AMY GOODMAN: This morning, the Secretary of Labor Robert Reich is convening his Fashion Forum in Virginia. Many are calling the event the sweatshop summit. It follows his testimony yesterday before a Subcommittee on Child Labor. He testified along with entertainer Kathie Lee Gifford.

Today, we have a debate on corporate responsibility. We begin with John Hood. He’s author of the book The Heroic Enterprise: Business and the Common Good. He is a former Bradley fellow at the Heritage Foundation here in Washington, D.C., and is president of the John Locke Foundation, a think tank in Raleigh, North Carolina.

John Hood, why don’t we begin with the thesis of your book, The Heroic Enterprise?

JOHN HOOD: Well, the thesis of my book is, in many ways, a defense of the corporation as an institution, and of free enterprise as an institution, against a lot of the criticisms that have been lodged in the past few years that corporations sacrifice the interests of consumers and workers and others at the expense of greed, that corporations are engaged in a unprecedented downsizing and reduction of opportunities for workers, and things like that. I basically challenge all of those on factual grounds. And I also argue that corporations fulfill their responsibilities best when they seek to maximize profits and return value to shareholders and to consumers.

AMY GOODMAN: And how does that guarantee a safer workplace or a safer environment?

JOHN HOOD: Well, a safer workplace is a good example, because workplace accidents are extremely costly affairs. It costs you a lot of money when you lose production, when you lose a talented employee that has to be sidelined or replaced, and the replacement retrained. You lose a lot of money in — obviously, in liability. You reduce — you raise your costs for workers’ compensation insurance and other insurance costs when you pay no attention to safety. And the bottom line is that these incentives for managers to worry about workplace safety, in my view, far outweigh the somewhat unlikely prospect of actually being fined by OSHA, which is not an argument for increasing OSHA fines. It’s an argument that, in the last analysis, the economic incentives in favor of safety are very strong and work most of the time.

AMY GOODMAN: And we’re also joined by Richard Grossman. He’s co-director of the Program on Corporations, Law and Democracy, and he’s put out a pamphlet called Taking Care of Business: Citizenship and the Charter of Incorporation. You bring a slightly different perspective to the issue of corporations.

RICHARD GROSSMAN: I think we disagree about the fundamental purpose and nature of particularly the large — today’s large corporation. I don’t think it’s a wealth generator as much as it is a consolidator of wealth, of other people’s wealth, and a consolidator of power. And I think — I think that it’s important for people nowadays, as particularly that large corporations have amassed so much economic power and have changed that into political power, as well, to consider what should be — what is the nature of the corporation, what should it be, and what is — what should be the legal relationship between us, as the sovereign people, and these artificial entities.

In his book, Mr. Hood quotes Milton Friedman talking about just profits and the responsibilities of businessmen. But Friedman says — I have a — from an article he wrote in The New York Times a couple of years ago, he said that it’s the responsibility of corporations to make as much money as possible, while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom.

But I think the — for me, the problem is that, in fact, the corporation, the large corporations, are writing the rules. They’re writing the laws. They’re electing the people, local, state and federal office. They’re educating the judges. They’re really not just sticking to their purpose for which they’re chartered. They are, in fact, rewriting the rules of society. And to that, under those conditions, they’re decreasing competition and basically preventing people from doing what it is we need to do in order to protect our communities. So, I think, on the whole, the very large corporations have been playing a very negative role in this society for over a hundred years.

JOHN HOOD: I happen to own some shares through my retirement plan of all sorts of large corporations, and I like it when large corporations make profits and return dividends and capital gains to me, because that means that I’m going to be able to retire. Of course, Social Security will probably not be around when I retire, so I need the wealth generation that corporations, large or small, generate in order for me, as an individual who is not wealthy and will never be wealthy, to have a comfortable and happy life.

Now, the point about writing the rules, I think, is actually a legitimate point, because corporations do play a significant political role, not a direct role in campaign finance, of course, but certainly an indirect role, and corporate executives do play a very important role. But I think this is an artifact of the size of our government. I think that government tries to do too much and is involved in too many things. And naturally, corporations will attempt to manipulate that process to help themselves. And there are many, many examples of corporations that use government power to protect themselves from competition.

RICHARD GROSSMAN: So, when a large corporation causes harm, such as 11 years ago, the Union Carbide Corporation, in a single night, killed over 10,000 people in Bhopal, India, and many, many more people died subsequently and have been permanent — others have been permanently injured, I’m wondering: What should be the sanctions against this corporation? They still haven’t been to trial. There still hasn’t been a trial. They still haven’t faced, you know, the bar of justice. What should happen to a corporation when it causes major harm like that?

