The Michigan governor would not endorse conservative Senator Barry Goldwater in 1964, because of his appeals to Democratic segregationists. And when Romney was in Richard Nixon’s cabinet, he drove the president to distraction with his highly public efforts to integrate housing in all-white suburbs.
.. As president of the American Motors Company, briefly among Detroit’s most innovative car makers, Romney believed corporations had multiple stakeholders, as described by Rick Perlstein. If they are people, corporations also constitute a community of individuals who depend on each other. “Each owes a debt to the other,” a biographer quoted Romney as saying. Hoover’s rugged individualism, Romney thought, was “nothing but a political banner to cover up greed.”
.. As Secretary of Housing and Urban Development under Nixon, he was implacable in the view that minorities deserve access to quality housing in affluent white suburbs, so much so he became a political liability. Nixon was not willing, as Romney was, to sacrifice the support of white voters in the name of egalitarianism. Until the president cut off all funding to desegregate suburbia, Romney’s HUD, according to sociologist Christopher Bonastia, “came surprisingly close to implementing unpopular anti-discrimination policies.”
.. With Richard Nixon’s victory in 1968, liberal Republicans were on a path toward extinction. Who was the last? Some say Nelson Rockefeller. Others say George Romney. Others still say Jack Kemp. But a pretty good case can be made for George Romney’s son Mitt, particularly during his first run for president in 2008, before the former Massachusetts governor rejected his record of using liberal methods to achieve Republican goals.
.. The divisive rhetoric never came naturally to Mitt Romney. The ideology of his youth wasn’t steeped in the coded language of the Southern Strategy, as it was for candidates like former House Speaker Newt Gingrich, who famously called Obama America’s greatest “food-stamp president.” The ideology of Romney’s youth was the opposite.
Is it meaningful to talk about the ownership of companies?
Shareholders own the corporation, and the duty of the directors to maximise shareholder value follows from that. I have lost count of the number of times I have been told “that is the law”.
But it is not the law. Certainly not in America, as Lynn Stout, a professor at Cornell University Law School, has pointed out.
And English shareholders are definitely not owners. The Court of Appeal declared in 1948 that “shareholders are not, in the eyes of the law, part owners of the company”. In 2003, the House of Lords reaffirmed that ruling, in unequivocal terms.
.. There is a stronger case for asserting that a company is “owned” by its directors than there is for its shareholders.
.. So who does own a company? The answer is that no one does, any more than anyone owns the river Thames, the National Gallery, the streets of London, or the air we breathe.
.. As Charles Handy has written, when we look at the modern corporation, “the myth of ownership gets in the way”. Clear thinking about business would be easier if we stopped using the word.
The golden age of the Western corporation may be coming to an end
The golden age of the Western corporation, they argue, was the product of two benign developments: the globalisation of markets and, as a result, the reduction of costs. The global labour force has expanded by some 1.2 billion since 1980, with the new workers largely coming from emerging economies. Corporate-tax rates across the OECD, a club of mostly rich countries, have fallen by as much as half in that period. And the price of most commodities is down in real terms.
Now a more difficult era is beginning. More than twice as many multinationals are operating today as in 1990, making for more competition. Margins are being squeezed and the volatility of profits is growing. The average variance in returns to capital for North American firms is more than 60% higher today than it was in 1965-1980. MGI predicts that corporate profits may fall from 10% of global GDP to about 8% in a decade’s time.
.. How can Western companies navigate these threats to their rule? MGI advises them to focus on the one realm where they continue to have a comparative advantage—the realm of ideas. Many companies in labour- and capital-intensive industries have been slaughtered by foreign competitors, whereas idea-intensive firms—not just companies in obvious markets such as the media, finance and pharmaceuticals, but in areas such as logistics and luxury cars—continue to flourish. The “idea sector”, as MGI defines it, accounts for 31% of profits generated by Western companies, compared with 17% in 1999.
The Sunny Side of Greed
Corporations aren’t paralyzed by partisan bickering. They’re not hostage to a few big donors, a few loud interest groups or some unyielding ideology.
“They’re ultimately more responsive to a broader group of voters — customers — than politicians are,” said Bradley Tusk, whose firm, Tusk Strategies, does consulting for both private corporations and public officials.
“If you’re a politician and all you care about is staying in office, you’re worried about a small group of voters in your district who vote in the primary,” he told me, referring to members of the House of Representatives. “If you’re a corporation, you need to be much more in sync with public opinion, because you’re appealing to people across the spectrum.”
And so, he added, “Ironically, a lot of corporations have to be far more democratic than democratically elected officials.”
.. And while it doesn’t erase the damage that corporations wreak on the environment or their exploitation of workers paid too little, it does force you to admit that corporations aren’t always the bad guys.