Imágenes de páginas
PDF
EPUB

You are complaining about the fact there is no such thing as certainty. Let me just come to another thing.

What about Mr. Petrie's suggestion, for example, about paying for the right to campaign for a stockholder? That is not a burden. It is a question of right. For example-I am going to give this rhetoricallyis it right for the corporation to use its funds against another part of the corporation-its stockholders?

Let me just say to you on the occupational safety thing I have to go vote, I have no choice-this is something on which there is no alternative. I will let you answer the question for the record.

Mr. RIEHM. That vote is certainly, right?

Senator HARTKE. Well, maybe. If I don't vote, I don't think the world will come to an end.

The other thing is you do have a case where execution of laws may be wrong, difficult, and sometimes inefficient. I don't deny that. That is a question of executive failure.

Let me come back to this other matter, to deal with problems and not creating that type of conflict. We will adjourn the hearings and I will go vote.

Mr. RIEHM. I have appreciated the opportunity to have appeared. [Whereupon, at 1:05 p.m. the committee recessed, to reconvene at 10 a.m., Thursday, June 17, 1976.]

CORPORATE RIGHTS AND RESPONSIBILITIES

THURSDAY, JUNE 17, 1976

U.S. SENATE,

COMMITTEE ON COMMERCE,

Washington, D.C.

The subcommittee met, pursuant to notice, at 10:15 a.m., in room 5110, Dirksen Senate Office Building, Hon. Vance Hartke presiding.

OPENING STATEMENT BY SENATOR HARTKE

Senator HARTKE. The hearing will come to order. These are hearings on corporate rights and responsibilities. This is the third day of hearings to investigate one of the most important issues of this decade. What legal controls should be placed upon the establishment of and the exercise of power by the giant corporations which have come to dominate our economy.

The question of what, if anything, should be done about this power has been brought to the forefront of public concern by the disclosure of a long list of abuses, yet even if these abuses had never come to light or never been committed-the very existence of such massively concentrated power would be an issue that should seriously concern us as a democracy and as a society whose oldest and deepest traditions include a healthy distrust of concentrated power in any form, public or private.

Certainly, no one can deny the power of our largest corporations. The simple fact is that a vast number of economic decisions affecting the quality of American life are made or controlled by a small number of men at the center of a few hundred corporate empires. And this concentrated economic power is steadily increasing.

In 1955, the top 500 manufacturing corporations controlled 58 percent of the U.S. total manufacturing sales. In 1975, they controlled 81.1 percent.

Over 78 percent of all the people who work in manufacturing industries work for one of the 500 largest manufacturing corporations. The top 500 firms earn 53 percent of all U.S. business profits after taxes and have 82 percent of all corporate assets.

As a result, to a large extent those who control these corporations control decisionmaking as to who will have jobs, where those jobs will be, how long they will last, whether new facilities will be built in a community or existing ones will be shut down (and perhaps moved abroad), working conditions, the kind and quality of the goods available for purchases at what price, the type and quality of energy supplies that will be made available and at what price.

They decide whether products and production techniques will be chosen that pollute the air and water and cause occupational and consumer health problems, or whether alternatives will be sought, and, if alternatives are sought, how vigorously they will be sought and what resources will be dedicated to the search.

While the giant modern corporation has tremendous influence over the quality of American life, Americans are not reciprocally represented in the corporate decisionmaking process. Internally, it is a bureaucratic hierarchy. Externally, what remains of stock control is focused upon the stockholder's immediate economic interests. The direct control through stockholder votes, generally controlled by institutional investors, holding companies, conglomerates, the exercise of pension fund proxies by major banks, et cetera, is exercised by a tiny fraction of the population. Stockholder votes through the purchase and sale of stock in the stock market, may act as an effective influence upon economic performance, but this influence is diffuse and generalized.

