Or, how did we get from here… …to here… Re-imagining the corporation …and

Jerry Davis where The University of Michigan do we August 18, 2012 go next?

1889-2012* ~2007-2011

The high water mark of corporate capitalism in the A few giant corporations dominated the economy United States: 1973

30 “blue chips,” 1974

Allied Chemical Eastman Kodak Owens-Illinois Glass Exxon Procter & Gamble American Can GE Sears Roebuck AT&T General Foods Swift & Co American Tobacco GM Anaconda Copper Goodyear Union Carbide Bethlehem Steel International Harvester United Technologies Chevron International Nickel U.S. Steel Chrysler International Paper Westinghouse Electric Du Pont Johns-Manville Woolworth

3 10% of the private workforce labored at 25 firms 90 white men each served on 5+ corporate boards

ADAMS, CHARLES F. HARDER, HOWARD C. MORGENS, HOWARD J. COMPANY EMPLOYEES (thousands) AYERS, THOMAS G. HARPER, JOHN D. MUNROE, GEORGE B. GM 810.92 BENNETT, GEORGE F. HAUGE, GABRIEL NYROP, DONALD W. AT&T 798.934 BERCHER, HARRY O. HEINEMAN, BEN W. OELMAN, ROBERT S. FORD 474.318 BINGER, JAMES H. HENLEY, HENRY H., JR. PALMER, EDWARD L. SEARS ROEBUCK 439.493 BROWN, CHARLES L. HILLMAN, HENRY L. PEARSON, NATHAN W. ITT 438 BROWN, COURTNEY C. HOLLAND, JEROME H. PETERKIN, DEWITT, JR. GE 388 BROWN, R. MANNING, JR. HUMPHREY, GILBERT W. PHALEN, CLIFTON W. IBM 274.108 , EDWARD E. JOHNSON, HOWARD W. POTTER, KEITH R. CHRYSLER 273.254 CHAMBERS, M.R. JOHNSON, WILLIAM B. PROCKNOW, DONALD E. JC PENNEY 200 CHAMPION, GEORGE KAISER, EDGAR F. PYNE, EBEN W. GTE 196 CISLER, WALKER L. KARNES, WILLIAM G. ROMNES, H.I. WESTINGHOUSE 194.1 CONNOR, JOHN T. LAFORCE, ARNOLD R. RUSSELL, GEORGE US STEEL 184.794 COOLEY, RICHARD P. LAPHAM, LEWIS A. SCHOENHOFEN, LEO H. COWLES, GARDNER LAY, HERMAN W. SIVAGE, GERALD A. GOODYEAR 155.4 COX, EDWIN L. LEARSON, T. VINCENT SMILEY, DONALD B. EXXON 137 CUMMINGS, TILDEN LEITHEAD, BARRY T. STANTON, FRANK RCA 126 CUNNINGHAM, HARRY B. LEVY, GUSTAVE L. STEWART, ROBERT H., III KMART 125 DAMON, ROGER C. LILLEY, ROBERT D. STUART, ROBERT D., JR. SINGER 122 DONNELLEY, GAYLORD LUKE, HUGH D. THOMAS, FRANKLIN A. EASTMAN KODAK 120.7 ETHERINGTON, EDWIN D. MARKS, HARRY T. THOMAS, JOSEPH A. DU PONT 118.423 FINLEY, JAMES D. MCCORMICK, BROOKS TYSON, CHARLES R. BETHLEHEM STEEL 118 FREEMAN, GAYLORD MEESE, WILLIAM G. VENEMA, MAYNARD P. SAFEWAY 117.221 FUNSTON, G. KEITH MENK, LOUIS W. WASSON, E. HORNSBY A&P 113.8 GATES, THOMAS S. MEWHORT, ROLAND A. WATLINGTON, JOHN F., JR. UNION CARBIDE 109.417 GOLDSTON, ELI MEYER, JOHN M., JR. WILLIAMS, ALBERT L. INTL HARVESTER 107.89 GRAHAM, DONALD M. MILLER, ARJAY WILSON, KENDRICK R., JR. LITTON INDUSTRIES 105.4 GRAHAM, WILLIAM B. MITCHELL, DON G. WORTHINGTON, LESLIE B. GRAY, JOHN D. MITCHELL, HAMILTON B. WRIGHT, JAMES O. Source: Compustat Annual Industrials GWINN, ROBERT P. MORGAN, GRAHAM J. WRISTON, WALTER B. 5 6

(And probably met at the Bohemian Grove) (And probably hatched unspeakable conspiracies)

7 A vision of a corporate-centered society What is a “corporation”?

““The factory system, the basis • A contractual device with limited liability, legal of the industrial revolution, “personality,” and unlimited lifespan brought an increasingly large • “Public corporation” => ownership shares are traded number of workers directly on a stock market under a single management. Then, the modern corporation, • Things that are not synonyms for “corporation” or equally revolutionary in its “corporate”: effect, placed the wealth of – Organization innumerable individuals under – Business the same central control” – Market –

