Updated: May 24
The most controversial aspect of the Congressional stimulus package evolves around its “help” to corporations. As I understand it, the legislation permits the Federal Reserve to offer cheap loans to corporations of almost unlimited amounts. So, what aspects of corporations is this package supposed to stimulate?
In my book, Corporate Integrity, I first defined corporations as social entities, which is to say that they are creations of on-going communication patterns and behaviors, and you can change them by changing these patterns. This means they are not biological entities or biological persons. (The Supreme Court made all of this very confusing by evidently not understanding the distinction between biological and legal “persons.”) That’s another story. In any case, a clear description of a corporation needs to include five dimensions: the legal, as property, communal, social, and environmental.
Corporations are legal creations. Most of American corporations have charters from Delaware, which gives them the right to engage in assigned activities. These laws can be changed, and probably should be. We really need a national charter for corporation. The point is that corporations are always subject to civic control.
The laws allow us to treat corporations as property. They can be bought and sold. “Public” corporations allow investors to purchase stock, which initially gives the previous owners capital and later gives managers leverage to borrow money. For stockholders, the value of a corporation depends on the fate of its stock price. That’s not true for other corporate stakeholders.
Corporations are not just property. They are also places of work. These places provide a location for the development of community, meaning, and well-being, depending on the design of the workplace. In contrast to the corporation as a legal entity, the corporate workplace is grounded in biological personhood, Even though corporations are property, it is a moral mistake to treat workers in the same way.
Corporations are also social entities and have a social function or purpose. If you ask why automobile companies exist, the answer is found by looking at the transformation system and defining their purpose in this system. As I argued in Civilizing the Economy, the primary purpose of corporations is determined by their role in a civic economy designed to provide people with what they need. Corporations, in other works, are providers.
Finally, corporations belong to and are part and parcel of the environment. They extract from the planet and return waste to it. They increase or decrease global warming. They influence the future habitat for our children and grandchildren.
So given these different dimensions, what should our government stimulate?