Bernie Sanders recently laid out a comprehensive plan for restricting corporate power in the United States. His new “Corporate Accountability and Democracy” plan unifies policies that are too often considered in isolation: moving corporations towards stakeholder governance and ownership; restricting market power by large corporations; and rebalancing corporate taxes.
The power of corporations to extract wealth is clear. In the United States, typical workers have seen their wages stagnate for forty years, while shareholder payments have led to growing wealth inequality. What many — even some on the left — have forgotten is that corporations are social institutions, and the rules that govern their interaction with society can be democratically determined. Corporations are businesses that are granted extraordinary privileges from the public, but with those privileges should come a clear set of responsibilities.
For decades, Americans have accepted that corporations should be run according to the ideology of ‘shareholder primacy’, which is based on the market fundamentalist notion that shareholders take the only real risks in the operation of the corporation. This means that rules that claim that shareholders – and often, share-sellers – should be the sole beneficiaries of rising profits can be remade, to recognize instead that multiple groups of stakeholders – employees, customers, suppliers, and the public – contribute to the success of a corporation alongside those who grant it capital, or purchase its shares on the open market.
