The 99% means the vast majority of people. Optimizing their quality of life is the common good and the goal of democracy. This goal can be achieved only if it is the top goal of the system's dominant agents, since the goal of a social system's dominant agents determine the goal's of the system.
No one can predict where a balancing loop with an optimize-quality-of-life goal will take the human system. The innovative examples shown above are mere conjecture, because no human political system has ever been in the optimize-quality-of-life mode for long.
Suppose progressives could unite behind the common vision of reengineering society to have the optimize-quality-of-life goal. This seems to be our dream anyhow. All this article is doing is analyzing how to get there. It appears this can be done by destroying The Runaway Corporate Dominance Reinforcing Loop and simultaneously creating The Good Corporate Servant Balancing Loop, all by changing the goal of the modern corporation. This requires:
The modern for-profit corporation was never rigorously designed. It evolved. This has led to what we have today. Let's call this Corporation 1.0 and Corporatis profitis.
The one and only goal of Corporatis profitis is short term profit maximization. This goal caused The Runaway Corporate Dominance Reinforcing loop drawn above to appear. The node on the right shows how "drip by steady drip, over time all that favoritism tips the scales and changes the rules of the game to favor corporations." Below is the stunning result of centuries of that steady drip:
In the first attribute Homo sapiens has the advantage. In the second attribute they are equal. In all the rest corporations have the overwhelming advantage. Poor Homo sapiens doesn't stand a chance, unless we put everything else aside and focus our efforts on one single thing: resolving the root cause of the corporate dominance problem. As Part One explained:
The main root cause is mutually exclusive goals between the corporate life form and Homo sapiens. Large for-profit corporations now dominate the planet. Their goal is maximization of short term profits. The goal of people is to optimize long term quality of life, for those living and their descendents. These goals are so incompatible they cannot both be achieved in the same system.
If the root cause is the wrong goal, then the solution is the right goal. The goal of Corporation 2.0 would be providing the goods and services needed to optimize quality of life for people in a socially, environmentally, and economically sustainable way. There is no need for pursuit of profits in that goal. In fact, the newly engineered Corporation 2.0 should have no incentive to maximize profits, since that causes the corporate dominance loop to appear. Therefore Corporation 2.0 should be non-profit. This is a radical change. But once you understand the analysis it's fully justified.
Retained earnings would be allowed. These internal profits are necessary to build the assets necessary to carry out the corporate life form's new goal, which can be summarized as "optimize quality of life for people." Dividends to owners or stockholders would no longer be allowed. Gone is the perverse incentive to maximize short term dividends at the expense of all sorts of terrible side effects.
The monumental benefit of Corporation 2.0 being non-profit is the corrosive impact of short term profit maximization disappears as a fundamental driver of the human system. The new way of corporate thinking will run about like this: “I’m no longer going to argue my company must resist anything that hurts my profits, because that’s no longer my bottom line. Instead, my new bottom line is to serve the needs of people. If my government or my fellow citizens propose a way to do that better, and I can’t think of an even better way, then I’m all for it.”
With one simple change to the law, everything changes. All a state or nation needs to do is pass legislation about like this: 1
Corporate law is hereby amended to redefine allowable types of non-federal corporations. The type widely known as for-profit is no longer permitted. This leaves the other type, non-profit, as the only allowable type. This act shall take effect on the last day of this year.
The five defining characteristics of the modern for-profit corporation have until now been: (1) separate legal personality, (2) delegated management, (3) limited liability, (4) transferable shares, and (5) investor ownership. Hereafter the last three characteristics are prohibited except in the case of non-profit worker cooperatives. For-profit corporate stock may no longer be bought or sold. Nor may dividends be paid on it.
The intent of this law is to align the goal of the modern corporation with that of Homo sapiens, whose goal is to optimize the common good for all living people and their descendents.
To implement this intent, all for-profit corporate charters shall be revised to be non-profit and shall include this statement:
This corporation is an artificial life form created by humans to serve their needs and is thus not a natural person. Nor is it an artificial person. It is an artificial servant. The overriding goal of this servant shall be to serve the needs of its human master to the best of its abilities, by providing goods and/or services that benefit the common good first and its customers second. No other goal shall have a greater or equal priority.