9 10

Some premises of the corporate-centered society

1. The typical corporation makes tangible products 2. Corporate ownership is broadly dispersed 3. Corporate control is concentrated 4. Corporations aim to grow bigger in assets and 1.The typical corporation makes number of employees 5. Corporations live a long time tangible products

11 12 Manufacturing employment is increasingly rare in the US The largest US employers have shifted from manufacturing to retail and other services

10 Largest US Corporate Employers, 1960-2010 Since January 2001, the US has shed 5.5 1960 1980 2010 million jobs in GM AT&T WAL-MART Wal-Mart now manufacturing– AT&T GM TARGET employs roughly one in three FORD FORD UPS GE GE KROGER as many US STEEL SEARS SEARS HLDGS Americans as the As of March 2009, SEARS IBM “AT&T” 20 largest more Americans were A&P ITT HOME DEPOT manufacturers unemployed than EXXON KMART WALGREEN combined Proportion of US private labor force employed in were employed in BETH. STEEL MOBIL VERIZON manufacturing and retail, 1939-2010 (Source: BLS) manufacturing ITT GTE SUPERVALU

Manufacturing Oil Services

14

Retail jobs are not like manufacturing jobs

• Median hourly wage in • Median hourly wage in “Motor Vehicle “General Merchandise Manufacturing” for Stores” for “Sales and 2. Corporate ownership is broadly “Production Occupations” Related Occupations” (May (May 2008) : $27.14 2008) : $9.33 dispersed • Median tenure with current • Median tenure with current employer in “Transportation employer in “Retail Trade”: Equipment Manufacturing” 3 years (Jan. 2004 CPS): 8 years • Mean weekly hours worked at Wal-Mart: 34 • Estimated annual turnover at Wal-Mart: 40% 16 There was a time when the owners of corporations were dispersed “widows and orphans”

17 18

…and Fidelity is the largest shareholder of one in Now widows and orphans buy mutual funds and ETFs… ten US corporations…

Source: Spectrum 13F and 13G databases, various # of listed years firms in US 3833 5187 5828 4423

Source: Spectrum 13F database, various years

19 20 …and BlackRock is the largest shareholder of one in five US corporations

• BlackRock has $3.5 trillion in assets under management, including iShares • BlackRock owns 5% or more of over 1800 US corporations 3. Corporate control is concentrated • BlackRock is the single largest shareholder of one in five US corporations, including – ExxonMobil, Chevron, GE, AT&T, Verizon, JP Morgan Chase, Citigroup…and over 800 others

22

From Pujo to ~ 2001, corporate elites formed a well- …with sitting somewhere in the middle connected old boys’ network via shared directors…

GOLDEN WEST FINANCIAL CORP ONEOK INC NEW

WESTERN RESOURCES INC KS

ABM INDUSTRIES INC MURPHY OIL CORP

REGIONS FINANCIAL CORP

ALASKA AIR GROUP INC

AVISTA CORP

SCHOLASTIC CORP

LANDSTAR SYSTEM INC

TESORO PETROLEUM CORP

GEORGIA GULF CORP PERFORMANCE FOOD GROUP CO

UNIVERSAL FOREST PRODUCTS INC

TECH DATA CORP NATIONAL FUEL GAS CO The Fortune

QUINTILES TRANSNATIONAL CORP WATSCO INC

NASH FINCH CO PROVIDENT FINANCIAL GROUP INC OLD KENT FINANCIAL CORP

PINNACLE WEST CAPITAL CORP SILGAN HOLDINGS INC

CHAMPION ENTERPRISES INC

M&T CORP

GENERAL CABLE CORP NEW DEVON ENERGY CORP NEW JDS UNIPHASE CORP 1000 board of FAIRCHILD SEMICONDUCTOR INTL INC UNITED STATIONERS INC

SERVICE CORP INTERNATIONAL HUB GROUP INC PAYCHEX INC SIERRA PACIFIC RESOURCES GENESIS HEALTH VENTURES INC FOAMEX INTERNATIONAL INC RGS ENERGY GROUP INC PUGET ENERGY INC GREENPOINT FINANCIAL CORP PAYLESS CASHWAYS INC PHAR MOR INC PSS MEDICAL INC JABIL CIRCUIT INC UNIVERSAL CORP EMCOR GROUP INC PENTAIR INC VALERO ENERGY CORP NEW MICRON TECHNOLOGY INC

MITCHELL ENERGY & DEVELOPMENT CORP

ABERCROMBIE & FITCH CO DE MILACRON INC COVENTRY HEALTH CARE INC STEELCASE INC MASCO CORP KELLY SERVICES INC LANDAMERICA FINANCIAL GROUP INC GREAT LAKES CHEMICAL CORP TYSON FOODS INC PUBLIC SERVICE CO OF NEW directors MAXXAM INC ALTERA CORP MANPOWER INC

