Behind the Mask

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Why not reform corporate law to make corporations more democratic? We could make shareholders liable for 'external' costs like pollution, for example, or expand the notion of shareholder value.

Those are all interesting ideas, but they are unrealistic, at least in the short and medium term, and would require more broad-ranging political and economic change. Making shareholders liable for the misdeeds of their companies would chase a lot of middle-class people out of the market and could precipitate an economic collapse. Embedding other forms of value besides profit into the corporate form would also be a radical change. They're good ideas, but perhaps a bit idealistic in the current context.

The pragmatist in me says that we've spent the last 50 years building up a regulation system that is driven by the ideal of corporate responsibility -- the notion that society and the environment are best protected by democratically created legal regulations of corporate behavior. President Franklin Delano Roose_velt began in earnest, with his New Deal, to build a workable system of laws and regulations based on the principle that we need to control wealth creation so it doesn't control us. Wealth creation isn't an end in itself; it needs to be justified on the principle of serving the public good, and that is what, at least ideally, a regulatory system should do.

It seems just as radical to call for more government regulation. 'The market' has become a kind of quasi deity.

That view is a kind of fundamentalism. The fact is that the market is a human institution, and it requires a massive intrusionof state power. You simply cannot have a free market without contract, property, and corporate laws to create and protectcorporations; a judiciary to interpret those laws; andpolice to enforce them.

The notion that the 'free-market approach' is a way of getting government off our backs is just plain wrong. When you deregulate, you're not reducing the state's involvement one iota. You're merely shifting whose interest government is acting for. Every time the state rolls back standards for environmental quality, worker safety, or consumer protection in the nameof deregulation, what's actually happening is that the state is creating more rights for corporations, and throwing more power behind the enforcement of those rights. In a deregulated economy, the state remains heavily involved in the economy, but now on the side of corporations rather thanon the side of citizens and the environment.

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