Wednesday, May 25, 2005
"Big bucks bucking big biz"
Star op-ed columnist Dan Carpenter writes in today's Indianapolis Star:
So who is John Harrington anyway, and where does he get off trying to tell one of Indiana's largest companies how to run its business in China?
Cummins brass gave assurance they're working on a code of proper conduct for Chinese enterprises with which they deal. Meanwhile, shareholders, as expected, voted down an 11-point human rights initiative based on a United Nations model.
That proposal came from Harrington Investments Inc. of Napa, Calif., which earned the forum by purchasing about 5,000 shares of Cummins stock.
Harrington doesn't think they're bad guys at Cummins. In fact, if Cummins dealt in, say, child labor, union-busting or tobacco, there would be no buy-in and lobbying to begin with.
Harrington, founded in 1982, is one of the granddaddies of the socially responsible investment movement, and the 59-year-old father of the firm still keeps the fires burning behind his genial manner.
"I think I've turned more radical," John Harrington said in a phone interview. "As things have changed, they have not changed that much. Instead of staying on top of corporate conduct, too many in my industry are just passive screeners."
In other words, image-savvy companies can stay on the good side of the $2 trillion conscientious-investment community by pledging enlightened labor practices and environmental concern. But are they ultimately good for you, me and our neighbor in that New Delhi factory? In Harrington's view, less and less.
"We have moved away from what I consider to be a free market. What we have now is what I call oligopolistic capitalism. We have moved away from local communities to global enterprises with very little substance at the local level.
"In your sector (news media), very, very few players dominate the market. Wal-Mart is not a competitive enterprise. It is a dominant enterprise. This is not good. We need diversity."
Diversity and diversification. Handling more than $140 million in assets despite refusal to invest in defense (it deems the Iraq war illegal and immoral) and World Bank bonds (in protest of the bank's policies toward poor countries), Harrington Investments validates the leader's belief "a lot of people want to do more than make money for making money's sake."
But executives, at Cummins and elsewhere, still run the show, Harrington notes; and he sees too many with too little interest in principle -- even though "in the long run doing the right thing will enhance shareholder value and protect the company."
As a counselor, lecturer, shareholder and author (his new book is "The Challenge To Power: Money, Investing and Democracy" from Capital H Press), he'll keep sending the message. But he understands how Cassandra of ancient Troy felt.
"I'm not sure I'm very optimistic about global corporate enterprise. Corporations have more power than governments. We've lost our sovereignty, or nearly lost it. They're almost impossible to control. That's what I talk about in my book, how they play states and nations off against each other. This is a monster that may devour us."
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