Similarly, consumer influence through the market, while not as limited as stockholder control, is also inadequate. The increased sophistication and extent of modern advertising, restrictions upon the range of alternatives from which consumers must choose together with the increasing concentration of corporate control, tend to tip the balance in the marketplace more and more against the consumer.

As a result, large modern corporate managements are becoming in many respects, private governments, exercising enormous control over our lives and subject to very little democratic constraint. This would be a matter of grave concern even if all the decisions made by the corporations were right and good.

But many are not. And in a few cases, not merely poor judgment, but rank cupidity, corruption and callous disregard for human lives have been implicit in the corporate decision making process.

On the other hand, it would be ridiculous to assume that all or even most decisions made by the dominant corporations are against the public interest. On the contrary, no serious, objective observer can fail to be impressed with the vitality, the productivity, and the innovation of modern corporations or with the immense positive contributions which they have made to modern life.

And because we are aware and grateful for the enormous economic benefits conferred by corporate activity, we are also aware of the difficulty of better defining corporate rights and responsibilities in the second half of the 20th century.

Defining the role of the corporation is an extremely complicated task. If the record of corporate activities were merely a simple one of unrelieved abuse of social responsibilities, the many purveyors of simple anticorporate panaceas could be given more credence. On the other hand, if the record were overwhelmingly one of positive contributions to the Nation's welfare, peppered only by occasional accidental and minor misdemeanors, then the pollyannas who uncritically defend the status quo sound less like characters from Alice in Wonderland.

We think serious reforms of some sort are clearly called for, that the centralization of private power has simply gone too far and that abuses of that power have become too widespread and systematic to be ignored any longer.

But we do not have any immediate anwers to the problem of improving the economic productivity of the corporation or reducing corporate activities which threaten the quality of American life. That is why we are asking the question: "Should corporations continue to be governed and regulated as in the past, or is there a better way to define the rights and responsibilities of the corporation?"

The basic problem of the abuse of concentrated economic power is, of course, not new. It has been addressed many times before and we are all aware of the primary approaches to promoting the public interest in the use of economic power, the various forms of nationalization, public regulation, and deconcentration of antitrust.

In many other countries, nationalization has often been the course chosen. The experiences of these countries have demonstrated that nationalization is not a panacea for the basic problem of concentrated economic power. It has often been observed that the behavior of the large oligopolistic or monopolistic corporations in both the private and public sphere is frequently quite similar.

Another common approach is public regulation, both direct economic regulation, such as that exercised by the ICC and FPC, and the more direct prohibitions against specific antisocial activities, such as the air and water pollution control laws.

Regulation has made great contributions, and, carefully reformed and adapted to changing conditions, can continue to play an important role. But no one would claim that regulation in its various forms provides a simple answer to the whole problem. The inherent difficulties of regulation are too well known-the tendency of regulatory agencies to be dominated by the industries they are supposed to regulate, the rigidity and inability to respond to changes which regulation imposes upon a market, the endless redtape stifling efficiency, and, as in the case of the environmental protection laws, the inadequacy of enforcement activities in areas where violations are in the economic interest of the corporation.

Concentration of economic power in corporate hands is constantly increasing. I cannot advocate that direct Government intervention in the day-to-day economic decisionmaking of the corporation should also increase at the same rate.

Finally, the traditional American answer to concentrated economic power has been trust busting. Our experiment with deconcentration efforts is the oldest and by far the toughest, most extensive effort of its type in the world. And its reform and expansion must play an important part in our attempt to deal with economic concentration.

Yet antitrust is clearly insufficient by itself. Concentration of economic power has preceded steadily and without interruption throughout the entire history of antitrust.

The present degree of concentration in the United States is not significantly less than it is in other major industrial countries without our history of antitrust society. Some attribute this situation to weak enforcement and interpretation of the antitrust laws.

I do not agree. The forces of work in favor of economic concentration in many cases appear to be forces which cannot simply be stopped by "breaking up" a large corporation. For the foreseeable future, it appears that large organizations are here to stay.

« AnteriorContinuar »