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November 25, 2015



I was recently invited by an Indiana University (IU) professor to submit views on the topic of What Would Happen if Government were run like a Business. Others submitted views that brought Milton Friedman and his Chicago School of Economics views into focus to the effect that (in a bow to Social Darwinism) making money is the only responsibility of corporations. I took a slightly different tack with my commentary and offer it here in blog form, as follows.

George Lakoff, a cognitive brain scientist who holds forth at the University of California, Berkeley, and who happens to have earned his PHD at IU), has laid out the dimensions of the brains of Democrats and Republicans and how we got that way. Lakoff is an expert on framing and writes extensively on how we can lose an argument with Republicans when we allow them to seize the agenda by framing the issue, with differences ranging from a moderator’s question to a candidate on “Why do you love your wife and children so much?” to “When have you quit beating your wife?” The “framing” ends the discussion, but Lakoff tells us how to brush off Republican (read Fox News framing) and turn the tables on such framers. I recommend reading his books on this topic, some of which are in paperback.

He sees Democrats as nurturing in personality and Republicans as brain-wired for autocracy, literally equating sections of the brain and research to bolster his theories of how members of the two parties are different in their political outlooks. Interesting.

We have more to worry about than Friedman, the Chicago School and others who say that the whole purpose of corporate existence is to “enhance shareholder value.” Now courts have adopted such a view, which therefore presumably means that corporate deportment does not include concerns for the corporate workforce, the environment, or anything else – or if so – subordinate to the primary rationale for their existence. When Henry Ford decided to pay his workers the unheard of wages of five dollars a day long ago in putting Model Ts together, some of his stockholders sued him for not putting shareholder value above wages paid. We have come to such a point now that not putting shareholder value first is considered to be a breach of fiduciary duty.

When myopic greed masquerades as fiduciary duty enforceable in court, it is clear to me as a lawyer that those of us who are expecting any corporation to be Mr. Nice Guy can forget it now that they have judicial cover (which translates into a form of a moral blanket). What to do? Elect people to state and federal legislatures who change the rules of corporate governance, and be prepared for the corporate propaganda machine that such legislators are “anti-business” and will drive businesses out of the state etc. Stricter requirements are not anti-business; they are rather pro-people, and are necessary since corporations’ raison d’etre is to “enhance shareholder value.”
I thus note in passing that Volkswagen “enhanced shareholder value” when it knowingly used software which poisoned the air beyond allowable limits; that pharmaceutical companies “enhance shareholder value” when they acquire and/or merge with competitors and can thereafter enjoy lesser competition and monopoly pricing, or go for overseas inversion to beat the tax rap etc., but how are we the consuming public affected? Adversely at best, so let’s vote in senators and representatives both at state and federal levels who author legislation to straighten out corporate deportment and judicial interpretation as well.

It can be done. Corporations and governors and courts don’t pass laws; legislatures do, so let’s elect people to both state and federal legislatures who will expand corporate responsibilities beyond mere money-making and then regulate their predatory practices and other such excesses in the interests of both shareholders and consumers, and let’s do it as soon as possible.


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