MICROAGE INC SPARTAN STORES INC TELEPHONE & DATA SYSTEMS INC DE WHX CORP

DEL WEBB CORP WHOLE FOODS MARKET INC INTERSTATE BAKERIES CORP ALLIANT ENERGY CORP DIEBOLD INC PERKINELMER INC

LAM RESEARCH CORP HARTFORD GROUP I LEAR CORP PATHMARK STORES INC MARSHALL & ILSLEY CORP CO INTERNATIONAL MULTIFOODS CORP POLARIS INDUSTRIES INC CYPRESS SEMICONDUCTOR CORP EMC CORP TELLABS INC QUANTA SERVICES INC WESTERN DIGITAL CORP BORDERS GROUP INC MI NIAGARA MOHAWK HOLDINGS INC FURNITURE BRANDS INTERNATIONAL INC MARK IV INDUSTRIES INC ADMINISTAFF INC VECTREN CORP FLOWSERVE CORP BROADWING INC CARDINAL HEALTH INC E W SCRIPPS CO OH WILLAMETTE INDUSTRIES INC WHIRLPOOL CORP MERISEL INC DTE ENERGY CO MOHAWK INDUSTRIES INC SMURFIT STONE CONTAINER CORP AMERICAN ELECTRIC POWER CO INC HEILIG MEYERS CO INC

LSI LOGIC CORP HEALTH NET INC TERADYNE INC WESCO INTERNATIONAL INC SUPERVALU INC WORLDCOM INC NEW REYNOLDS & REYNOLDS JACOBSCO ENGINEERING GROUP INC FOOTSTAR INC UNIFI INC QWEST COMMUNICATIONS INTERNATIONAL network, 2001 AGCO CORP DE MANDALAY RESORT GROUP STANDARD REGISTER CO RITE AID CORP ANIXTER INTERNATIONAL INC PRINCIPAL FINANCIAL GROUP INC DOLLAR GENERAL CORP GALILEO INTERNATIONAL INC AMERICAN AXLE & MANUFACTURING HLDGS MCN ENERGY GROUP INC CALPINE CORP SMITHFIELD FOODS INC IMATION CORP VOLT INFORMATION SCIENCES INC FMC CORP CABLEVISION SYSTEMS CORP NEW DQE OCCIDENTAL PETROLEUM CORP MELLON FINANCIAL CORP LINENS N THINGS INC UNITED AUTO GROUP INC STATE STREET CORP AK STEEL HOLDING CORP A O SMITH CORP VALSPAR CORP LIZ CLAIBORNE INC ALBERTSON S INC RYLAND GROUP INC HEALTHSOUTH CORP ITT INDUSTRIES INC OSHKOSH TRUCK CORP HUMANA INC LENNOX INTERNATIONAL INC MCCORMICK & CO INC LA Z BOY INC BANTA CORP QUESTAR CORP INC HILLENBRAND INDUSTRIES INC NAVISTAR INTERNATIONAL CORP STARWOOD HOTELS & RESORTSPPG WORLDWIDE INDUSTRIES INC SUNGARD DATA SYSTEMS INC TRIGON HEALTHCARE INC WGL HOLDINGS INC NSTAR MOLEX INC STATER BROS HOLDINGS INC HALLIBURTON CO 3COM CORP DELPHI AUTOMOTIVE SYSTEMS CORP SEALED AIR CORPAMGEN NEW INC ENCOMPASS SERVICES CORP TECO ENERGY INC R R DONNELLEY & SONS CO IMS HEALTH INC J B HUNT TRANSPORT SERVICESRELIANT INC ENERGY INC WELLS FARGO & CO NEW WELLPOINT HEALTH NETWORKS INC NEW DEL MONTE FOODS CO AVNET INC READER S DIGEST ASSOCIATION INC

