“While non-profit corporations must be just as businesslike as their profit-making counterparts, they have different motives and behaviors than for-profit corporations.”
Corrupt governance corrupts the free market. The free market, after all, is simply a democratic decision-making mechanism, in which people vote with their money. Their collective purchases, sales and investments influence what is produced, how much of it and how much it costs. In a New Reality, consumers have a choice of what kind of corporate ethics and values they want to support with their patronage.
Jefferson’s final draft of the Declaration of Independence, published on July 4, 1776, proposed an ideal of democracy that did not exist anywhere in the world, and in the same year Adam Smith proposed an ideal of free market capitalism that did not exist anywhere. We are still trying to achieve those twin ideals.
Democratic capitalism finds itself facing an ominous challenge. Will democracies throughout the world truly represent all their citizens, or will they continue to favor the wealthy and powerful minority, who can influence elections and government regulations to their own benefit? Will free market capitalism share its gains in productivity with everyone…or not?
Although Ray Dalio, the founder and manager of the largest hedge fund in the world, built a fortune thanks to capitalism, he’s keenly aware that it is a deeply flawed system. “Capitalism basically is not working for the majority of people. That’s just the reality.” Dalio predicts the income gap will only get worse.
Disparity in wealth is evident not only when comparing ordinary people with the billionaire founders and owners of large corporations, but also with the managers of those corporations.
Jack Bogle, founder of Vanguard funds—which pioneered the now widely accepted “index fund”—died this year with less than $100 million. Having given away half of his income to charities every year, Bogle truly was in the vanguard of a New Reality in capitalism.
Can we establish a substantial organization—a GLIA—that cares about the needs of ordinary people, and has sufficient influence to counterbalance the powerful government and corporate interests that dominate the world?