Can Corporate Leaders Be Good Citizens?

05/01/2016 11:12 pm ET Updated May 02, 2017

The owner of the Chobani yogurt company, Hamdi Ulukaya, made news last week when he announced that he will give his 2,000 employees a 10 percent ownership share when the company is sold. The average stake will be worth $150,000.

Several of America's largest corporations also made news by canceling events in North Carolina, to protest that state's discriminatory new laws against transgender people.

And a few retail corporations, like Costco and Trader Joes, have calculated that paying far above minimum wages is actually a good business decision as well as common decency. Even Walmart, which continues its disgraceful record when it comes to worker pay, is something of a leader in shifting to greener products.

Is there a larger trend here? Are some corporations becoming allies of progressive reform -- or does it just look that way because most of the corporate elite and the Republican Party are now so far to the right?

The interesting phenomenon here is the CEO who plays against type. Hamedi Ulukaya didn't have to decide to share his anticipated windfall with the employees who helped build Chobani. As an immigrant who came to America with almost nothing, he just decided that this was the right thing to do.

Most founders of companies, alas, just take it all for themselves when a start-up goes public. And most corporate executives exercise a conservatizing influence on politics and ideology.

But the exceptions are instructive.

Consider my friend James Stone, a former regulatory official who became a wealthy man by founding a successful company, the Plymouth Rock group of insurance companies. Stone is in the sector that produces relentless advice from CEOs to cut taxes and spending, reduce regulation, privatize government.

If you read the pronouncements of the Peter G. Peterson Foundation on the fiscal catastrophe headed our way, most of the signatories have backgrounds exactly like Stone's. But Stone takes a very different view.

In his newly published book, Five Easy Theses, Stone calls for restoring fiscal balance. But by fiscal balance he means something very different than what the austerity crowd demands. For instance, he proposes increasing tax revenues by getting rid of the tax deduction for interest paid.

That would increase government revenues and also reduce tax subsidies to the wealthy -- as well as killing a lot of corporate takeovers that enrich insiders but make no sense but for the interest deduction.

He also calls for shoring up Social Security by adjusting the program to demographic realities rather than privatizing it. Stone's arguments reveal that there is more than one path fiscal balance.

Stone also calls for a far more equal society. "An overly concentrated democracy will not only hurt democracy," he writes. It will also undermine prosperity." He calls not only for more progressive taxation for more and better investment in education as well as infrastructure. And he advocates movement towards a single payer health system, just on equity grounds but on efficiency grounds.

Perhaps Stone's most interesting and illuminating chapter is on financial reform. He's been there, both as a financial company CEO and before that as the second chair of the Commodity Futures Trading Commission, and before that as Massachusetts Insurance Commissioner.

His view of the financial system is well informed and straightforward. Immense banks, hedge funds, trading in derivatives -- "None of these are valuable for the country's growth, it's wealth distribution, or its commercial economy -- and none of them are in any way necessary." And he provides persuasive detail to make his case.

Wow! It's one thing for lefties to argue that the financial sector is a bloated mess, another for a prominent business leader who has had a ringside seat.

Why do we not have more corporate leaders like James Stone? A few years ago, Ralph Nader wrote a fantasy novel titled, Only the Super-Rich Can Save Us.

What if the richest and most powerful people in American, Nader wondered, got serious about applying their insight and influence to solving national problems? What if they developed, of all things, compassion?

Alas, the peer culture of today's financial elite causes most of America's business moguls to buy Milton Friedman's dictum that the only duty of a corporation is to make as much money as possible for its shareholders (and CEO's.) And to the extent that many financial leaders, such as Pete Peterson, profess concern for the broader common good, that common good usually gets defined in ways that benefit the same financial elite and the broader public only incidentally if at all.

Stone's purpose in writing Five Easy Theses was to present policy solutions to seemingly intractable problems and see whether a new consensus might be formed.
His book has some nice blurbs from Paul Volcker on the right and writer Steven Kinzer on the left, among others.

Most such efforts tend to be pretty rightwing. Not this one. But attaining a new consensus will be much harder than describing it.

At one point, Stone and I were going to write this book together. After several fascinating discussions, we decided that we disagreed on a handful of details and that it would be best if he wrote his own book.

I'm glad he wrote this one, which deserves a wide audience. It's all the more persuasive for the fact that it's written by a financial executive.

What an irony that Donald Trump, who represents the worst in America and the worst in the corporate culture, is running for president as a successful businessman.

Some of America's corporate elite are distancing themselves from Trump by invoking the values and policies of the traditional Republican Party -- shabby values that look enlightened only by comparison to Trump.

James Stone, and entrepreneurs like Hamdi Ulukaya of Chobani, demonstrate that business leaders can sometimes be national leaders. But we need a lot more of them.

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Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University's Heller School. His latest book is Debtors' Prison: The Politics of Austerity Versus Possibility.

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