KINDRED HEALTHCARE INC PREMCOR USA INC SAFECO CORP FIFTH THIRD BANCORP HARRAH S ENTERTAINMENT INC CLAYTON HOMES INC LYONDELL CHEMICAL CO HUBBELLCOLLINS INC & AIKMAN CORP NEW ADVANTICA RESTAURANT GROUP INC OXFORD HEALTH PLANS INC INC ON SEMICONDUCTOR CORP COMERICA INC DEERE & CO JO ANN STORES INC WILLIAMS COMPANIESEASTMAN INC CHEMICAL CO CORP NEW FEDERAL MOGUL CORP MAYTAG CORP GREY GLOBAL GROUP INC CINERGY CORP WALLACE COMPUTER SERVICES INC EQUITABLE RESOURCES INC JOY GLOBAL INC CMS ENERGY CORP AMERICAN HOME PRODUCTS CORP COMMERCIAL METALS CO CBRL GROUP INC POLAROID CORP GENTIVA HEALTH SERVICES INC USFREIGHTWAYS CORP CORNING INC NORDSTROM INC ALLMERICA FINANCIAL CORP SCI SYSTEMS INC NCR CORP BAKER HUGHES INC CORP SEQUA CORP NEIMAN MARCUS GROUP INC TIMKEN CO JP Morgan Chase KLA TENCOR CORP POLO RALPH LAUREN CORP UAL CORP UTILICORP UNITED INC MODIS PROFESSIONAL SERVICES INC BIG LOTS INC RAYTHEON CO NEW MONY GROUP INC PITNEY BOWES INC TRANS WORLD AIRLINES INC BRIGGS & STRATTON CORP MERITOR AUTOMOTIVE INC NEWPORT NEWS SHIPBUILDING INC BANK ONE CORP GRAND UNION CO CRANE CO SHERWIN WILLIAMS CO UNUMPROVIDENT CORP DOW CHEMICAL CO CABOT CORP FIRST TENNESSEE NATIONAL CORP UNOCAL CORP ABBOTT LABORATORIES CONSTELLATION ENERGY GROUP INC AMERISOURCE HEALTH CORP ALLIED WASTE INDUSTRIES INC WALGREEN CO FINOVA GROUP INC JOHNSON CONTROLSSPRINT INC CORP UNITED RENTALS INC NEW RUSSELL CORP CAMPBELL SOUP CO KELLWOOD CO H & R BLOCK INC INC WISCONSIN ENERGY CORP NEW YORK TIMES CO HERSHEY FOODS CORP PHARMACIA CORP DE TRIBUNE CO SERVICE MERCHANDISE CO INC RYERSON TULL INC NEW AIR PRODUCTS & CHEMICALS INC CINTAS CORP INGRAM MICRO INC WALTER INDUSTRIES INC SAKS INC TEKTRONIX INC INC ILLINOIS TOOL WORKS INC AETNA INC PA HERMAN MILLER INC PACIFIC CORP TRICON GLOBAL RESTAURANTS INC IBP INC EXXON MOBIL CORP WAL MART STORES INC RADIOSHACK CORP TENNECO AUTOMOTIVE INC SOLUTIA INC DOW JONES & CO INC CLEAR CHANNEL COMMUNICATIONS INC IMC GLOBAL INC FOODS CORP NORTHERN TRUST CORP CADENCE DESIGN SYSTEMS INC UNIVERSAL HEALTH SERVICES INC ALCOA INC NEWMONT MINING CORPHOME DEPOT INC BRIGHTPOINT INC AT&T CORP CONVERGYS CORP JOHN HANCOCK FINANCIAL SERVICES INC BRM HOLDINGS INC KOHL S CORP LIMITED INC UNITED TECHNOLOGIES CORP LEHMAN BROTHERS HOLDINGS INC TARGET CORP AMERICAN STANDARD COS INC CVS CORP UGI CORP PA AES CORP E I DU PONT DE NEMOURS & CO USEC INC STAPLES INC HOUSEHOLD INTERNATIONALCSX CORP INC PUBLIC SERVICE ENTERPRISE GROUP INC PEPSI BOTTLING GROUP INC CUMMINS INC PFIZER INC LEXMARK INTERNATIONAL INC THOMAS & BETTS CORP INTERNATIONAL FLAVORS & FRAGRANCES THERMO ELECTRON CORP CONTINENTAL AIRLINES INC FLEETBOSTON FINANCIAL CORP GPU INC COUNTRYWIDE CREDIT INDUSTRIES INC CORP SNAP ON INC CDI CORP CHUBB CORP TECUMSEH PRODUCTS CO WEYERHAEUSER CO ARMSTRONG WORLD INDUSTRIES INC USG CORP PHILIP MORRIS COS INC EMERSON ELECTRIC CO CORP TEXTRON INC KMART CORP AUTOLIV INC PEPSIAMERICAS INC NEW CONEXANT SYSTEMS INC VIACOM INC PETSMART INC TEMPLE INLAND INC HARMAN INTERNATIONAL INDUSTRIES INC CITIGROUP INC HONEYWELL INTERNATIONAL INC FEDERATED DEPARTMENT STORES INC NEW XEROX CORP SERVICEMASTER CO PNC FINANCIAL SERVICES GROUP INC J C PENNEY CO INC DANA CORP GENERAL ELECTRIC CO OHIO CASUALTY CORP STANLEY WORKS HARCOURT GENERAL INC PHELPS DODGE CORP STANCORP FINANCIAL GROUP INC WASHINGTON MUTUAL INC MICROSOFT CORP ASHLAND INC AUTOZONE INC ALLSTATE CORP STORAGE TECHNOLOGY CORP QUEST DIAGNOSTICS INC LEGGETT & PLATT INC ZIONS BANCORPORATION MDU RESOURCES GROUP INC EASTMAN KODAK CO SUMMIT BANCORP NJ CORP SHOPKO STORES INC KB HOME PEPSICO INC W R GRACE & CO NEW MINING & MANUFACTURING CO V F CORP HARLEY DAVIDSON INC ST PAUL COS INC ARROW ELECTRONICS INC DYNCORP INTERNATIONAL PAPER CO AON CORP BAXTER INTERNATIONAL INC ROHM & HAAS CO DPL INC TRANSMONTAIGNE INC W R BERKLEY CORP SEARS ROEBUCK & CO FEDEX CORP OWENS ILLINOIS INC MOTOROLA INC GOLDMAN SACHS GROUP INC POTOMAC ELECTRIC POWER CO KELLOGG CO NEWELL RUBBERMAID INC MARRIOTT INTERNATIONAL INC NEW GANNETTSCIENCE CO INC APPLICATIONS INTERNATIONAL BOSTON SCIENTIFIC CORP UNION CARBIDE CORP NEW PACKAGING CORP OF AMERICA ESTEE LAUDER COS INC DUKE ENERGY CORP OWENS & MINOR INC NEW WALT DISNEY CO NEW J P MORGAN CHASE & CO CIRCUIT CITY STORES INC POPULAR INC CORP NEW AMPHENOL