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By Laura Adelmann
Featuring a former Obama appointee in the State Department, progressive thinkers and activists gathered in Minneapolis at a day-long session of the annual Nobel Peace Prize Forum to discuss nothing less than a revolution of the free-enterprise system by controlling companies to ensure that “social welfare” is put above profit.
Keynote speaker Michael Posner, former assistant secretary of state for democracy, human rights, and labor in Hillary Clinton’s State Department, promoted a strategy that would effectively deploy an army of liberals into private American companies to gain oversight.
Capitalist-derived profit – historically proven to strengthen the economy, benefit workers and improve society – was portrayed at the forum as a necessary evil that should be controlled and contained by redistributing corporate money to liberal causes, in part through increasingly stringent environmental polices and regulations.
Posner, now professor of business and society at New York University’s Stern School of Business, proposed that nonprofit representatives help define standards on social and environmental issues companies should promote. Then, he said, the representatives should regulate, rate, publicize and oversee the companies’ performance based on those standards.
Private companies should be targeted as tools to implement change, because they are wealthier and more powerful than some governments, according to Posner.
Calling Wal-Mart the world’s 30th biggest economy, he expressed frustration at his inability to interfere with corporate decision-making when he worked for the Obama administration.
“I kept asking why we didn’t have an ambassador to Wal-Mart when I was at the State Department,” Posner said.
Posner’s presentation came on day two of the Nobel Peace Prize Forum, March 7, hosted by Augsburg College, a historic Lutheran institution in Minneapolis. The presence of the Dalai Lama grabbed headlines on the first day of the forum, March 1, which was focused on the interaction of peace and faith. Day three featured science and health, and day four was called “Global Day.”
Launched in 1989, the forum says its aim is “to inspire peacemaking by celebrating the work of Nobel Peace Prize winners.”
Posner insisted he is “pro-company,” but he asked how “we find a way” for companies to make a “reasonable” profit and still adhere to the United Nations’ Universal Declaration of Human Rights.
Global authority was assumed by speakers at the event while the American Constitution and its Bill of Rights that limits governmental power, protects individual liberty and specifies that all rights come from God was never mentioned.
Posner described the “higher purpose” of business as social activism, an intentional diversion from earning and protecting profit.
Those ‘pesky’ investors
Andrew Kassoy, co-founder of the non-profit organization B Lab, affirmed Posner’s view as “the evolution of capitalism.”
B Lab lobbies for legislation that allows companies to change their legal status from a C or S Corp to a Benefit Corporation and focus on social issues.
Once organized as a B Corp, the company can declare its focus has expanded from profit to social issues, effectively abandoning its fiduciary duty to its shareholders, who were referred to as “pesky” at the forum.
The legislation keeps investors from taking legal action against a B Corp, requiring the businesses to meet defined corporate responsibility standards that are legally enforceable.
According to Kassoy, benefit corporation legislation has marched through 20 states, including Delaware.
Delaware is a significant bellwether, as more than half of all public corporations are incorporated in the state because of its pro-business tax policies.
Kassoy defined the change in corporate law, which has had bipartisan support, as “an incredible example of the power of the global B Corp movement.”
‘Star of the revolution’
Yvon Chouinard, outspoken environmentalist and founder of outdoor-clothing brand Patagonia, called the B Corp movement “the start of the revolution,” that would replace an economic system he said isn’t working.
Don Shaffer, CEO of RSF Social Finance, agreed, calling this the decade that will “literally shift and evolve how we look at capitalism.”
Shaffer, however, admitted in a November 2013 blog he penned that replacing capitalism with a system that uses private profits to fund social change is unproven, risky and likely a money-losing proposition.
“Conventional startups attract investment by focusing on markets with huge, fast expansion potential and creating barriers to entry for competitors – they have hockey-stick growth prospects,” Shaffer wrote. “The contrast with social enterprises can be stark. They often have high upfront costs and relatively low profit margins. They may have unproven hybrid business models. And, by definition, they aim to maximize social value rather than profit.”
Corporate leaders who heed those risks and decide to resist the corporate social movement could be coerced into compliance, as described by Posner at the forum.
