Corporations Are More Powerful Than Governments
Eric Schlosser notes in his book Fast Food Nation, “The McDonald’s Corporation has become a powerful symbol of America’s service economy, which is now responsible for 90 percent of the country’s new jobs.” Each year McDonald’s hires about one million people, more than any other American organization, public or private. An estimated one out of every eight workers in the United States has been employed by the fast-food franchiser at some point. McDonald’s is the largest owner of retail property in the world, and now feeds a record twenty-seven million Americans every day—forty-seven million globally. Numbers aside, McDonald’s has also become the new civic hub in many communities, hosting fundraisers, sponsoring sports teams, providing scholarships, building parks, and even offering kid-friendly workout facilities.
The sheer economic power of corporations highlights their influence today. Indeed, fifty-one of the world’s one hundred largest “economies” are now corporations. Case in point: in 2007, Finland’s budget was about 40 billion euros, 20 percent less than Nokia’s annual sales. Corporations are making more, spending more, and employing more of the world’s resources than ever before. In the United States alone, total revenues for the Fortune 500 in 2005 hit $9.1 trillion, which is 73 percent of U.S. GDP. Al Gore put it this way: “More money is allocated by markets around the world in one hour than by all the governments on the planet in a full year.”
Because of trends like these, business now plays a significantly larger role in our daily lives than does government; that also means companies are better positioned than federal and local governments to understand and address consumers’ needs in a variety of areas. And we fully expect them to. The public is increasingly looking to corporations to solve social problems: 89 percent of consumers believe that corporate obligations to shareholders must be balanced by contributions to the broader public good—for example, providing good jobs, making philanthropic donations, and going beyond legal requirements to minimize pollution and other negative effects of business activities. Corporate managers have heard the message: six out of ten executives believe that the public expects companies to take just as much responsibility as governments do for handling social issues.
Corporations and for-profit social enterprises are responding to this call to action, and quickly. In many ways, business is moving faster than government to solve social problems. Look at the Chicago Climate Exchange. Well before the U.S. government got its act together on a cap-and-trade system, corporations banded together to create a voluntary marketplace for self-imposed carbon emissions. Companies like Walmart and WellPoint, the nation’s largest health insurer, have been reducing the number of U.S. uninsured faster and cheaper than the U.S. government by using business innovations. The MTV cable network was better able to raise awareness and increase prevention of human trafficking in Asia and the Pacific than any government agency—reaching 380 million households through its MTV EXIT documentary. These trends are likely to amplify, as corporations continue to get bigger, move faster, and connect more closely to our everyday lives.