CORP U S BANCORP DE MEAD CORP MGM MIRAGE PRAXAIR INC PACTIV CORPORACLE CORP DE JOHNSON & JOHNSON CORP CLOROX CO TEXACO INC SARA LEE CORP UNITEDHEALTH GROUP INC REVLON INC COMMUNITY HEALTH SYSTEMS INC AMSOUTH BANCORPORATION AVON PRODUCTS INC W W GRAINGER INC UNITRIN INC AMERICA WEST HOLDINGS CORP STRYKER CORP WASTE MANAGEMENT INC NEW MCDONALD S CORP EOG RESOURCES INC KINDER MORGAN INC NEW HAWAIIAN ELECTRIC INDUSTRIES INC FORD MOTOR CO QUAKER OATS CO TRANSOCEAN SEDCO FOREX INC DARDEN RESTAURANTS INC INTERNATIONAL BUSINESS MACHINES COR VERIZON COMMUNICATIONSFOOT INC LOCKER INC D & K HEALTHCARE RESOURCES INC MBNA CORP SAFEGUARD SCIENTIFICS INC CONOCO INC CATERPILLAR INC INC SYSCO CORP MORGAN STANLEY DEAN WITTER & CO NATIONAL SERVICE INDUSTRIES INC PROCTER & GAMBLE CO WARNACO GROUP INC WM WRIGLEY JR CO DELL COMPUTER CORP MATTEL INC LUBRIZOL CORP SUNOCO INC POLYONE CORP COOPER INDUSTRIES INC COAMERICAN INTERNATIONAL GROUP INC WESTPOINT STEVENS INC INC TELEFLEX INC HCA INC NEW BANK OF NEW YORKKIMBERLY CO INC CLARK CORP GEORGIA PACIFIC CORP INGERSOLL RAND CO BERGEN BRUNSWIG CORP BRISTOL MYERS SQUIBB CO GENERAL DYNAMICS CORP SAFEWAY INC DOMINION RESOURCES INC VA MCLEODUSA INC USA EDUCATION INC WESTVACO CORP REEBOK INTERNATIONAL LTD GOODYEAR TIRE & RUBBER CO FEDERAL HOME LOAN MORTGAGE CORP SCIENTIFIC ATLANTA INC EATON CORP SBC COMMUNICATIONS INC LUCENT TECHNOLOGIES INC CIGNA CORP CH2M HILL COMPANIES LTD AMERADA HESS CORP WYNDHAM INTERNATIONAL INC HASBRO INC KNIGHT RIDDER INC GATX CORP NOBLE AFFILIATES INC CORP VIASYSTEMS GROUP INC PACCAR INC AMR CORP AMERICAN WATER WORKS CO INC TRIAD HOSPITALS INC CSK AUTO CORP CHARLES SCHWAB CORP RYDER SYSTEM INC PG&E CORP OWENS CORNING BOISE CASCADE CORP DYNEGY INC IL BURLINGTONPARKER NORTHERN HANNIFIN SANTA CORP FE CORPGOODRICH CORPUNION PACIFIC CORP DIAL CORP NEW DIME BANCORP INC BLACK & DECKER CORP WACHOVIA CORP NEW COX COMMUNICATIONS INC DE KROGER CO MAY DEPARTMENT STORES CO BMC SOFTWARE INC TEXAS INSTRUMENTS INC BECTON DICKINSON & CO MERCK & CO INC CO INC BELO CORP CENDANT CORP FLOWERS FOODS INC EQUIFAX INC VULCAN MATERIALS CO US AIRWAYS GROUP INC AMEREN CORP LANIER WORLDWIDE INC BELLSOUTH CORP LINCOLN NATIONAL CORP TIFFANY & CO ADOLPH COORS CO FLUOR CORP NEW FRONTIER OIL CORP WY TRINITY INDUSTRIES INC HARRIS CORP FLA OGE ENERGY CORP IT GROUP INC WASHINGTON POST CO PRIMEDIA INC MANNY MOE & JACK BRUNSWICK CORP BAUSCH & LOMB INC CIT GROUP INC INTERPUBLIC GROUP OF COS INC CORP NATIONAL CITY CORP COCA COLA CO FPL GROUP INC DELTA AIR LINES INCAOL TIME WARNER INC MANOR CARE INC NEW BORDEN INC KERR MCGEE CORP ROADWAY CORP ANHEUSER BUSCH COS INC SPORTS AUTHORITY INC NORFOLK SOUTHERN CORP AUTOMATIC DATAFLEMING PROCESSING COS INC INC PROVIDIAN FINANCIAL CORP PITTSTON CO MARSH & MCLENNAN COS INC DUN & BRADSTREET CORP DE NEW ENGELHARD CORP WINN DIXIE STORES INC UNOVA INC JONES APPAREL GROUP INC LONGS DRUG STORES CORP EDISON INTERNATIONAL DOVER CORP KEYCORP OHIO MCKESSON CORP DE BANK OF AMERICA CORPCOLGATE PALMOLIVE CO EL PASO CORP NACCO INDUSTRIES INC COMFORT SYSTEMS USA INC STILWELL FINANCIAL INC SUNTRUST BANKS INC NORTHROP GRUMMAN CORP NEW AMERICAN GREETINGS CORP NICOR INC QUORUM HEALTH GROUP INC GENTEK INC COCA COLA ENTERPRISES INC TRW INC TJX COS INC OMNICOM GROUP INC DIMON INC BOEING CO KEYSPAN CORP RALSTON PURINA CO LEGG MASON INC SOUTHERN CO CENTEX CORP AUTONATION INC DE ANNTAYLOR STORES CORP AMES DEPT STORES INC LOWE S COS INC SCHERING PLOUGH CORP MERRILL LYNCH & CO INC YELLOW CORP ENTERGY CORP DE APPLE COMPUTER INC PROGRESSIVE CORP PAYLESS SHOESOURCE INC NEW LITTON INDUSTRIES INC BEAR STEARNS COS INC SONOCO PRODUCTS CO PRICELINE COM INC ANALOG DEVICES INC ENTERASYS NETWORKS INC APPLERA CORP NORTHWEST AIRLINES CORP NEW PROGRESS ENERGY INC DEAN FOODS CO TRUE NORTH COMMUNICATIONS INC GRANITE CONSTRUCTION INC METRIS COS INC USA NETWORKS INC SEMPRA ENERGY ENRON CORP OR LOCKHEED MARTIN CORP BRINKER INTERNATIONAL INC BETHLEHEM STEEL CORP PHILLIPS PETROLEUM CO RELIANCEGILLETTE GROUP COHOLDINGS INC FIRSTENERGY CORP LTV CORP SUN MICROSYSTEMS INC ENERGIZER HOLDINGS INC COMPUTER SCIENCES CORP ALLERGAN INC TXU CORP VIAD CORP GENUINE PARTS CO AMAZON COM INC OFFICE DEPOT INC INTERNATIONAL INC CHEVRONTEXACO CORP METALS USA INC UNITED PARCEL SERVICE INC

