Corporations: the power of possibility and the possibilities of power4 September 2023
There is a way of thinking about business corporations which sees them as inherently enemies of social progress. On this view, inspired by Marxist analyses of class conflict and antagonistic capital-labour relations, the actions of businesses are inevitably oppressive. In this blogpost I want to argue for a more nuanced view – that corporations are a powerful tool of human agency which hold the potential for a much more diverse range of uses than the Marx-inspired view allows. This is not to deny that certain corporate actions have obstructed human progress – for example the funding of climate change denialism by oil companies or underplaying the health impacts of cigarettes by tobacco companies. However, what I want to argue is that the range of possible corporate purposes and goals should not be underestimated by simply focusing on the structural conditions of market competition under capitalism.
Structure isn’t destiny – the role of agency
The Marxist-inspired view emphasises the structural determinants of business activities – the constraints imposed by their role in the capitalist mode of production (Marx 1886). Ironically, this point overlaps with mainstream orthodox economics which models businesses as necessarily constrained by market competition to compete solely for profit as a matter of survival (Friedman 1970). While all action is necessarily exercised under some structural constraints, this kind of high-level abstract theorising misses the very real practical scope for human agency. Because ultimately that is what businesses are – a particular tool for organising human activities. And like all tools their usage in practice depends on the humans wielding them.
Take, for example, that other dominant mode of human organisation – the modern state. While it exists under a variety of structural constraints – the need to extract revenue from citizens to survive, international anarchy, and so forth – it is unquestionable that the possible uses of its power are incredibly wide-ranging, from helping the meekest of its residents to carrying out horrific injustices. The state is a locus of power, and the greater its power the greater the range of possibilities it can carry out. It is indicative of this potential when one observes how much energy is expended by those who seek to harness and retain the state’s power – whether in democracies or elsewhere.
Business and social change
Similarly, there are battles on multiple fronts to shape businesses’ possibilities and powers which go far beyond their profit-making capabilities. One of the most obvious of these is climate change. For example, hedge fund Engine No.1 wanted to force Exxon Mobile Corporation to adopt more green policies. And so, despite owning only 0.02% of the company and in the face of opposition from Exxon itself, convinced other shareholders to support it in forcing its own green-focused nominees onto the company’s governing board (Levine 2021). This is just one example of the myriad of ways in which governments and civil society are seeking to pressure businesses into being more environmentally friendly.
Going beyond the environment businesses take positions and wield influence on issues which are not directly related to their bottom line (Hollinger 2023). For example, see Florida Governor Ron De Santis’s ongoing fight with Disney over the latter’s criticism of Florida’s restrictive LGBT+ school curricula legislation. Disney has threatened to move investment out of Florida and has in turn been threatened with punitive tax measures and restrictions on its self-governance (Perry 2023). Businesses also take positions on matters of wider constitutional importance. For example, business leaders lining up on both sides – although predominantly for Remain – of the UK’s Referendum to leave the European Union in 2016 (BBC 2016). More recently the Israel Business Forum – with executives from 150 of Israel’s largest companies – announced widespread strike action in protest against the government’s judicial reform/overhaul program (BNN Newsroom 2023).
Ideology, ideas, and influence
An orthodox Marxist understanding holds that ideas and ideology are mere superstructure whose primary role is to justify and consolidate the existing means and relations of production. What I suggest here inverts this emphasis back onto ideas. The ideologies held by those who hold the reins of corporate power matter, just as the policy outlook of politicians does. For example, a number of technology CEOs – with Elon Musk perhaps being the most obvious example – use their corporate power to instantiate their version of the good world. Elon Musk – despite headwinds of consumer and customer backlash harming revenue and profits – has doggedly pursued political and social goals through his ownership of “X”, the company formerly known as Twitter, with respect to speech regulation and socio-political culture wars.
Some might argue that these socio-political activities constitute mere advertising, cheap talk, or are fact in the long-term interests of the firm themselves. However this is overly simplistic in trying to reduce every explanation to a materialistic one. While the role of profit and incentives is ever-present, it would be foolhardy to deny the agency of the actors at the helm of companies and the role ideas and values play in their decisions, for good or for ill. For example, to date it is hard to see most of Elon Musk’s activities as value-generative for “X”. While corporations lack the check of regular democratic elections, they and the people who run them still act in light of their personal beliefs, which may be influenced by reasons, protests, and campaigns, just as politicians’ beliefs might.
The fight is on
There are important normative questions about the legitimate purposes corporate power may be put to – certainly some otherwise legal corporate activities can readily promote injustice (Berkey 2021). For now I simply want to conclude with a call to action and avoidance of despair at the hegemony of capitalism. Just as the state can alternatively achieve great strides to support human welfare and progress as well as backslide, so can that other great mode of human organisation – the corporation – be responsible for great progress as well as harm. In both instances the power to determine outcomes lies in the hands of human agents. While we do not make history under circumstances chosen by ourselves, we do make our history – and an over-emphasis on the telos or inevitably of corporate purpose misses this. Corporations, for good or ill, represent a nexus of power and possibility which lies within the scope of human agency to shape into the future. It behoves us to harness it for good.
BBC News. (2016). “EU referendum: More than 1,280 business leaders sign letter.” BBC News 22 June 2016. Available at https://www.bbc.co.uk/news/business-36592782.
Berkey, Brian. (2021). “Sweatshops, Structural Injustice, and the Wrong of Exploitation: Why Multinational Corporations Have Positive Duties to the Global Poor.” Journal of Business Ethics Vol.169, pp.43-56.
Friedman, Milton. (1970). “A Friedman doctrine– The Social Responsibility of Business Is to Increase Its Profits.” The New York Times 13 September 1970. Available at https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html.
Hollinger, Peggy. (2023). “Annual reports are fast becoming political treatises.” The Financial Times 26 July 2023. Available at https://www.ft.com/content/b69dbcff-50f7-4ded-87ef-869ff8ed66f5.
Levine, Matt. (2021). “Money Stuff: Exxon Lost a Climate Proxy Fight.” Bloomberg Newsletters Money Stuff 27 May 2021. Available at https://www.bloomberg.com/news/newsletters/2021-05-27/money-stuff-exxon-lost-a-climate-proxy-fight.
Marx, Karl. (1886) . Capital: a critique of political economy. Chicago: Kerr.
BNN Newsroom. (2023). “Israeli Opposition’s Boycott Threat Over Controversial Reasonableness Bill.” BNN 24 July 2023. Available at https://bnn.network/politics/israeli-oppositions-boycott-threat-over-controversial-reasonableness-bill/.
Perry, Sophie. (2023). “Ron DeSantis’ attacks on Disney have Republicans claiming he’s ‘not a conservative’.” Pink News 25 April 2023. Available at https://www.thepinknews.com/2023/04/25/ron-desantis-disney-feud-florida-lgbtq/