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For Your Information New Self-Serving Definition of "Fundamental Corporate Commitment"In August of 2019, the U.S. Business Roundtable, made up of nearly 200 of the country's largest corporations and banks, issued a new "Statement on the purpose of a corporation."[1] For a number of decades, the Business Roundtable has endorsed principles of shareholder primacy -- that corporations exist principally to serve shareholders. In this, they were following the dictum of the economist Milton Friedman that "the one and only social responsibility of business ... is to increase profits." However, the Business Roundtable appears to have changed its tune. In the Preamble to the new statement, it now claims that the language of the old one regarding responsibility "does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable." It goes on to say that "While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders," i.e. not just shareholders. In the statement, the CEOs, who represent many of the biggest corporations in the U.S. such as BlackRock, Vanguard, Apple, American Express, Lockheed Martin, Goldman Sachs, Walmart, Bechtel, Boeing, and Exxon, and others, now pledge commitment to a range of "stakeholders" by "delivering value to our customers ... investing in employees [which] starts with compensating them fairly and providing important benefits ... dealing fairly and ethically with our suppliers ... supporting the communities in which we work ... protect[ing] the environment by embracing sustainable practices across our businesses." And, at the very end of the list, is "generating long-term value for shareholders." Indeed, there have been various phases over the last 100+ years as to how the oligarchs have described their purpose, depending on the arrangements necessary at the time to advance their interests and the "spin" that goes along with it. For these CEO proponents of American pragmatic theory, there is no objective reality. Truth is what "works" in their interest and, to them, reality is only a construct. Thus the financial oligarchy can conjure up new "realities" about the aims and purpose of their enterprises. But once one of these realities stops producing the results they desire, another must be substituted in order to continue to advance their interest. Thus the Business Roundtable CEOs can claim with all certainty one year that their rapacious monopolies serve only shareholders and now say they serve "stakeholders" including workers, suppliers, communities and so on. For these CEO proponents of American pragmatic theory, there is no objective reality. Truth is what "works" in their interest and, to them, reality is only a construct. Thus the financial oligarchy can conjure up new "realities" about the aims and purpose of their enterprises. But once one of these realities stops working or is discredited another must be substituted in order to continue to advance their interest. Thus the Business Roundtable CEOs can claim with all certainty one year that their rapacious monopolies serve only shareholders. Yet the next year, the leopard spots magically change, and the monopolies claim to "create value" for a range of stakeholders which includes workers, suppliers, communities and so on. Besides obscuring that it is the working people acting on nature who create all new value, what this pragmatic thinking and demagogy covers up is that the current financial oligarchy has had two fundamental aims since the rise of the monopoly capitalist system and imperialism at the beginning of the 20th century. These are: 1) striving for maximum profits by whatever means necessary; 2) preserving, maintaining and expanding their exploitive system, both nationally and internationally. Why are these CEOs resetting their avowed purpose now? When Milton Friedman's dictum of shareholder primacy was adopted back in the 1980s and '90s, this was actually a time when the financial oligarchy had launched a renewed offensive against the workers and people of the U.S., Canada and the world using neo-liberal dogmas, like the claim of shareholder primacy, as justification to slash wages and pensions, privatize public institutions, cut social programs, and other anti-social behavior. "Greed is good," was a Friedman-like mantra of that time and pursuit of private interest was presented as the highest virtue. Today, in 2020, the financial oligarchy is also on a renewed offensive, but the conditions are different than the 1980s. In order to achieve maximum profits and preserve the system, it must further loot the huge reservoir of social wealth created by working people in the U.S. and abroad. This looting has been going on in direct and indirect ways since the rise of monopoly capitalism many decades ago. But in the wake of the 2008 financial crisis and now the COVID-19 debacle, it has been ramped up to an unprecedented degree. Herein lies the dilemma for the Business Roundtable CEOs. How can they justify following the Friedman dictum of being only responsible to their wealthy shareholders, yet going, year after year, with outstretched palms to demand literally trillions of dollars from the public purse? No, the CEOs must now proclaim that they have found a new "social responsibility" to all the "stakeholders" in society; and thus, in turn, the implication is that society must be prepared to permanently backstop the big banks and corporations with trillions of public funds, through bailouts, public-private partnerships, privatizations, subsidies, tax cuts and other means. The Roundtable's statement lies within the recent thrust of the Davos World Economic Forum to push for "stakeholder capitalism" and a "better kind of capitalism." The billionaires of Davos want all of civil society to fall in line behind their agenda, as do the CEOs of the Roundtable. Above all, they do not want an alternative agenda to develop that is put forward by an empowered working class and people. Despite all their talk about "social responsibility," the oligarchs continue unabated to exploit the very "stakeholders" they claim to be serving. The leopard has not and cannot change its spots. Note1. "Statement on the purpose of a corporation," Business Roundtable, June 14, 2020.
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