CISCO SYSTEMS INC CONSOLIDATED EDISON INC GAP INC ELI LILLY & CO COMPAQ COMPUTER CORP SYNOVUS FINANCIAL CORP PETER KIEWIT SONS INC NEW LOEWS CORP NISOURCE INC REPUBLIC SERVICES INC WEATHERFORD INTERNATIONAL INC NEW SODEXHO MARRIOTT SERVICES INC CONAGRA FOODS INC TORCHMARK CORP WACKENHUT CORP CB RICHARD ELLIS SERVICES INC RAYONIER INCNIKE INC TRANS WORLD ENTERTAINMENT CORP ALLTEL CORP AMERICAN GENERAL CORP URS CORP YORK INTERNATIONAL CORP ULTRAMAR DIAMOND SHAMROCK CORP GOLDEN STATE BANCORP INC BROWN SHOE CO INC HON INDUSTRIES INC INTEL CORP FIRST DATA CORP CHARTER ONE FINANCIAL INC BURLINGTON INDUSTRIES INC ELECTRONIC ARTS INC CORN PRODUCTS INTERNATIONAL INC PHILLIPS VAN HEUSEN CORP BEVERLY ENTERPRISES INC NEW IKON OFFICE SOLUTIONS INC PENNZOIL QUAKER STATE CO HILTON HOTELS CORP FERRO CORP ARCHER DANIELS MIDLAND CO CARLISLE COMPANIES INC OAKWOOD HOMES CORP AMERICAN FINANCIAL GROUP INC NEW APPLIED INDUSTRIAL TECHNOLOGIES INC BORGWARNER INC EXPRESS SCRIPTS INC CONSECO INC CONSOLIDATED FREIGHTWAYS CORP AVERY DENNISON CORP FIRST AMERICAN CORP BECKMAN COULTER INC PRECISION CASTPARTS CORP RPM INC RUDDICK CORP BALL CORP IMPERIAL SUGAR CO TX R J REYNOLDS TOBACCO HOLDINGS INC BERKSHIRE HATHAWAY INC NEW DOLLAR TREE STORES INC AMERICAN MANAGEMENTNEXTEL SYSTEMS COMMUNICATIONS INC INC NEW TOYS R US INC NEW COOPER TIRE & RUBBER CO CAREMARK RX INC DST SYSTEMS INC BANKNORTH GROUP INC ME AFLAC INC ANADARKO PETROLEUM CORP PROTECTIVE LIFE CORP NUCOR CORP ROCK TENN CO UST INC CHIQUITA BRANDS INTERNATIONAL INC GROUP 1 AUTOMOTIVE INC FREEPORT MCMORAN COPPER & GOLD INC MILLENNIUM CHEMICALS INC COMDISCO INC BURLINGTON RESOURCES INC ADELPHIA COMMUNICATIONS CORP L 3 COMMUNICATIONS HOLDINGS INC OFFICEMAX INC NORTHWESTERN CORP LABORATORY CORP OF AMERICAE TRADE HOLDINGS GROUP INC