JOHN HOOD: Well, the answer is pretty clear, that when you — when the corporation engages in malfeasance that affects neighbors or other innocent bystanders or workers and damages their interests, then they should be held liable for that. The problem, of course, is that the Bhopal disaster did not occur in the United States, and you’re really held hostage — 

RICHARD GROSSMAN: But Union Carbide is chartered in New York state, so it’s — 

JOHN HOOD: So what?

RICHARD GROSSMAN: — chartered here.

JOHN HOOD: It doesn’t make any difference. Chartering is essentially — is simply a legal permission, a legal stamp of approval on an agreement that’s already been made between private contractors. I just think corporations are —

RICHARD GROSSMAN: Oh, I’m afraid I — I disagree strongly about that. The chartering, chartering is — I mean, the corporation has historically in this country been a subordinate entity, an artificial entity. And through the charters and the state corporation codes, in some cases through state constitutions, the sovereign people have, in fact, defined the corporation. And historically, states reserve the right to amend and revoke the charters of corporations and to dissolve them. And — 

JOHN HOOD: That is correct, of course. But the point is, the history of the corporation, you’re absolutely right, was originally a government creation. The corporation was a government creation. But that has evolved tremendously since the kings and queens made corporations. We now have 50 —

RICHARD GROSSMAN: No, we’re talking about this country, not the kings or queens.

JOHN HOOD: Well, no, let’s —

RICHARD GROSSMAN: I mean, in this country, the states charter the corporations.

JOHN HOOD: That is correct.

RICHARD GROSSMAN: We didn’t have a king after the American Revolution.

JOHN HOOD: That is correct. The people, in very serious and important ways, own corporations.

RICHARD GROSSMAN: Which people is that? The stockholders?

JOHN HOOD: That is correct.

RICHARD GROSSMAN: But stockholders have very few rights. I mean, in fact — 

JOHN HOOD: I am a stockholder. If I choose not to —

RICHARD GROSSMAN: — over the last 15, 20 years, as I’m sure you know well, stockholder rights have been trampled upon mercilessly. They don’t really have a say in what takes place within a large corporation.

AMY GOODMAN: John?

JOHN HOOD: Well, there’s — of course, they do. They can leave. This is the fundamental — 

RICHARD GROSSMAN: Yeah, but how does that change the corporation? They leave, but the corporate harms still continue.

JOHN HOOD: It’s very simple. If you’re taking an action that discourages people from owning your stock, the value of your stock will go down. There will be less demand.

RICHARD GROSSMAN: Hey, look at the cigarette corporations. They can be — there are very few entities in this world that do as much harm as the cigarette corporations. How’s the stock been doing lately?

JOHN HOOD: I’m from North Carolina. Do you think I believe that tobacco companies are doing harm, doing more harm than — 

RICHARD GROSSMAN: I have no idea what you believe.

JOHN HOOD: — any other institution?

RICHARD GROSSMAN: What do you believe?

JOHN HOOD: I think that — that people have the right to smoke, and that this is a voluntary choice, and I believe in freedom. And I do not believe that it — 

RICHARD GROSSMAN: OK. The Union Carbide Corporation killed all those people. The stock is up. So, it didn’t — it didn’t harm the ability of — didn’t harm the stock. It went down for a while, but now it’s back up.

JOHN HOOD: That’s correct.

RICHARD GROSSMAN: What does that reveal to us?

JOHN HOOD: What that reveals is that people who are investing in Union Carbide —

RICHARD GROSSMAN: Don’t give a damn, huh?

JOHN HOOD: That is — that is essentially correct. They value more the value that they will receive from that investment than the — what they perceive to be a marginal impact on a decision that, let’s face it, happened in India. This is not —

RICHARD GROSSMAN: Those were human beings.

JOHN HOOD: Look —

RICHARD GROSSMAN: They weren’t marginal.

JOHN HOOD: You’re absolutely right, but if — 

RICHARD GROSSMAN: They were 10,000, 11,000 human beings.

JOHN HOOD: Right, but if that fire had occurred in my home state or some other state, it would obviously be the state’s responsibility to protect its citizens against harm. It is India’s responsibility to protect its citizens against harm. And if you’re arguing that Union Carbide is using its political power to stymie India from doing that, I would probably agree with you. But this is a different issue.

RICHARD GROSSMAN: OK. How about Imperial Food Products, which in North Carolina in 1991 —

JOHN HOOD: Yes.