Posner specified that standards for industries should be established by groups that include business representatives and “stakeholders that have interest in the fight” regarding issues that could include the treatment of animals, people or the environment.
Stakeholders would determine how closely companies align with the standards.
He lauded companies such as Nestle, Nike and Apple that already allow monitoring of their factories.
Posner suggested the power of the environmental and social standards could be used to increase corporate compliance by developing an “informed consumer movement” so companies that concentrate on social causes would be rewarded with business.
He did not detail the kind of publicity companies that resist the oversight and financial redirection from progressive groups could expect. However, ways to coerce their compliance were explored during the forum.
‘Aligning business with the planet’
Judith Samuelson, director of the Aspen Institute, led a breakout session titled “Aligning Business with the Planet: How Will the Change Take Place?”
She said one of the strategies her organization is promoting is for “change agents” to gain employment across broad sections of industry to reshape corporate culture away from pure profit-motive and toward funding social and environmental causes.
Samuelson added that some business schools are steeping the next generation in the “social good” mindset.
Calling for “social action,” Samuelson advocated for more “boots on the ground” to push forward change and called for people who will make “courageous moves” across American industries.
Posner is a leader in that movement. Stern is breaking new ground with the creation of the Center for Business and Human Rights, the first human rights center at a business school.
Students are told the Universal Declaration of Human Rights should be at the core of a corporation’s mission, according to the stern.nyu.edu website.
It also states the center will develop rules for businesses by developing common standards and a means of implementing the standards in specific industries that include manufacturing, oil, mining, agriculture, investing, information and communication technology.
At the forum, Posner expressed concern that businesses have superficially used green initiatives as a mere marketing tool.
Embedding the standards into corporations was presented as the key catalyst for economic and social change. Samuelson said the change would have a significant ripple effect for Americans, with skyrocketing prices on everything from clothing and food to gas and lending rates.
She also advocated for Americans to lower expectations for their standard of living, because investments, pensions and retirement nest eggs would likewise decline as businesses across America turns away from profit as their most important motive.
Once installed, standards and regulations would likely increase, as would control over corporations actions and decisions by close monitoring, comparisons and public reporting of companies’ progress toward the standards.
This mission gives environmentalists and others representing progressive causes broad and unprecedented influence over whole industries’ regulation, income, spending, strategies, operation, reputation and future.
True solution to social problems
Socialist Sweden was upheld as a model for the U.S. to follow. The Swedish government owns more than 50 companies, and it imposes strict environmental legislation upon businesses.
State-owned Swedish businesses are mandated to produce sustainability reports that comply with guidelines from the Global Reporting Initiative.
This year, those companies must produce additional reports that identify sustainability targets and measure progress, focusing on multiple liberal goals, including diversity and the environment.
That kind of green-minded liberal influence is apparently already entrenched at tech giant Apple.
Former Apple CEO Tim Cook recently appointed former EPA director Lisa Jackson as the company’s vice president for environmental initiatives. Former Vice President Al Gore, now chairman of the Climate Reality Project, is on Apple’s board of directors.
Cook recently made headlines for his unexpected response to questioning from a shareholder, Justin Danhof, director of the conservative National Center for Public Policy Research.
Danhof asked the company to stop spending on money-losing green initiatives and concentrate on the company’s return on investment.
Cook said Apple does a lot of things for reasons besides profit and would continue to invest in green technology whether or not it improves the bottom line.
News accounts said he angrily told Danhof, “If you want me to do things only for ROI (return on investment) reasons, you should get out of this stock.”
Cook’s stance against free-market capitalism would have late Apple co-founder Steve Jobs “rolling in his grave,” said libertarian talk show host Jason Lewis, an outspoken advocate for free enterprise.
He said free enterprise is the answer to social concerns, not the enemy of them, because corporations that focus squarely on profits provide jobs that lead to higher living standards, benefitting society and individuals.
“Whether it’s the environment, slave labor or children in factories, all those things are the result of a poor economy,” Lewis said. “The single greatest force for social good and change and prosperity is a profitable business.”