Gongol.com Archives: May 2022
May 17, 2022
A matter of corporate principle
The passion some people bring to questions of how businesses are operated borders on the religious in fervor. When we see how much people seem to care about the conduct of businesses, it's quite a wonder that there aren't more organizations dedicated to operating businesses of their own under more outspoken mission statements. ■ Not mission statements of the bland style generated during exercises like corporate retreats, but actual statements of purpose -- like a recitation of priorities whose achievement is considered more important than a marginal dollar of profits. There is nothing that stands in the way of people forming cooperatives or other mutualized forms of business that would permit them to operate according to lofty principles. ■ Passionate opinions surface about all kinds of companies and for all sorts of reasons. Right now, it's easy to stumble across loud debates about whether Elon Musk should be allowed to buy Twitter, whether the production of baby formula should be concentrated among a small number of producers, or whether video-game makers should have corporate policies regarding abortion. ■ Many, if not most, of these subjects regard matters of prudential opinion. They are almost never as self-evident as the memes would have the public believe. And yet, lots of people very loudly proclaim their certainty in one direction or another, and many of them insist that government intervention of one form or another is necessary, in order to reconcile private-sector business behavior with particular public-policy desires. ■ If these subjects (and many others) matter enough to justify using the force of law to intervene in private business beyond the scope of ordinary regulations like anti-trust, then surely they matter enough that we should expect people to put their money where their mouths are. ■ The simplest method is by ordinary shareholder activism, a tool used sparingly (and often no more than merely for show) but often underrated as a means of using democracy within the economic system. When institutional investors like CalPERS and union trust funds introduce shareholder motions, they count on leveraging only a sliver of ownership in a company into much larger effects on how the business operates. ■ But there are other methods, too. Anyone who is a member of REI or who holds an insurance policy from State Farm is involved in a form of cooperative or mutualistic ownership, and there is no reason whatsoever that other companies couldn't be operated under the same ownership principles. Third-way forms of ownership (those that are neither strictly private-for-shareholder-profit, nor strictly public), organized with certain democratic principles embedded in their charters, could be used to enter into all kinds of industries if people were willing to match their own fervor about how companies ought to be run with some startup capital. ■ And then there is the lingering proof that a single person can revolutionize how investments are made: Jack Bogle, whose feelings about how money ought to be managed were so strong that he created the truly low-cost "mutual" fund industry with the founding of Vanguard. From time to time, certain "ethical investing" funds gain a share of the public's attention, but if more people were really serious about the way things ought to be, principle-driven investing would be far more common and would reflect more of the passions so often visible online (and on picket lines). ■ There is no shortage of imagination to the way that people seem capable of expressing how they want to see businesses behave. It remains a mystery why equal imagination isn't invested into organizing businesses around shared sets of principles. The LDS Church has done it with Deseret Management Corporation -- "a global operating company, managing for-profit entities affiliated with The Church of Jesus Christ of Latter-day Saints [...] under a unified mission". Nothing practical should stand in the way of people with other "unified missions" from using business much the same.