ALLEGIANCE - March 4, 2010

The trouble with Toyota points to a fundamental flaw in our legal and community thinking about what corporate interests owe the public and the stockholders. There is an undercurrent in that thinking that assigns something like a holy mandate to the commitment to the stockholders to maximize dividends, almost regardless of the cost to the People generally, but it seems today that an unusual exception is being made in the case of a successful foreign corporation. We have lived for decades with outrageous behavior on the part of companies, egregiously by the promoters of lead in gasoline, by tobacco companies, by the owners of chemical corporations and petroleum refineries, and even by the US government, acting against the lives and health of the Utah families that had to live for decades under huge fallout from atomic testing. Profits, financial or geopolitical, trumped everything. In automobiles, the Ford company fought like a tiger to defend the explosive location of the fuel tank in the Pinto. Yet the interest, and even the needs, of the public were brushed aside in an appeal to an obsolete principle, the obligation of the company to maximize the return to the stockholders, an understanding that had wide support 250 years ago when the Free Market was new and in its Wild West stage, but one that now belongs to an outgrown earlier stage of civilization. Many of us can remember all the CEOs of the tobacco companies swearing under oath that they believed that cigarettes were not addictive. Many of us remember Bhopal, and now we have the ashes of the TVA running wild down the Tennessee River. But Toyota is a Japanese corporation, so we can demand attention to the needs of the US public that we have long ignored in American and European companies. I don’t approve of the indifference of the public, and I myself drive a Toyota Prius, but it is time for a higher level of civilization.