RICHARD GROSSMAN: — 25 people died at a fire in the poultry plant?

JOHN HOOD: Yes.

RICHARD GROSSMAN: The state fined the company $800,000, about $32,000 per life.

JOHN HOOD: Right.

RICHARD GROSSMAN: Do you think that’s appropriate?

JOHN HOOD: Well, it was — there was no need for a fine. I don’t know if you’re aware of this, but Imperial Products was destroyed by the fire. I mean, the fact that you fine somebody after the fact — 

RICHARD GROSSMAN: So, who takes responsibility for the awfulness that happened?

JOHN HOOD: Well, number one, they were met —

RICHARD GROSSMAN: I mean, isn’t that one of the roles of corporations, in order to shield the human beings, the people who try to make money from them, who are making money, and the decision makers, to shield them from any real legal responsibility?

JOHN HOOD: My argument is that OSHA regulation — and I’ll use the Hamlet case as an example — is in no — is never going to get their attention as much as the fact that that firm has been destroyed by very bad management — 

RICHARD GROSSMAN: Doesn’t help the 25 people who were killed.

JOHN HOOD: — and some bad regulation. Well, of course, all — you know, you don’t live in a perfect world, and there are always accidents. What you want to do is you want to deter future accidents by making it extremely financially costly to have an accident. We have such a system today. I guarantee you, I have friends who are in — who are employers in North Carolina, who, after the fire — 

RICHARD GROSSMAN: Unlocked their doors.

JOHN HOOD: Well, they weren’t going to have locked doors. That was a — that was fairly unique. But they did look very closely at their safety procedures to make sure they wouldn’t face a similar situation. It was not because they were going to be fined half a million dollars or $800,000. It was because they did not want to have their entire plant destroyed, and all of these lives, and all the bad publicity and the lawsuits and everything else, and the higher insurance costs, if they ever were able to do business again. There are so many incentives that overwhelm the government regulation here, that I just don’t think it matters.

AMY GOODMAN: We’re talking to John Hood, who’s author of The Heroic Enterprise: Business and the Common Good. He is president of the John Locke Foundation, a think tank in Raleigh, North Carolina. And we’re also joined by Richard Grossman, co-director of the Program on Corporations, Law and Democracy. I have to go back for a second to the Bhopal case, because I think your response will stun many. Corporations are global entities now, wherever they may be chartered. Do you really think that they should be shielded from responsibility because, while they’re based here, their factory was in India? I mean, is it appalling to you that they killed more than 10,000 people? And what do you think should happen to — was it Warren Anderson who was the CEO at the time of Union Carbide?

JOHN HOOD: That sounds right. I’m not sure.

AMY GOODMAN: Do you think he should have been thrown in jail?

JOHN HOOD: In the American system? I mean —

AMY GOODMAN: In an American jail or in an Indian jail?

JOHN HOOD: Possibly. I really am not — not a legal expert on these matters, and wouldn’t — wouldn’t want anybody to get to get away with doing anything that is malfeasance that leads to somebody’s death, or 10,000 deaths. I think that to examine the Bhopal case as an example of corporate responsibility is to dramatically miss the point. Those are very isolated types of accidents. What corporations do every day is create goods and services that people want, employ people, train people, generate all sorts of wonderful things.

AMY GOODMAN: Well, then, what about going once again to the tobacco industry? Four hundred thousand people die a year of tobacco-related illness.

JOHN HOOD: That’s right.

AMY GOODMAN: This is not an exception to the rule. This is the rule.

JOHN HOOD: That’s right.

AMY GOODMAN: So, what do you think should happen to the tobacco — what kind of responsibility does the tobacco industry bear? For example, what do you think of the attorneys general around the country that are suing the tobacco industry, saying, “You should be responsible for our healthcare costs, for our Medicaid costs, that we are having to pay as a result of your products”?

JOHN HOOD: I think that’s nonsense, because to — for that suit to win would simply be a field day to attack every single — every single corporate — every single corporation or company or business that does anything that has a health impact.

AMY GOODMAN: For a point of clarification, Richard Grossman, what would you change right now for corporations? How would you change law?

