targets Children 47
Joel Bakan
Chapter 4. Corporate social purpose and the task of Management 57
Jeffery Smith
Chapter 5. Corporate purpose and social responsibility 74
Jeffrey L. Sturchio and Louis Galambos
Chapter 6. education by Corporation: the Merits and perils of for-profit
higher education for a democratic Citizenry 88
Amy J. Sepinwall
Chapter 7. enron and the legacy of Corporate discourse 107
Rosalie Genova
Chapter 8. saving tepCo: debt, Credit, and the “end” of finance in
post-fukushima Japan 127
Hirokazu Miyazaki
vi Contents
part ii. does GovernMent reGUlation of Corporations proMote
Well-beinG in a deMoCratiC soCiety?
Chapter 9. the rise and embedding of the Corporation: Considerations for
american democracy and Citizenship 143
Walter Licht
Chapter 10. Citizens of the Corporation? Workplace democracy in a
post-Union era 165
Cynthia Estlund
Chapter 11. politics and Corporate Governance: What explains policy
outcomes? 183
Peter Gourevitch
Chapter 12. the nature and futility of “regulation by assimilation” 199
Jonathan R. Macey
Chapter 13. Multinational Corporations as regulators and Central planners:
implications for Citizens’ voice 232
Katharina Pistor
Chapter 14. ethnicity, inc.: on the affective economy of belonging 249
Jean Comaroff and John Comaroff
Chapter 15. Corporate nostalgia? Managerial Capitalism from a
Contemporary perspective 267
Karen Ho
Chapter 16. Can for-profit Corporations be Good Citizens? perspectives
from four business leaders 289
Nien-hê Hsieh
notes 301
list of Contributors 367
index 373
acknowledgments 383
C h a p t e r 1
Why For- Profit Corporations and
Citizenship?
Greg Urban
In July 2011, Christopher Cristwell, a Starbucks barista in Chowchilla, Cali-
fornia, posted a YouTube video. The video showed Cristwell, shirtless but clad
in a green Starbucks apron, singing a song about the barista experience. The
song delivers a steady rant about customers, his job, even his friends: “Hello
rich white lady, I already know what you want / you want a skinny vanilla latte,
young debutante / well that drink won’t make you skinny, you gotta work for
that / and just in case you’re running, I just called you fat.” Two months later
Cristwell was fired. Alan Hilowitz, a Starbucks spokesperson, said: “While
Christopher was expressing his own views in the video, the disparaging re-
marks about our customers and company are unacceptable and out of line
with our commitment to our customers and partners.”1
The right of free speech is enshrined in the U.S. Constitution. It is a right
characterizing the relationship between citizens and their government. It is
even a right, according to the 2010 Supreme Court decision in Citizens United
v. Federal Election Commission, that business corporations seem to possess.
The court ruled that the First Amendment to the U.S. Constitution prohibits
the government from restricting political expenditures by corporations, be-
cause such restrictions might limit the range of viewpoints to which listeners
would be exposed. Corporations, in short, have a right to free speech.
The Cristwell incident and the Citizens United case highlight a critical is-
sue, one of central concern in this book: the relationship between for-p rofit
2 Greg Urban
business corporations and citizenship. Modern business corporations receive
legal recognition from national (or constituent state) governments. They or-
ganize and regulate much of the daily lives of a considerable portion of hu-
manity. However, they are not themselves typically constituted internally
around ideals of national belonging, such as democracy, citizenship, and egal-
itarianism. Starbucks has the right to free speech in the United States, but
Cristwell does not have the right to free speech as a “partner”— the term the
company uses for “employee”— of Starbucks.
This book assembles a multidisciplinary group of scholars to address the
role of modern for- profit corporations, as a distinctive kind of social forma-
tion, within democratic national states. In what measure do corporations pro-
mote the public interest? In what measure can and should elective governments
shape corporations so as to promote the well-b eing of citizens? These are
among the key questions taken up in the following chapters.
In his first annual message to Congress in 1901, President Theodore Roo-
sevelt proclaimed: “Great corporations exist only because they are created and
safeguarded by our institutions; and it is therefore our right and our duty to
see that they work in harmony with those institutions.”2 However, corpora-
tions are not only regulated by citizens through their governments. They also
regulate many aspects of the lives of the citizens who work for them, and they
have profound influence over the lives of countless others. The question of
regulation has become especially acute in the case of large multinational cor-
porations. A study done more than a decade ago found that, of the hundred
largest economies in the world, only forty- nine were countries.3 The remain-
ing fifty- one were business corporations. How and in what measure should
corporations be regulated by nations? How much of the regulation of social
life around the planet has been taken on by corporations themselves?
While business enterprises are self- organizing, requiring the initiative of
individuals who expect or hope to gain financially from the endeavor, not all
business enterprises are corporations. The Mexican drug cartels, for example,
operate internationally and are estimated to have revenues of $10 to $25 bil-
lion annually, or as much as 2.5 percent of the Mexican gross domestic prod-
uct.4 They are definitely self-o rganizing, profit-s eeking commercial enterprises.
If the Mexican cartels were a single entity, they would rank on the Fortune 500
list somewhere between 100 and 250—t hat is, between Alcoa or Staples, on
the larger side, and H. J. Heinz or Nordstrom, on the smaller. However, they
are not corporations because they lack one key ingredient: legal recognition
by national (or their constituent state) governments. The relationship between
Why Corporations and Citizenship? 3
business corporations and governments, as well as citizenries, is central to the
very nature of these social entities, as well as the main focus of concern for the
authors of this book.
Are For- Profit Corporations in the Public Interest?
Lynn Sharp Paine, the John G. McLean Professor of Business Administration
at Harvard Business School, opens the first of two sections in this book by
observing: “The news is filled with cases of corporate mismanagement, influ-
ence buying, and wrongdoing that threaten the public interest.” Yet, she con-
tinues, “corporations have done a great deal of good—e ven beyond their
routine business of providing society with needed products and services— a nd
could, if suitably led and governed, do even more.” Those of us lucky enough
to live in the developed world need only look around to see the benefits cor-
porations bring to life, from lighting, air conditioning, automobiles, jetliners,
and clothing to computers, smartphones, plasma screen televisions, video
games, and movies.
On April 24, 2012, a newly formed company named Planetary Resources,
Inc., announced that it planned to mine asteroids for resources. According to
its website, the company aims to “develop low- cost robotic spacecraft to ex-
plore the thousands of resource- rich asteroids within our reach. . . . [and]
then develop the most efficient capabilities to deliver these resources directly
to both space- based and terrestrial customers.”5 This is not among the exam-
ples provided by Paine in her chapter, but it is one reflective of her general
theme: that for- profit corporations are well suited to tackle many of humani-
ty’s problems and challenges, in the case of Planetary Resources, our need for
minerals and other resources that are in limited terrestrial supply.
A 2006 article in the Proceedings of the National Academy of Sciences
concluded: “Virgin stocks of several metals appear inadequate to sustain the
modern ‘developed world’ quality of life for all Earth’s peoples under contem-
porary technology.”6 In other words, if everyone in the world is to enjoy the
standard of living found in the United States and Europe today, we need to
find new sources for metals. Enter Planetary Resources, whose website ex-
plains: “Asteroids are filled with precious resources, everything from water to
platinum. Harnessing valuable minerals from a practically infinite source will
provide stability on Earth, increase humanity’s prosperity, and help establish
and maintain human presence in space.”7