On October 14th, 2009, Dr. P Roy Vagleos, a former Chairman and CEO of Merck Pharmaceuticals, spoke at a debate at the Yale Political Union in favor of the resolution "Resolved: Corporations Should be Responsible to More than their Shareholders." Full minutes of debate can be found at here. Below is a student speech on the topic:
David Brookman, a junior and Chair or the Liberal Party, gave a speech in the affirmative.
It's always a challenge to speak after Mr. McGuire. He's quite talented at proving his point forcefully - but today he proves too much.
I look at the world and see problems that people cause. Environmental devastation both local and global, sweatshops, corruption. And then, I listen to Mr. McGuire, and ask, so, given these problems, how should we react? He's told us told us that it's not the place of CEOs to do so. If a CEO were to order his company: "stop polluting the river!" at the expense of profit, the shareholders would fire him. True enough. And he's told us that it's not the place of the consumer, that "socially responsible" goods are usually a sham. And, yeah, most are. And hell, even if the shareholders of one company acted responsibly, some other group of shareholders at another company would just put them out of business for doing so.
So, who actually has the power to exercise moral agency? Not corporate leaders, not consumers, not even shareholders. In Mr. McGuire's framework, there is nothing we can do in the face of corporate action.
This is a grim portrait of the world ladies and gentlemen, but it's even scarier because Mr. McGuire is entirely correct. That is the world we live in. Welcome to capitalism.
At no point in the system can you pinpoint blame; at no point is anyone truly responsible, because in our own little ways, we, each of us, are just as much at fault. You would have a tough time designing a more efficient way to destroy the planet.
But the feeling of despondence we share when confronted with this bleak reality, that we are somehow hopeless in its face, is also a product of capitalism.
It is only quite recently, in the last thirty or forty years, that we lost the belief that humanity can collectively intervene and steer our own social development. We can.
Now, one might respond, "yes, it would be nice to change the system, but what do we do in this instance?" As I've outlined, it's hard to accept piecemeal solutions when we are confronted with truly systemic problems, and as this hypothetical question demonstrates, "change the system" arguments feel irrelevant when we are considering a problem that is narrower in scope - "abolish capitalism" will not be among the options you have when we vote at the end of the evening.
But the diffusion of responsibility for the social ills that are perpetrated under the guise of the corporation represent not simply a byproduct of the system that needs to change but a key to its functioning - the denial of individual and collective responsibility represents its very foundation.
So, where to assign responsibility?
I do not think shareholders are the answer. The real world seems to indicate that even if shareholders were to engage in moral action, competition with other corporations precludes a moral result. The limited liability corporation, that is, the fact that shareholders are not responsible for damage corporations cause beyond the value of the shares that they hold, also represents a legal hurdle to this effort. And, though I have my objections to limited liability in principle, history indicates that we would live in a much more impoverished world without the forces of investment that it allows.
Where else, then, to find accountability? History has one answer for us. We have confronted systems like this before, where no one yet everyone was at fault simultaneously.
Adolf Eichmann, who presided over vast devastation, said, quote "I personally have nothing to do with this." How different is this than the excuse of the modern CEO? The totalitarian state, like the modern corporation, had few locuses of clear moral responsibility despite many of undeniable evil. After all, like the CEO, someone else would have done Eichmann's job just as well if he had quit; and think what would have happened to him if he had protested! But that didn't keep us from holding him accountable. And so I have a serious question that I would like the Right to answer tonight: Was Adolf Eichmann guilty? The moral logic of the negative implies that he was not.
Even if the system does harm, we cannot put the system itself in jail. In some sense, this is Mr. McGuire's central insight; and, as a consequence someone must be held accountable. We should treat employees whose decisions enslave children as enslavers and whose decisions help destroy the planet as destroyers. Just like Eichmann, the individuals who perpetrate such acts under the guise of the corporation should be punished.
Changing the system in ways that matter is thus not so removed from this debate. Altering the calculus of the corporate leader who currently has no choice but to cause devastation would be truly revolutionary. Just because the system as it stands completely precludes the clean assignment of objective responsibility does not mean we would not live in a better - and a truly different - world were we to do so.
Are corporate employees in some cosmic, objective sense responsible? No more than Eichmann was if he knew he would simply be replaced if he had quit. But ought they to be held responsible? Should corporations be responsible to more than their shareholders? Somehow, they must be. I urge you to vote in the affirmative.
Thank you, Mr. Speaker.
More information on the Yale Political Union and its debates can be found at www.yale.edu/ypu.