Street roots
Feb. 1, 2013
H IT M A N , fro m page 8
years ago. Bankers were convincing people
to buy houses that they couldn’t afford.
hen the bottom of the market fell out, and
now these people are stuck with houses
that are not even worth the $200,000. Yet
they still have their mortgages. They’re
caught: Once you get in that debt cycle you
become a servant. It’s very difficult to go
out and protest in the streets or do anything
else to change a system that you’ve become
so indebted to. You just want to get out
degree, has been caused by this philosophy,
the idea of maximizing profits.
A.B.: M any o f today’s economists have an
interesting term fo r social costs: They call
them “externalities. ” What could an economy
look like that doesn’t prioritize profits over
social costs?
J.P.: That’s another whole issue, the
issue of externalities. If we could internalize
the externalities, that would solve a lot of
the problem. Externalities are things that
are not factored into the cost of a product
Corporations have hijacked the svslem hv
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that every candidate for anv « X Z .
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any a ia p r post, whether in the in the Amazon, you destroy the
United States or any of »he other so-called democracies lungs of the earth - the trees,
the soil — and then [increased
around the w orld, is beholden Io them. We have
levels of] carbon dioxide causes
ronghly 10,000 lobbyists In Washington, D.C., alone,
climate change. You also
most of them hired Io protect corporate interests.
destroy people’s lives. You
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from under the debt.
A .B.: In what ways have corporations
hijacked the democratic process?
J.P.: (Laughs) Oh, my God...
A.B.: T hat’s a big question, but I think it ’s
an important one.
J.P.: Yeah. I laugh because this last
election was a beautiful example. The
person that most corporate CEO s wanted to
win didn’t win. But yet, Obama hired people
to run his economic policy that came right
out of Wall Street. He hired people to run
his agricultural policies that came out of the
big agribusiness. And the same with oil. It’s
a terribly corrupt system, and Obama’s
caught in it because he took so much
money from corporations. It’s not his fault:
He couldn’t have become president had he
not done that.
Corporations have hijacked the system by
making sure that every candidate for any
major post, whether in the United States or
any of the other so-called democracies
around the world, is beholden to them. We
have roughly 10,000 lobbyists in
Washington, D .C ., alone, most of them hired
to protect corporate interests. During most
of my lifetime, the elected officials in the
United States wrote the laws, but that’s not
true anymore. Today the major laws that
deal with corporations are written by
corporate lobbyists and pass through
politicians who the corporate lobbyists
essentially own. So corporations write the
laws that govern them. Big corporations
own the mainstream media, either through
outright ownership or through their
advertising budgets. They wield amazing
power, and they take huge subsidies. Oil
companies and fossil fuel companies are
perhaps the most highly socialized,
subsidized companies on the planet. They
get tremendous benefits in subsidies, direct
and indirect, from the U .S. government.
A .B.: You mentioned M ilton Friedm an.
H ow has his economic philosophy contributed
to the current state o f the global economy?
J.P .: When you have a philosophy that
says the only responsibility of business is to
maximize profits, the corollary is that
business should do everything in its power
to make sure it can maximize profits. This
means having a heavy influence on
government policies — nationally, locally and
internationally. Maximizing profits also
means maximizing income for a very small
sector of society: those who own the major
share of corporations. So the demise of the
middle class around the world and the
decline of the middle class in the United
States and other countries, to a very large
destroy the freshwater supplies
of rivers and potential
medicines that come from
plants. You destroy a great deal.
Those are all costs, but they’re not factored
into the costs of oil [production]. When you
use sweatshops in Bangladesh, and they
burn down, people die or are terribly
injured. Their families then have no way of
making a living. This is a huge cost that
wasn’t factored into the products that were
made in that factory: They were
externalized. They need to be internalized.
I think what we need is to create a new
goal for business. Businesses should make a
decent rate of return for investors, but only
within the context of being socially and
environmentally responsible. Only within
the context of creating a better world for
we, the people. Corporations should be
here to serve us, the people, not just the 1
percent.
Incidentally, one percent is a total error.
It’s actually much less than one percent:
400 individuals in this country have more
assets than 50 percent of the rest of the
country. That’s a lot less than one percent.
We need to create a new economic model
and a new goal for businesses, one that
says, “Yes, you need to make a decent rate
of return for your investors, but only while
serving the public interest.” That should be
the role of corporations.
next generation o f social entrepreneurs. What
are they doing to build a more peaceful, ju st
and sustainable world? What can ordinary
people do?
J.P.: First of all, I’ve seen major changes
in M BA programs. Seven years ago,
students would say that their goals in life
were to become wealthy and powerful.
Today, I often hear “I want to raise kids in a
good world. I’m getting my M BA so that I
can shape business into a better tool for
creating a world my children and
grandchildren will want to inherit.” I think
this is extremely positive. We’re also seeing
major businesses around the country
becoming more socially and environmentally
responsible. We’re seeing more localized
businesses.
Around the world, people are waking up.
I think we’re in a revolution of
consciousness. We’ve seen it in the Arab
Spring. We’ve seen it in the Occupy
movement. We’re seeing it today throughout
Europe with the protests in places like
Greece and Spain and Portugal and Iceland.
We’re seeing it in Latin America and Africa
and Asia, even Russia. Once we start waking
up and protesting, then the status quo, the
corporatocracy, will try to stop us. It’s
recognition that we are waking up and that
we’re becoming successful; they’re fearful of
our success. In the long run we need to
turn around so they don’t have to be fearful:
We’ll let them know that we’ll support
businesses. But only those businesses that
will create a better world for all of us.
J
A.B.: These days a lot o f corporations say
they’re socially responsible. What is the
difference between philanthropy and socially
responsible business practice?
J.P.: Philanthropy can be sort of a red
herring. If I’m making $80 billion (laughs) -
let’s say that’s my income - and I give $30
billion to philanthropy, I’ve done a great
service as a philanthropist. I do appreciate
people who do that. But if I, as that same
philanthropist, have hurt competition in the
process, have screwed people by following
this idea of maximizing profits, haven’t paid
fair wages to workers around the world or
haven’t helped competitors come along — if
in order to make that $80 billion, have also
practiced business methods that are
injurious to the general public, then I would
say it would be much better for (me) to have
made much less money and not given any of
it to philanthropy. If you do make a lot of
money, it’s great to give it back to
philanthropy. But, better still, as you’re
making that money, as you’re running that
business, focus on making a better world for
everyone. As long as we have a model that
says the only responsibility of business is to
maximize profits, we’re going to be in a
situation where business executives find it
extremely difficult to be socially and
environmentally responsible because
they’re being told by their stockholders and
their boards of directors that [they] just
need to focus on maximizing profits.
A.B.: You seem to have some hope fo r the
A.B.: Anything else?
J.P.: These are amazing times: We’re
perhaps living in one of the most
revolutionary times in history. I think what
we’re experiencing now is bigger than the
Agricultural Revolution or the Industrial
Revolution or the American Revolution. This
is a revolution of consciousness. I’m glad to
be part of it. I would encourage all your
readers to do something every day to
participate in this revolution and to follow
their own heart. Everybody has some
passion and some talent: Use them, every
day, to make a better world.
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