RICHARD GROSSMAN: OK. Well, just to say, up until the 1880s, before the Supreme Court made that switch, corporations were not considered persons and didn’t have a lot of — didn’t have civil rights of persons, didn’t have Bill of Rights protections. I think that one of the most important sources of corporate power today is that they’re considered persons under the law, and they have First Amendment protections. They have Fourth Amendment, the right from unreasonable search and seizure. They have 14th Amendment protections, the right to equal protection of the laws. Now, as I just said before, that’s the justification, the rationalization for corporations giving money to candidates, advertising on elections and issues of public policy, and lobbying, setting up all these front nonprofit corporations, like trade associations, to hire lawyers and lobbyists to go ahead and actually write the laws and influence our lawmakers,

AMY GOODMAN: But John Hood is saying, in fact, these are people behind these corporations who are doing all this.

RICHARD GROSSMAN: Well, if corporations weren’t persons, then the CEO, on his or her own time, just like every other normal citizen, could go and meet with his congressman, or out of his own pocket could give — could give money. That certainly would be appropriate. All individual human beings, citizens, can do that. But for the entity of the corporation to use shareholder money and to use its great power to involve itself in the basic mechanisms of a democratic — of the democratic process, elections and law making and education of the public, I think is totally inappropriate. And so, frankly, from my point of view, the personhood doctrine needs to be overturned, just as the “separate but equal” doctrine was overturned by the Supreme Court.

AMY GOODMAN: But I think we have to recognize that in this world, that a corporation not only concentrates wealth, it also concentrates power, and that distorts the political process, and it gives advantage to people who are wealthy. And to people who can’t participate in that, to poorer people, they are not — they don’t have the advantage of all of this power.

JOHN HOOD: I actually quite agree with that. I think that people with money will always dominate politics. I think anything you do, short of getting rid of the First Amendment, would have no effect on that, because if you — if I’ve got a million dollars, and I want to spend it to try to tell people to vote my way, I’m always going to out — probably outhustle somebody with a thousand dollars. Do I think that that is correctable? I do not, under a free society. Therefore, it is my argument that we should constrain what we expect from politics and treat it as the corrupt, inherently corrupt, institution that it is.

RICHARD GROSSMAN: I think you’re really trivializing the enormous amount of money from corporate coffers that go to lobbying, not necessarily directly to the — to buy lunches and whatever for the elected officials, but to all the thousands of corporate front organizations and to groups like the Heritage Foundation and the American Enterprise Institute to produce all kinds of documents, with corporate money, to shape the public debate, to put out, you know, false and misleading opinions and all that. And that’s the way the corporations, for the last over a hundred years, have, in fact, been shaping public consciousness and public education, really involving themselves in colonizing people’s minds, so that today, you know, you have a lot of people feeling there’s no alternative to the big corporations, even though they experience the enormous amount of harm and suffering that comes from what corporations are putting out into the air, the poisons they’re putting out into the air and the water, and the perversion of the democratic process, and their destabilizing of communities all over the country.

JOHN HOOD: Well, first of all, the Heritage Foundation receives about 5% of its funding from corporations, the vast majority of it from individuals, probably wealthy individuals, but definitely individuals. Number two, corporations give a lot more money —

AMY GOODMAN: Well, usually, probably, wealthy individuals who were made wealthy by their involvement in corporations.

JOHN HOOD: Or they could have inherited it. Right? I mean, who cares? The point is, yes, think tanks raise money from people with money. Well, you know, actually, Heritage Foundation is the broadest-supported think tank in the United States in terms of how many people give. But the point is, corporations, as institutions, which I think is our point here, play a very minor role in funding any sort of public policy organization, with the possible exception of the American Enterprise Institute.

RICHARD GROSSMAN: How about the — 

JOHN HOOD: Secondly —

RICHARD GROSSMAN: But I’m talking about groups like the Chemical Manufacturers’ Association —

JOHN HOOD: Excuse me just a second, please. Yes.

RICHARD GROSSMAN: — and the forestry associations. I mean, all of the industry associations — the Chlorine Association, when they needed to start defending chlorine, all of a sudden they had $50 million in their bank account.

JOHN HOOD: OK, the second point is that corporate donations, primarily, inordinately, go to left-of-center organizations versus right-of-center organizations, the large corporations, anyway. Now, this only means — 

RICHARD GROSSMAN: Could you name me an example of a left-of center organization that is the recipient of the largesse — 

JOHN HOOD: NAACP, environmental organizations, the Urban League. These organizations get a lot more corporate money. And I’m not saying they’re better funded. I’m only saying that they get a lot more money from corporate entities than conservative or free market organizations do. So, just on the face of it, your statement is inaccurate.

RICHARD GROSSMAN: What about the Chemical Manufacturers’ Association, all those groups?

JOHN HOOD: But the trade associations, you’re absolutely right.

RICHARD GROSSMAN: That’s where the real money is.