To allow a smooth ten year transition that does not disrupt the welfare of the people, a percentage of corporations, chosen at random, shall be converted each year. This shall start at .125% in the first year and increase to .25%, .5%, 1%, 2%, 4%, 8%, 16%, 32%, and finally 36.25% in the tenth year. For-profit corporations are encouraged to convert earlier than the year they are selected, since this will enhance their reputation as a trustworthy servant and thus increase their likelihood of survival.
At the end of each year, for that year’s converting corporations all their stock shall change to the equivalent of loans by shareholders to corporations. Loan value per share shall be calculated as the tangible book value of a corporation divided by the total number of shares. The full principle of these loans shall be paid off to loan owners over a period of thirty years. During that time interest on the remaining principle shall be paid quarterly at a rate of, for each stock, the average dividend rate for the last five years for common shares and the stipulated dividend rate for preferred shares divided by average share value.
This is of course only a rough illustrative example in plain English.
The hodgepodge of different incorporation laws in the states of some countries should be replaced by uniform national laws. This eliminates the tendency for a race to the bottom among states to break out, as states compete for more revenue via weaker incorporation laws. For the same reason, uniform international law should eventually be implemented.
A powerful hypnotic fallacy promoted by the corporate life form is that profits are necessary to motivate invention and entrepreneurs. What they really mean is profits in their present form of dividends to outside owners. There are other approaches, namely a non-profit approach.
Non-profit corporations can do anything for-profit corporations can do. This has been proven by many non-profits. An outstanding example is the Mondragon Corporation of Spain, a highly successful worker cooperative of 100,000 members: 2
The Corporation’s companies manufacture consumer goods, capital goods, industrial components, products and systems for construction, and services to business. [including] refrigerators, washing machines, ovens, dishwashers, and boilers... chip removing and sheet metal forming machine tools... automation and control products for machine tools, packaging machinery, machinery for automating assembly processes and processing wood, forklift trucks, electric transformers, integrated equipment for the catering industry, cold stores, and refrigeration equipment.... [for the auto industry] brakes, axles, suspension, transmission, engines, aluminium wheel rims, fluid conduction, and other internal and external vehicle components. ... business consultancy services, architecture and engineering, property consulting, design and innovation, systems engineering for electromechanical installations, and integrated logistics engineering.
The Mondragon Corporation, thousands of credit unions and agricultural coops, hundreds of thousands of NGOs, and more are an example of what a solution to the corporate dominance problem would look like. Each is living proof this solution can work... because it already has worked. All we need to do is scale up this already proven solution.
Mahatma Gandhi had a dream. Martin Luther King had a dream. So did Nelson Mandela, the Polish Solidarity Trade Union, and Harriet Beecher Stowe. All these visionaries dreamed it was possible to throw off an oppressor. All of them ultimately won.
It can be done again by solving the complete sustainability problem.
The sustainability problem includes the social, environmental, and economic sustainability problems. It thus includes the corporate dominance problem, because that problem is the foremost underlying cause of all these forms of unsustainability.
Solve the root cause of the corporate dominance problem and the most powerful life form on the planet will now be working for the human system instead of against it.
The poster asks "What is our one demand?" The AdBusters Blog post on July 26, 2011 was titled "Is America Ripe for a Tahir Moment?" It stated that:
How can this demand be achieved? Given these principles:
The goal of a system's dominant social agent determines the general behavior of the system.
All problems arise from their root causes.
and these analysis conclusions:
The dominant agent in the human system is Corporatis profitis, not Homo sapiens.
The main root cause of monied corruption is that Corporatis profitis has the wrong goal of short term maximization of profits.
Then the solution is:
(1) The material on Corporate 2.0 is from Common Property Rights: A Process Driven Approach to Solving the Complete Sustainability Problem.
(2) The Mondragon Corporation material is from the Wikipedia entry on the topic.
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