There is a way for the US to be competitive and for its businesses to be good corporate citizens
By Terry Mollner
It is time to stop our silent support for President Obama and state two facts he, other politicians, corporate leaders and the press will not speak.
First, the highest silent priority of both the Democrats and Republicans is our competition with China. On this matter both parties are fully united and it takes precedence over everything else. Remember it was only 25 years ago that the Chinese people were wearing Mao uniforms and peddling bicycles. Today China has the second largest economy in the world and will be the biggest in only a few years. If they did this in 25 years, just think where they will be in 10 more! This country has manipulated its currency and we have allowed them to do it. What did we get in exchange? Our multinational corporations have been allowed to operate in China and it is now where they have the greatest presence of any country on the planet.
The assumption that this is good for Americans, the result of trickle-down thinking to Americans from our corporations, is false. By the laws and court decisions of our land the highest priority of a for-profit corporation has to be the financial interests of the shareholders, not the American people. By law in China the highest priority of their corporations has to be the Chinese nation. Thirty-two of the 33 multinational corporations in China are controlled by the Chinese government. China has learned it is more important on earth today to be a corporation than a nation.
American corporations will sell to the highest bidder anywhere in the world. And guess who now has all the money needed to buy them? And, who has figured out the next major competition on the planet will be over natural resources? Military conquest is very old school now. And guess who will now be going around the world buying up natural resources in the ground or natural resource companies? Remember four summers ago when President Bush told China they could not buy Unicol? The same day they did not buy Unicol, they bought two oil companies in Canada and we did not read a word about it, unless you read Wall Street’s financial newsletters.
The absolutely ridiculous terms Obama is about to agree to – reducing popular tax breaks for mortgage interest, health insurance, charitable giving and retirement savings, along with reducing the top tax rate from 35% to somewhere between 23 and 29% – are a complete sellout to the illusion this will increase our ability to compete with China. It gives more money to wealthy who investors in hopes it will feed into “our” companies. This is naïve. They will invest it where they can make the best return; that will be in any company on the planet, including in China! And, you will notice there is absolutely no discussion about increasing taxes to corporations or reducing military spending.
Folks, this is not just naïve; this is absurd. If we do not find a way for our companies to “give priority to the American people,” this is a selling out of the American people to the American rich and not doing a single thing to change China’s increasing ability to buy “our” companies. America’s rich and America’s companies are not “primarily” loyal to America; they are “primarily” loyal to individual financial return.
The second fact is in 1981, Jack Welch, then CEO of General Electric, said at a shareholders meeting that if you are not number one or two in your product area, get out of it. What he was saying is that monopoly is illegal but “duopoly,” where two companies control a product area, is legal. This has been the priority within the multinational community ever since. Proctor & Gamble is the largest consumer products company on the planet. It used to have over 1500 products. Today it has 250, and nearly every one is number one or two on the planet! Every company, and merger and acquisition you read about, is about becoming number one or two in its product area. What Warren Buffet won’t tell you is that his secret to success is finding the up and coming duopolies.
I am on the board of Ben & Jerry’s. With Häagen-Dazs we control 86% of the super premium ice cream market in the USA and we, owned by Unilever and Nestlé—respectfully the number two and three consumer product companies on the planet, know we will be number one and two in super premium ice cream on the planet: we are each in 30 countries and continually expanding. So I have firsthand experience of this priority in operation.
You do not read about the above two secrets because our leaders think it would be disruptive to social calm. In addition, no one has an answer to China. The simplicity is it is either “we give priority to the individual” (simplistic capitalism) or “we let the state be a dictatorship under the guise of giving priority to the people” (simplistic socialism or communism). There is a third option: we could “freely choose to give priority to the common good” (common good capitalism) – or call it “moral capitalism.” Companies have embraced environmentalism because the consciousness of the public had been raised and so companies adjusted. Someday these same companies will embrace “common good capitalism” as well, but only when the consciousness of the public has been raised to demand it. Their legal highest priority has to be the financial interests of shareholders. So they can only do it when it is justified on this basis.
The Civil Rights Movement, Woman’s Movement and Environmental Movement all were about raising our collective consciousness to embrace in every way an obvious more mature truth: blacks are equal to whites, women are equal to men, and if we do not all self-consciously manage our natural resources for sustainability, we will all die. Clearly it is time to begin raising the consciousness of all on the planet, in China as well, to the importance of transitioning to common good capitalism before the immature demand that we go to war with China. This lunacy is surely in our future if we do not begin to raise the consciousness of all to the importance of transitioning to common good capitalism, where “we freely choose to give priority to the common good so we can all survive and thrive.”
About Terry Mollner
Terry Mollner, Chair of StakeHolders Capital, Inc., a socially responsible asset management firm in Amherst (www.stakeholderscapital.com), is also a founder of the Calvert Social Investment Funds and member of the board of Ben & Jerry's. He lives in Shutesbury, Mass.
This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.
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