JOHN HOOD: Well, that is correct. A great deal of political power and lobbying power is concentrated in trade associations, which are funded both by corporations and by individuals, proprietors and partnerships.

RICHARD GROSSMAN: They’re mostly funded by — I bet they’re 80-90% funded by corporations.

JOHN HOOD: Well, it depends upon the association you’re talking about.

AMY GOODMAN: We have to break. We’ll be back in a minute to continue this debate. John Hood, president of the John Locke Foundation, a think tank in Raleigh, North Carolina. And we’re speaking with Richard Grossman, co-director of Corporations, Law and Democracy. This is Democracy Now! We’ll be back in 60 seconds.

[break]

AMY GOODMAN: Tomorrow on Democracy Now!, we’ll be taking a look at one case study of corporate power in this country and around the world. We’ll be taking a look at Nike. This follows today’s summit, the sweatshop summit, convened by the Secretary of Labor Robert Reich. I’m Amy Goodman. And right now we continue our debate on corporate responsibility. Our guests, John Hood, author of The Heroic Enterprise: Business and the Common Good, and Richard Grossman, who’s co-director of a program in Massachusetts called Corporations, Law, and Democracy. And, Richard, you had a question for John Hood.

RICHARD GROSSMAN: Yeah, I’m wondering if — Mr. Hood, if you think that there’s any entity in the country that really has authority over the corporation. I mean, corporations, the people who run corporations, are making very important decisions that affect not just the air and the water and the labor, you know, what kind of work is done, but really affect the culture and the way people think. Is there any entity in this country that has authority over that? Who’s this — you know, when a giant corporation — 

JOHN HOOD: Depends on the issue.

RICHARD GROSSMAN: — with great technological capacity and great wealth makes a certain decision to do something that has enormous repercussions, is there any — you know, do they have any — I mean, what is our role as a sovereign people in all this?

JOHN HOOD: Well, I think it’s very clear. First of all, I do not think that anybody is sovereign over me as a citizen of the United States in taking certain actions that do not violate the rights of anybody else. OK, so, number one, I do not respect the sovereignty of the people over me. This is a fundamental constitutional question of do you have the right to tell me what to do, as long as what I am doing is not violating your rights. So, yes, absolutely, the corporations are governed by local, state and federal governments. When those corporate actions violate the rights of its citizens, and, absolutely, when that happens, the government has authority over the corporation.

RICHARD GROSSMAN: But in reality today, our states are not exercising — well, and the federal government are exercising very little authority. And in fact, most of the harms that giant corporations are doing today are treated as legal. And when a corporation does a horrible harm, you know, the worst that can happen is that they get a big fine, which they then deduct from their taxes. So, you know, where — how do we — you know, it’s the giant corporations that are really shaping the culture and shaping society. How are we, as the sovereign people, all of us, together, as citizens — how are we supposed to shape our lives and shape our communities, when so much power, political power, is really wielded by these artificial entities that are called corporations?

JOHN HOOD: A corporation cannot make me work for them. They can’t make me buy a product from them. I’m a free —

RICHARD GROSSMAN: No, but they can limit your choices enormously.

AMY GOODMAN: They can pollute the air, so that you are forced to breathe it.

JOHN HOOD: Of course. And that is not a permissible activity.

RICHARD GROSSMAN: But it happens all the time.

JOHN HOOD: I mean, come on. That’s — let’s not —

AMY GOODMAN: But let me — but let me ask you —

JOHN HOOD: Well, it needs to be policed, but that’s a different — that’s not the same thing.

AMY GOODMAN: But, John, let me ask you something. You’re from the Heritage Foundation. After the Republican victory in 1994, the freshman Republicans went over to the Heritage Foundation for their training to become congressmembers for the first time. One of their main goals is to gut the regulatory agencies, because they feel that they limit free enterprise. They want to — they say they want to engage in this devolution, devolution of power to the states. Now, people like Noam Chomsky say the reason they want to give these powers to the state, take them away from the federal government, is that there is no power at the state level that is strong enough to regulate these massive multinational corporations. And so, what they’re, in effect, doing is just allowing these corporations free rein by taking power away from the federal government, the only entity that can be any kind of check on the power of corporations. So, on the one hand, you say we, as citizens, have the right to regulate corporations, but you come from the very foundation that is trying to gut all the agencies that would regulate these corporations.

