The purpose of a standard corporation is to make money, not to consider humanity, ecology or even fairness. Corporations that dare place any value above profit may even be subject to legal recourse. Many people have pointed out that in their rabid observance of this priority, standard corporations and their managers often meet the criteria for “antisocial personality disorder” in the Diagnostic and Statistical Manual of Mental Disorders. They're sociopaths.
It is becoming increasingly obvious to people that profit maximization has very little to do with meeting actual human or ecological needs. According to the Economic Policy Institute and other researchers, corporate profits and worker productivity rise independently of workers' real wages. And increases in corporate profit are more likely to enrich shareholders than to be reinvested in new jobs with good wages. We need better ways of doing business.
Fortunately, there are thousands of profitable businesses that are structurally aligned to take into account the actual needs of workers, and as such, the broader community. In these businesses, workers are the democratic owners of the business. They don't offshore their own jobs, they don't siphon dividends away from their own productivity and they are still provided incentives to maintain a profitable business. For that reason, I agree with The Sun's recent commentary supporting the Maryland Employee Ownership Act (“Employee ownership gives power to the people, not corporations,” Jan. 2). It's a step in the right direction.
The separation of work and ownership creates an inherent misalignment of priorities within the same business. The shareholder's objective is to extract as much wealth as possible from worker productivity, for the lowest wage possible. But the worker's objective is to spend as little time and energy on work as she can in order to meet her income (and possibly self-actualization) needs. This misalignment even facilitates exploitative labor relationships. It was the economic arrangement behind the United States' original sin of slavery. It rewards the exploitation of prison labor and wage theft of undocumented and documented workers. Owners of traditional corporations and elected officials will still make the mind-bending claim that lower wages are somehow better for a business and for society at large, but remember, please don't feed the sociopaths.
Economist Jessica Nembhard is an expert on African-American cooperatives. She published a white paper pointing out that the success rate for traditional business startups after five years is an abysmal 3 to 5 percent. But the five-year success rate for cooperative businesses is a game-changing 90 percent.The culture and systems that value ownership of other people's labor and perpetual growth of profit are unsustainable. As evidence, I point to massive income inequality and earth's current mass extinction of species. Even 50 years ago, Rev. Martin King Jr. could see that capitalism had outlived its usefulness. The potential benefits of investing in a more cooperative economy are too great to ignore. Legislators should pass the Maryland Employee Ownership Act. It would be psycho not to.