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Institutions & laws must be re-examined

Purpose of a genuine social enterprise must be to serve society, not to produce returns for investors

Institutions & laws must be re-examined

REFORM: Institutions of international governance such as the UN must be made fit for the 21st century. Reuters



Arun Maira

Former Member, Planning Commission

FORMER US President Abraham Lincoln said: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” Lincoln’s insight has come to haunt the US. After World War II, when US military support helped the Allies secure victory, Hollywood movies projected American soldiers as defenders of liberty around the world. The US economy, least damaged by wars fought on others’ lands, grew large and the US mass media industry circulated images of the comfortable lifestyles of middle-class white Americans. In the public’s imagination since then, the US has been a shining beacon of liberty and economic progress.

The creation of a new legal form for business enterprises has become imperative to save humanity and the planet.

Though reality since then did not conform to this mass-produced image, most US citizens and others continue to see the US as a knight in shining armour defending freedom across the world. The US hubris, with its military and economic might, exercised through overt and covert operations, has harmed millions in Vietnam, Iraq, Afghanistan, Chile, Cuba and many other countries. The US’s unshakable support for Israel in its ongoing brutal war against Palestinians, now horrifically visible in Gaza where two million citizens are being starved of food and water and deprived of medical assistance, and where over a thousand innocent children have already died, killed by Israeli and American-supplied weapons, should wake up the US to Lincoln’s warning. You can never fool all the people all the time. US actions are about power, not principle. While the US is increasing military aid to Ukraine to defend itself against an invader from across its borders, it is also rushing to give even more military aid to Israel, the aggressor across poor Palestine’s borders!

Institutions evolve with shared values. The US is an invented country with a short history, ruled by laws enshrined in its Constitution written in 1776. Those laws are expected to uphold universal values of liberty, equality and fraternity. Lincoln said in 1864 when the US was being internally torn by a disagreement about the rights of Black people for freedom: “We all declare for liberty; but in using the same word, we do not mean the same thing.” The US Constitution grants its citizens the right to bear arms to defend themselves against an oppressive government. However, innocent children in US schools are tragically being killed by citizens armed with military weapons. The US government is unable to change the laws because conservative judges uphold rights cast in stone in a Constitution written 250 years ago. Meanwhile, the US government declares citizens of any other country who take up arms to defend themselves against an oppressive foreign government — as Hamas has — as ‘terrorists’!

Institutions and laws must be re-examined from time to time, as Lincoln said. The US must examine its own Constitution. But more importantly for humanity’s future, institutions of international governance created in the last century — the United Nations, World Trade Organisation, etc — must be reformed and made fit for 21st-century realities.

The concept of a limited liability corporation to promote the interests of financial investors took legal form in the 17th century with the creation of the East India Company in London. The company was given a legal charter by the British Crown for doing business in other countries. Its board of governors was responsible for keeping accounts and sharing profits from the company’s foreign ventures amongst its investors. The governors were unconcerned about how the profits were made. British arms made it easier for the company to do business in other countries — by forcing the Chinese government to open the market for opium, for example. In India, the company’s officers forced farmers to grow poppy for its China trade instead of grain for their own consumption.

The rule of law must prevail in a civilised society. The question is: whose interests should it protect? In commercial law, property rights trump human rights. Companies can own land, forests and water sources as resources for their business. When the slave trade was banned, business owners could not own their workers’ bodies. However, owners of business enterprises continue to own the labour: they have legal rights to force workers to do their bidding or be fired. Property rights have been extended to knowledge too. Knowledge created by a company’s research even when largely funded by governments, and traditional knowledge created by communities as well, can be patented and owned by a company.

The limited liability corporation is a selfish entity created by laws. It has all the rights of ordinary human citizens — the right to own property, the right to free speech, and the right to sue other citizens to protect its own interests, but with limited liability for the harm it may cause others to make more profits. Multinational companies have become sovereign entities under law. Investors in multinational companies can sue the government of a sovereign country in an international tribunal to protect their private financial interests. Money can buy anything. Companies use their financial muscle to influence public opinion by lobbying, funding think tanks and buying the media. When ordinary citizens protest, a company’s lawyers can harass them into penury.

Companies that produce arms sell them to any buyer willing to pay the price: often selling to both sides of a war at once. They are interested in the profits they can make and not with ethics. Mustafa Suleyman, founder of DeepMind, the institution leading the development of AI in Google, reveals in his book, The Coming Wave, that the development of artificial intelligence and synthetic biology has reached a dangerous stage. He says that these technologies cannot be left in the hands of limited liability, private corporations any longer. The risk to humanity is too great.

The purpose of a genuine social enterprise must be to serve society, not to produce returns for investors. The creation of a new legal form for business enterprises has become imperative to save humanity and the planet. Powerful institutions will not voluntarily change themselves. Greater pressure to change laws and institutions, to make them serve the sustainability of life for ordinary citizens rather than the ease of making profits for investors, will have to come from global civil society.


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