JOHN HOOD: Well, I mean, there’s no inconsistency in saying that the government has an authority over, you know, protecting the environment and other rights of individuals, and to say that, for example, a particular agency spends too much money or does it the wrong way or is excessive or burdensome. There’s no —

AMY GOODMAN: This is not just excessive or does it the wrong way. They’re trying to completely wipe out the EPA —

JOHN HOOD: Well, let’s —

AMY GOODMAN: — completely wipe out the FDA.

JOHN HOOD: Well, let’s — let’s take this issue apart a little bit. Number one, many, many large corporations would much prefer — and if you follow the politics on this very closely, you will see that large corporations do not want to be regulated by 51 different entities and have to deal with them. They would much rather have the federal government preempt all those regulations, and, yes, probably cut the best deals they can get. So, large corporations are not always in favor, or even frequently in favor, of devolving regulatory power, or certainly legal liability to the states. They would much rather deal with one entity.

RICHARD GROSSMAN: Right. They spent a hundred years taking the power away from the states and putting it in the federal government, frankly.

JOHN HOOD: I actually agree with that. I think the states need a lot — need to play a much greater role in our — in our [inaudible].

RICHARD GROSSMAN: But that means the states have to have real authority. It means that the chartering process and the state incorporation code — the state incorporation codes have to be enforced. And they have to — you know, when a corporation misuses its trust and exceeds its authority and violates the terms of its charter, and really of the body politic as a whole, then the state has to have the ability to sanction that corporation in a serious way without causing a revolution. And I think the only really serious sanction that corporate leaders are going to understand is that the states need to start revoking charters when corporations engage in harmful activities, either to life, to property or to the democratic process. How can the states really be effective unless they have actual authority to do something to these corporations?

JOHN HOOD: States can fine them. They can imprison the corporate manager. I mean, I don’t understand why chartering would have any — would make any big deal.

AMY GOODMAN: How often has a state imprisoned the corporate manager or head of an organization? I mean, there are some who argue that with — you look at the emphasis of crime on the street, and you say how much harm that does, people who rob others, etc., on the street. But if you look at corporate crime, at white-collar crime, in fact, much more money is taken away. We’re talking about hundreds of millions, billions of dollars. And much more harm is done. And yet very few corporate executives have ever gone to jail. Do you think that’s a problem? Do you think that’s why people in America are losing faith in corporations?

JOHN HOOD: Well, I don’t think that’s because — I don’t think that’s the reason Americans are losing faith in corporations. I think that’s primarily a media-driven phenomenon. But I do think that corporate executives, when they take actions that harm others, harm their rights, their constitutional legal rights, and the courts prove that, that managers are responsible, the corporation is financially responsible, to the extent to which this is not adequately prosecuted, it needs to be.

AMY GOODMAN: Do you think it’s a problem when corporations lie? Like companies that — like companies from your own home state. Actually, I don’t know where Philip Morris is incorporated, around Williamson.

JOHN HOOD: I think they’re in Virginia or something.

AMY GOODMAN: But what about the 30, 40 years of clearly lying, for example, saying that nicotine is not addictive, when, whatever you think — and I assume you don’t think it’s addictive — the documents that have come out of these companies clearly state that nicotine is addictive, and they have been saying otherwise for 40 years?

JOHN HOOD: Well, I think that that was — that nicotine is addictive, as many other products are, many other activities are. I am just very uncomfortable with the government deciding what people are and are not going to do, because today we may — I mean, I’m not a smoker myself.

AMY GOODMAN: Are you uncomfortable with governments deciding what people should and should not know?

JOHN HOOD: No, you’re absolutely right. The extent to which corporations have engaged in knowing falsehoods, whether it’s selling their products, whether it’s promoting their products, that is a — you know, that’s something for which they should be liable.

RICHARD GROSSMAN: You know, asbestos is not a voluntary choice like smoking. And the record is clear that the Johns — from internal documents from the Johns Manville Corporation that their officials knew that asbestos caused cancer 30 and 40 and 50 years ago, and didn’t reveal that.

JOHN HOOD: Yes.

RICHARD GROSSMAN: You know, we have — there’s a lot — 

JOHN HOOD: And I believe they got punished, didn’t they?

RICHARD GROSSMAN: No, they didn’t say. They declared bankruptcy and reorganized and saved the company and protected the company from most of the lawsuits. It’s a very limited sum that is being sought now.

JOHN HOOD: I actually think we do need to reform bankruptcy laws, by the way.

AMY GOODMAN: What about President Clinton’s White House meeting on corporate responsibility? What did you think about that?

JOHN HOOD: I thought it was very silly, because they were —

RICHARD GROSSMAN: That’s the first — we agree on that.

