B-corporations – yes or no?

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Posted Jun 25 2017 by Dave Darby of Lowimpact.org

What do you consider the correct approach towards multinational corporations – tame them, or start to get rid of them? And what do we mean by ‘tame’ exactly? And what are the problems with multinational corporations in the first place?

Here are a few:

  1. They’re hierarchical and undemocratic
  2. They concentrate wealth at the top
  3. They suck wealth out of our communities to pay distant shareholders
  4. They’re part of a perpetual growth worldview
  5. Their money flows into the political system, via lobbyists, donations and jobs for politicians, preventing any real democracy (this situation is made much worse, of course, when a US president fills his cabinet with corporate bankers)
  6. They make all our High streets look the same
  7. They avoid taxes, so that the rest of us have to pay more
  8. They employ sweatshop labour
  9. They squeeze small farmers and suppliers
  10. They like to pay minimum wage on zero-hours contracts
  11. They bombard us with advertising
  12. They promote materialism
  13. They steal our online data

I recently came across the concept of B-corporations. Here’s a video of a multi-millionaire B-corporation CEO telling us why they’re such a good idea (apart from the obvious one, from his perspective):

To summarise, they’re trying to convince us that they don’t cause several of those problems above. They aim to pay well, to minimise environmental damage and exploitation etc. So I was open-minded when I looked into them, but had a mental checklist:

  • Do B-corps suck money out of communities to pay shareholders? (Yes they do)
  • Do they address (or even recognise) the problems inherent in the banking/money system? (No they don’t)
  • Do their proponents promote perpetual growth? (Yes they do)
  • Do they concentrate wealth and therefore power? (Yes they do)
  • Are their internal structures hierarchical and undemocratic? (Yes they are)
  • Are they co-operative / part of the solidarity economy? (Definitely not)

We already have democratic, non-exploitative businesses – they’re called co-operatives. The term ‘greenwash’ was springing to mind. As I watched his slick performance, I found myself becoming angrier and angrier. I kept asking him ‘why don’t you co-operativise? There’s a perfectly good ethical business model out there already. Why are you muddying the water by suggesting a less ethical model?’ But I knew the answer already. They don’t offer a route for him and people like him to become multi-millionaires.

Creating the impression that the corporate sector can be ‘tamed’ leads to complacency I think, and reduces the drive to build something different. It’s like painting the Titanic green. B-corps are a case in point. They’re the attempted legitimisation of the corporate sector. I’d prefer us to build alternatives to the corporate sector – without hierarchy, wealth concentration and extraction from communities or the perpetual-growth-ethic.

I think our supporting B-corps will make people more complacent and less likely to want to change the system, which is exactly what the corporate sector want. We don’t need the philanthropy of corporations. We can do things for ourselves, in Permaculture systems, in our communities – with abundance and work, not charity.

The B-corps / corporate social responsibility / taming corporations route is the opposite of low-impact, of Permaculture, and the opposite of Transition, which is about building resilience in communities. The corporate model (including B-corps) is to put branches in as many communities as possible, all over the world, to suck money out. OK, B-corps are ‘not exclusively about maximising returns to shareholders’ – but they still ARE about maximising returns to shareholders, or they wouldn’t be able to attract shareholders.

I’m not saying that people in B-corps aren’t good people – I’m sure they think they’re doing the right thing. But their structures are wrong. If they source food locally or provide renewable energy it buys us time, but B-corps will take market share from community-supported agriculture and community energy, where we should be focusing our energies, I think.

B-corps or any other kind of corps can’t possibly be part of a sustainable or democratic future. This guy explains why. ‘Green smoke and mirrors’ nails it for me.

If the argument is that if we try to ‘green’ corporations, it will make it easier for us to erode the corporate system, then I’d say that it will have the opposite effect. It will give them a stamp of approval, that allows more people on the cusp to tell their conscience that it’s OK to give their money to the corporate sector, which strengthens it against erosion. It will give them an even larger market share, when what we should be trying to do is to help the co-operative, local, non-corporate sector gain more of the market. We can’t do both.

A lot of people will give B-corps the benefit of the doubt – it can’t be bad that a corporation is putting solar panels on its roof, or recycling its waste etc., can it? But I think the overall effect will be negative, in that it will draw more people to the corporate sector and away from real alternatives in the co-operative, peer-to-peer, mutual, open source (et al) sectors.

I’m happy to debate if you think differently.

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Addendum, July 3, 2017

On reflection, I’d like to add two points to this article:

  1. Some ‘corporate social responsibility’ may involve sponsorship / funding of organisations and activities that could actually take market share away from the corporate sector, in which case, I thoroughly approve. Examples might be corporate funding of programmes to help people become self-employed, or to set up allotments etc.
  2. Some B-corps are co-operatives or employee-owned businesses, which obviously I’m in favour of. However, I maintain that corporations that are for-profit, hierarchical, undemocratic and extractive (of wealth from both people who do the real work and from communities) – i.e. the vast majority of them – help to suck resources and market share away from the co-operative, community-oriented sector.