How to Cure Corporate America’s Selfishness

“Corporations have always been ‘creatures of the State,’ as Teddy Roosevelt once called them. But they have become a kind of Frankenstein’s monster, unmoored from their creators to wreak havoc on the countryside. Corporations no longer consider the broad public interest in making decisions, nor do they worry that the state will ever revoke their license to operate. They only consider the desires of their shareholders, which has led to record corporate profits, stagnant wages, soaring inequality, and a shrinking middle class.

On Wednesday, Senator Elizabeth Warren proposed a counterweight to this relatively recent phenomenon in American business. Her bill, the Accountable Capitalism Act, revolves around a simple idea: The government would grant corporations the right to exist through a public charter, and could use that power to put obligations on corporations to benefit the broader public rather than a small handful of shareholders.

A federal corporate charter, required for all companies with over $1 billion in annual revenue, would be granted through a new Office of United States Corporations in the Commerce Department. The charter could be revoked if corporations didn’t follow its rules, including engaging in “repeated and egregious illegal conduct.” Shareholders could also sue companies for charter violations. “For the past 30 years we have put the American stamp of approval on giant corporations, even as they have ignored the interests of all but a tiny slice of Americans,” Warren wrote in a Wall Street Journal op-ed announcing the bill. ‘We should insist on a new deal.’ …..”

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