JOHN HOOD: Well, probably for different reasons. But I thought it was silly because you don’t evaluate corporate responsibility, in my view, according to whether firms provide certain types of health benefits, training, etc. In my view, responsibility has to do with what goods and services are produced, and whether people want them, whether people like them, and whether — and whether they’re, you know, providing social benefits. And I just think that that was the wrong focus, and, furthermore, that it was — that to argue that we’re in favor of voluntarily encouraging corporations to adopt better management practices sounds great, but I don’t think it squares with their actual agenda to use the tax code and the regulatory code to coerce firms to do what they want.

AMY GOODMAN: Do you think it would have been more honest if President Clinton laid out the records of the companies that he invited? For example, I’m looking at the Preamble Collaborative, this is a group in Washington’s list of the corporations and what they’ve done. WMX, subject of criminal investigations and antitrust suits in at least 17 states, cited over 600 times by the EPA for pollution violations from 1980 to 1990. Its subsidiary pled guilty to six felony violations of environmental laws, the largest criminal Superfund case ever, paid $28 million in settlements and fines between 1980 and '92 for price fixing, bid rigging, price gouging. That's just WMX, just one of the 73, or whatever the number was, corporations represented. Then there was Lockheed Martin, called “Lock-Mart” fondly by people in the business, laid off 100,000 workers from 1980 to ’95, accrued more OSHA fines than any other aerospace company from ’88 to ’93, demanded that employees forgo all claims against the company for labor law violations in order to be eligible for early retirement packages. Do you think it would have been honest, more honest, to talk about WMX, Lockheed Martin, United Technologies, etc., in this way, to say what their real records were about?

JOHN HOOD: Well, yeah, but that would kind of vitiate against the purpose of the photo opportunity. The examples you listed there, I mean, some of those things concern me, and some of them do not. I mean, I think that, once again, violating environmental laws is obviously one thing. Laying off workers is another. I’m very uncomfortable with equating a violation of rights with a decision about employment. You know, you don’t have a right to work at a particular firm.

AMY GOODMAN: Right. Well, I’m not talking about breaking the law.

JOHN HOOD: Yeah.

AMY GOODMAN: That would be an issue of corporate responsibility —

JOHN HOOD: Yeah.

AMY GOODMAN: — if you’re looking at workers laid off versus CEOs making millions off of laying off those workers.

JOHN HOOD: Yeah, well, I mean, that’s — I think a lot of that’s just media nonsense.

RICHARD GROSSMAN: But that’s the second or third time you referred to sort of media nonsense.

JOHN HOOD: Yeah.

RICHARD GROSSMAN: We’re talking about — what we’re talking about here is corporate — the corporate press. I mean, there are very few — the corporations that own and run the major media, whether it’s television, radio, press, magazines, are giant global corporations, so that, you know, they’re not just Joe down the street that publishes a little newsletter. We’re talking about giant corporations.

AMY GOODMAN: In fact, let me just say — 

RICHARD GROSSMAN: And you seem to dismiss a whole lot of stuff.

AMY GOODMAN: Richard, let me just say that I did not get this from the liberal media that you’re talking about. I got this in spite of that media, because these are media conglomerates.

JOHN HOOD: I’m actually not arguing that it’s the liberal media, so let me make myself clear. I think that we focus — and this is not an ideological point. It’s a question of the news business. The news business focuses on individual cases, because it’s more interesting as a news product. You’re not going to — you know, for example, you look at a firm that lays off lots of workers, 40,000 workers in the case of AT&T. Well, obviously, that very day, there were many, many, many, many firms that added many more than 40,000 workers, all totaled. We’re not going to report that. It’s not a news story. I think that there is — 

AMY GOODMAN: Can you name one firm that added 40,000 people that day?

JOHN HOOD: No, of course not. No, I’m not talking about a single firm adding. I’m talking about many more than 40,000 jobs would be created during that same period by many other firms. There was not a net loss of 40,000 jobs to the economy. But the loss occurs in big chunks. A firm lays off 40,000 workers, and that’s a news story. If, you know, 400 employers add a similar number, total number of workers, you can’t do a story on 400 different employers hiring.

AMY GOODMAN: Well, wait a second. I think there are two things going on here. One is, you may lose 40,000 of these kinds of jobs — 

JOHN HOOD: Right.

AMY GOODMAN: — and get 40,000 others, and they may not be the same quality of jobs.

JOHN HOOD: That’s right.

AMY GOODMAN: But, number two, should the CEO get a bonus for doing that?

