We’ve distilled three findings from our inquiry to address these issues systemically.

1

In 1970, Milton Friedman declared that a corporation’s purpose is to maximize profits for its shareholders. This statement is structurally accurate for corporations that are ultimately owned and controlled by its financial shareholders, which include Wall Street corporations.

In his infamous essay, Friedman warned that this theory would be corrupted by businesspeople masking the profit motive under veils of social responsibility:

“What does it mean to say that the corporate executive has a ‘social responsibility’ in his capacity as a businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers.”

2

Profit-maximizing corporations are masking their special interests with progressive rhetoric. For example, the leading lobbying group of corporate executives declared in 2019 a fundamental commitment to American employees, customers, and local communities.

But let’s look at the facts.

1. Large corporations continue to be owned and controlled by financial shareholders. While corporate rhetoric may emphasize pro-social missions and other stakeholders, minimal structural changes have been made to substantiate those claims.

2. Large corporations have been first in line for tax cuts (2018) and bailouts (2008, 2020) at the expense of public spending priorities and the federal deficit.

3. Large corporations have been the leading drivers of inflation (2021-24)

4. Large corporations meddle in democratic elections through Super PACs, and their lobbying efforts persistently stall efforts that would benefit consumers, employees, and the environment.

5. Large corporations have consolidated control over the political media, including newspapers, television networks, and social media platforms.

6. While Americans are falling behind due to rising inequality, the stock prices of large corporations continue to mark record highs.

The elephant in the room: Entering the 2024 election year, Americans’ satisfaction with democracy continues to mark new lows, and there’s a constant threat of political extremism spilling into violence.

While large corporations are gaining power, the foundations of American civil society are fraying.

3

Within a free society, the purpose of a corporation is collectively determined by its people.

This statement is rooted in the foundations of what a corporation actually is — an incorporated organization that’s granted rights and privileges under the rules of its society. Within a free society, those rules are set by its people through its democratic institutions.

Progress towards an empowered economic democracy may include:

1. Removing corporate funds from democratic elections. Super PACs position the power of money over the power of the American people.

2. Establishing standards for corporate rhetoric. Claims such as being “purpose-driven” and “stakeholder-driven” deserve to be substantiated by verifiable corporate structures. Misleading claims deserve to be called out and penalized.

3. Raising the bar for responsible business. Many leading causes of death, social costs, and ecological damages result from corporate economies. We can raise the standards of corporate responsibility to reduce harmful externalities and incentivize sustainable behavior.