BROWN FORMAN CORP PARK PLACE ENTERTAINMENT CORP FRANKLIN RESOURCES INC WENDY S INTERNATIONAL INC TENET HEALTHCARE CORP DELUXE CORP

STANDARD PACIFIC CORP CRESTLINE CAPITAL CORP HEWLETT PACKARD CO CHARTER COMMUNICATIONS INC DE BOWATER INC BELK INC

ZALE CORP JEFFERSON PILOT CORP HEALTH MANAGEMENT ASSOCIATES INC PENN TRAFFIC CO QUALCOMM INC APPLIED MATERIALS INC PIER 1 IMPORTS INC

JACK IN THE BOX INC DE ASTORIA FINANCIAL CORP CKE RESTAURANTS INC FLEETWOOD ENTERPRISES INC CROWN CORK & SEAL CO INC SCANA CORP Bank of America FIDELITY NATIONAL FINANCIAL INC DANAHER CORP

EXIDE TECHNOLOGIES GUIDANT CORP HOUSE2HOME INC WILLIAMS SONOMA INC BARNES & NOBLE INC WABASH NATIONAL CORP

ADC TELECOMMUNICATIONS INC HARSCO CORP TEREX CORP MARTIN MARIETTA MATERIALS INC DOLE FOOD CO INC Citigroup SOLECTRON CORP BJ S WHOLESALE CLUB INC LANDS END INC APACHE CORP COMPUTER ASSOCIATES INTERNATIONAL I

WORTHINGTON INDUSTRIES INC CNF INC NORTHEAST UTILITIES COSTCO WHOLESALE CORP DE HUGHES SUPPLY INC CAPITAL ONE FINANCIAL CORP TEXAS INDUSTRIES INC CDW COMPUTER CENTERS INC PIONEER STANDARD ELECTRONICS INC COMPUWARE CORP

PACIFICARE HEALTH SYSTEMS INC NEW TOWER AUTOMOTIVE INC SYMBOL TECHNOLOGIES INC

FISERV INC MICHAELS STORES INC

RENT A CENTER INC NEW PEOPLES ENERGY CORP

SOUTHWEST AIRLINES CO DILLARD S INC AMKOR TECHNOLOGY INC SPHERION CORP

BANK UNITED CORP PPL CORP

DURA AUTOMOTIVE SYSTEMS INC

SPX CORP

SEABOARD CORP

EXPEDITORS INTERNATIONAL OF WASH IN

MASTEC INC MAXTOR CORP

POTLATCH CORP

NABORS INDUSTRIES INC

BJ SERVICES CO

COOPER CAMERON CORP 23 24 JP Morgan Chase board, 2001 Who were the top 5 inner circle directors in 2001?

Source: Forbes (2002) 25

By 2011, only one director served on 5+ boards in the S&P 500, and the “inner circle” was now called “overworked directors”

4. Corporations aim to grow bigger in assets and number of employees

27 28 Increased ownership by institutions has corresponded …and an orientation to share price has induced to increased devotion to “shareholder value”… massive restructuring favoring the “Nike model”

“We exist to create value for our share owners on a long-term basis by building a business that “Wall Street can wipe you out. They are the enhances The Coca-Cola Company's rule-setters. They do have their fads, but to a trademarks.” large extent there is an evolution in how they judge companies, and they have decided to “Sara Lee Corporation's mission is to build give premiums to companies that harbor the leadership brands in consumer packaged goods most profits for the least assets.” markets around the world. Our primary purpose is John Bryan, CEO, explaining Sara Lee’s to create long-term stockholder value.” “de-verticalization” program

29 30

Corporation ≠ organization: no fixed boundaries

Vizio now has the largest market The US economy is at an advanced share of LCD televisions in the stage of Nike-fication US (22%)—with 196 employees

31 32 Corporation ≠ organization: no fixed identity Corporation ≠ organization: no fixed nationality

Poisonous pet chow containing melamine from China was made by an Ontario-based manufacturer but sold under dozens of different US brand names. The global OEM model is not just for Nike anymore.