JOHN HOOD: Sure, if it increased profitability of the firm, absolutely. That’s his job. His job is not to employ people. His job is to maximize value for shareholders. Sometimes that involves hiring people. Sometimes it involves not hiring or firing people.

AMY GOODMAN: But sometimes a corporation, especially these days, is not even necessarily going to be made more profitable by laying off those workers. It’s a kind of corporate anorexia that people are talking about these days. It’s just the fashion, even if it means being less profitable.

JOHN HOOD: No, that’s right, actually. Many corporations have gone too far with layoffs and have tried to do — do too much with that particular tool in reducing their costs, and have paid a price. The price is paid in the area of profit margin and whether you’re offering competitive returns. I think the market self-corrects for that. If corporations make those bad decisions, they definitely pay a price.

AMY GOODMAN: Richard Grossman, any comments on the issue of laying off workers? I mean, should it be illegal?

RICHARD GROSSMAN: No, I don’t have comments on that. Mr. Hood and I have very different conceptual notions about the nature of the corporation and the nature of us as a free people. And it’s my sense that giant corporations and democracy are incompatible, and that we have — we have these giant entities that are essentially functioning as governments that are shaping our societies, and we, as the free people, have very little control over them, and very little — we are exercising very little authority over them, contrary to the intentions of the founders of this country. And I think — I think we need to act on that. And so, I guess I found much of this conversation very unsatisfactory.

AMY GOODMAN: Well, let me just ask one thing as we end: In a few minutes, in a nutshell, can you summarize the — can you summarize what it is you’d like to see in place of what we have right now?

RICHARD GROSSMAN: Well, I think that through our local, state and federal governments, and primarily through our local and state governments, I think we need to exercise real authority to define the corporation, that if we’re going to give these entities the enormous political powers that they have and investment powers and authority, then we need to define them in very specific terms, so that if people want to come together to form a corporation to make paper, they can make paper, but not write the rules to make paper, to not write the environmental laws and the labor laws and all that. And if they want to abide by the rules that are set by the people, then they’ll get a charter. And if they violate the charter, then they’ll cease to exist. And I think — and the corporations should not have any role in elections, should not have any role in law making. They shouldn’t have any role in shaping public policy debate. They shouldn’t be influencing our universities and our education. Their role should be very limited.

And we, the people, have to act as sovereign citizens, and we have to take responsibility. We’re the ones who have to be socially responsible by controlling all the institutions that we create to help us do our work. And I think, in fact, what we have is The Sorcerer’s Apprentice, that we created these corporations in order to help us do work, and the corporations have recreated the circumstances of their own existence, and now, under law, they have more rights and powers than people do. And they have plenty of very smart people, like Mr. Hood, who come along and have all kinds of very clever theories to justify why we, as a free people, have no authority over these corporations, and our only choice is to try to regulate them around the edges or ask corporate executives, “Please, please, don’t cause too much harm. Please be responsible. Please be a little nicer,” when corporations are raping and pillaging in this country and around the world. And I think if people are concerned about the nature of corporate power, then we have to focus on who really is in charge in this country, who’s going to shape our country and our culture. These corporations or us as human beings?

AMY GOODMAN: Can you tell us how to get in touch with the Program on Corporations, Law and Democracy?

RICHARD GROSSMAN: Sure. They can get in touch with us at Post Office Box 806, Cambridge, Massachusetts 02140.

AMY GOODMAN: One more time?

RICHARD GROSSMAN: Box 806, Cambridge, Massachusetts 02140.

AMY GOODMAN: On that note, we’re going to have to wrap up. I want to thank John Hood, author of The Heroic Enterprise: Business and the Common Good and president of the John Locke Foundation. How can people get in touch with you?

JOHN HOOD: We’re in North Carolina, and our telephone number is 919-828-3876.

AMY GOODMAN: Again?

JOHN HOOD: 919-828-3876.

AMY GOODMAN: And we did a little checking. John Hood, author of The Heroic Enterprise, was a former Bradley fellow at the Heritage Foundation. We checked People for the American Way’s guide, Buying a Movement: Right-Wing Foundations in American Politics, and it says, on the Lynde & Harry Bradley Foundation, that it illustrates the power of a well-financed foundation. Harry Bradley was an active member of the John Birch Society. It became a major foundation when it bought Rockwell International — when it was bought by Rockwell International Corporation, sponsors — it funds the National Empowerment Television and was one of the funders of Charles Murray’s book, The Bell Curve. You’re listening to Democracy Now! Up next, a look at SLAPP suits. Stay with us.