Citizens without obligations? Corporations without allegiance?
What about the rights and benefits of citizenship?
According to several observers, American corporations, even those with substantial international operations, reap innumerable benefits from being incorporated in the United States and being considered American “citizens.”
“American corporations are benefitting enormously from being thought of as American citizens,” said Richard Sylla, a professor of economics at the Stern School of Business at New York University (NYU). “And lots of policy gets made with the goal of helping American businesses, with the assumption that there is some relationship based on mutual obligation.”
Some of those benefits, Sylla said, are very direct and tangible. “You have the full force of American military and diplomatic power backing you up,” he said. “You can’t put a price on that.”
Sylla also mentioned that the Department of Commerce, Office of the U.S. Trade Representative, and the Export-Import Bank “exist only to find ways to give American companies an edge in global markets.”
Other observers cited a variety of other benefits that American corporations receive.
Wayne Ranick, the director of communications for the United Steelworkers, pointed out that American corporations “benefit from the infrastructure that is publicly financed, employees who are trained and educated, and the largest consumer market in the world.”
“There are a lot of benefits that get taken for granted,” said Scott Paul, the president of the Alliance for American Manufacturing. “The stability of the U.S. government and the size and reliability of the U.S. economy are great benefits for companies.”
Lynn Stout, a professor of law at Cornell University, said that the U.S. legal system was another great, underappreciated benefit for American corporations. “In terms of the quality of judges and the speed and efficiency of decision making, we have the most appealing legal system in the world,” she said.
Greg Martin of General Motors acknowledged that the company had benefitted very directly from policies such as the government bailout of the automotive companies in 2009, but also less directly from the country’s investment in research and development, skilled domestic workforce, and “the spirit of freedom and aspirational values that permeate American society and make it possible to succeed here.”
But most companies had a more difficult time explaining the benefits they had received. Several companies said that they had benefited most from being perceived abroad as being an American company, which helped them to sell their products in foreign markets. Lynn Brown of Waste Management cited government regulation that made it more difficult to operate municipal landfills, which “essentially allowed the company to come into being.”
According to Richard Sylla of NYU, “it’s revealing that the benefits they cite are so self-serving. It shows that they think of themselves as opportunistic entities, not participatory members of society.”
A fundamental disjunction
Sylla said the fact that many American corporations see themselves as entitled to the benefits of citizenship — without incurring reciprocal obligations — is reflective of a fundamental disjunction between how individual and corporate citizenship are perceived.
“We’ve determined that a corporation is legally like a person in lots of ways,” Sylla said. “They have rights, including the right to free speech, and they enjoy an array of benefits. Don’t most of us think that those rights and benefits come attached to obligations? When they say they don’t have any national obligations, it shows we have a double standard.”
William Lazonick, a professor and the director of the Center for Industrial Competitiveness at the University of Massachusetts, Lowell, pointed out that not only do many corporations benefit from being considered American citizens, but they also actively use their citizenship to lobby for further benefits.
“When they appear before Congress and say, ‘Unless you do this, America won’t be able to compete,’ they’re basically appealing to some notion of citizenship and the national interest,” Lazonick said. “They’re saying, ‘I’m entitled to something because I’m American.’”
When they then “turn around and say, ‘We don’t have any responsibilities,’” he went on, “that’s the pinnacle of hypocrisy.”
As an example, Lazonick pointed out that Apple has repeatedly lobbied Congress for a tax break that would allow it to bring profits made abroad to the United States at a lower tax rate, and has argued for the break because it would be beneficial for American workers.
But Apple executives have, on other occasions, renounced any national responsibility. “We don’t have an obligation to solve American problems,” one executive told the New York Times in 2012. “Our only obligation is to make the best product possible.”