33 34

Spinoffs, layoffs, and outsourcing have shrunk the Corporation ≠ organization: no employees largest US corporations

% employed by top 25 firms 10

“Hermit crab 9 organizations” maintain the 8 brand but lose the people 7

(e.g., Circuit 6 City’s 43,000 employees) 5

4

3

Source: Bureau of Labor Statistics; Compustat Annual Industrials 35 36 About those dominant corporations…

Allied Chemical Eastman Kodak Owens-Illinois Glass Alcoa Exxon Procter & Gamble American Can GE Sears Roebuck AT&T General Foods Swift & Co 5. Corporations live a long time American Tobacco GM Texaco Anaconda Copper Goodyear Union Carbide Bethlehem Steel International Harvester United Technologies Chevron International Nickel U.S. Steel Chrysler International Paper Westinghouse Electric Du Pont Johns-Manville Woolworth

= gone by 2009 = really “SBC”

37

Some premises of the corporate-centered society

1. The typical corporation makes tangible products 2. Corporate ownership is broadly dispersed 3. Corporate control is concentrated 4. Corporations aim to grow bigger in assets and number of employees 5. Corporations live a long time

39 40 As a result, the number of public corporations in the US The “going public” fad of the 1990s is long gone has dropped by over half since 1997

IPOs per year in the US 800

700

600

500

400

300

200

100

0

Source: Jay Ritter, University of Florida Source: World Bank World Development Indicators 2011

41 42

And the companies going public today ignore basic Told you so standards of corporate governance

“It may be an exaggeration to call this the death rattle of the public corporation in the US. Yet it is certainly striking that these newly-public companies are listing on markets not because they need funds to buy factories and expand their business, but because they need to satisfy their early and employees who want to cash out, and/or to have a currency with which to make acquisitions. It is understandable why the founders want to sell; far less obvious is why any long-term would ever want to buy.” --Me, April 20, 2012

43 44 Shareholder capitalism no longer works for shareholders How-to guide for an instant startup, ca. 2012

• Product: iPhone “remote drone assassin”

• Target market: neo- firms S&P 500

Jan. 3, 2000: $1,469.25 Yesterday: $1,418.16

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1. Rent a desk in a shared office 2. Incorporate online in Liberia for $713.50 3. Crowdsource the funding at Kickstarter 4. Hire programmers for the app at oDesk

5. Find a Chinese drone vendor at Alibaba.com 6. Set up a payment system at Squareup 7. Get it shipped from the dock to our customers The story so far:

The public corporation in the US is now unnecessary for production, unsuited for stable employment and the provision of social welfare services, and incapable of providing a reliable long-term return on investment

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Some principles for social organization

1. The size and location of the institution should match the size of the project – Risk sharing (income and health security, climate remediation, defense) => big and centralized – Daily life (jobs and production) => small and local 2. Form follows function NOW WHAT? AN INVENTORY – Formal organizations need not be the default 3. The constraint of carbon emissions implies a preference for local whenever possible 4. Local control is preferable to central control, but lateral connections to the rest of the globe are useful

55 56 Dramatically cheaper capital goods enable Possible paths going forward locavore production. (Take that, Braverman)

• Dystopian cyber-Fordism: the global online assembly line (brought to you by Amazon’s Mturk™) • Utopian locavore wiki-everything in which one is a genetic engineer in the morning, an urban fish farmer in the afternoon, and a mash-up DJ in the evening

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3D printing and the Web enable insta-replication of …whose designs can be shared and modified globally physical objects…

59 60 A local fabrication shop in every neighborhood? The “maker movement” is emerging in surprising places (like Detroit)…

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…and in surprising industries (like biotech) Um…….

63 64 The US has a large set of non-corporate forms that are Cooperatives have found a new life…in Cleveland not all run by hippies

• Producer co-operatives

• Consumer co-operatives

• Mutuals

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New legal forms add to the mix of possibilities Collaborative consumption apps are widespread

67 68 How about “open source institutional design for Ubiquitous ICTs enable large-scale collective action economic democracy”? (e.g., “The World Says No to War”)

Up to 10 million citizens on every continent (including Antarctica) marched in protest on the same day (2/15/03) against the imminent US invasion of Iraq

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Or “The world says no to the Komen Foundation”?

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