Richard Telofski

on "Irregular Competition"

Posts Tagged NGO

NGO Social Media: Some Weakness in “Reach”

Feb 4

Posted by Richard in Friends of the Earth, Greenpeace, Irregular Competition, Research, Strategy | No Comments

Introduction

Social media is an environment that is seemingly tailor-made for NGOs and activists to exploit. Among other characteristics, social media are accessible to almost everyone in the developed world. Social media are pervasive; more and more people use social media every day. Social media are inexpensive. And social media skew young.

Businessman reading newspapBecause of these factors, economically, demographically, and psycho-graphically, social media are perfectly positioned for NGOs to leverage in their campaigns against business. Because of these reasons, and because NGOs are among the chief anti-corporate campaigners out there, companies want to know more about what these atypical competitors, these “irregular competitors,” are doing from within social media.

Today, I am going to give those corporations a “mini-heads-up” and give a little bit of insight as to what two NGOs are up to in social media. This heads-up will be limited to the examination of “reach.” The NGOs examined will be:

  • Greenpeace US
  • Friends of the Earth US (FOE)

I’ve chosen to examine these two NGOs for six reasons.

  1. They’re both about the same age, and therefore have the same opportunity at notoriety, and reach.
  2. They’re among the largest of the tens of thousands of NGOs on the planet.
  3. Because of their size, these NGOs would tend to have the most potential for influence on the companies they target.
  4. These two are among the most active of all NGOs in terms of anti-corporate activism.
  5. In an effort to compare “apples to apples,” I chose these NGOs because they operate within similar issue arenas, such as the environment; their Venn diagrams of issues coverage overlap, not completely but highly.
  6. Again with attention to an “apple to apple” comparison, both NGO operations cover the same geography. Each NGO has an international organization, but in this article I will only be looking at their U.S. operation.

Factors

Reach is significant in social media. Yes, I know that some of my social media colleagues don’t regard “reach” as important in social media as it is in traditional media. But I submit that reach is very important, especially so in a medium that is perfectly positioned for NGO goals, as noted above.

One of the elements which produces the social media”reach” of an organization is its size. The bigger the organization then the more well-known will be its brand. And the more well-known its brand, then the more followers, friends, fans, and/or subscribers that brand should have in social media. The more followers, friends, fans, and/or subscribers had by that brand, then the more opportunities for the brand’s message there are to be transmitted and discussed and forwarded and discussed again and back and forth and so on. Social media is a medium of discussion and “pass along.” So, if the originator of a message, like Greenpeace US or FOE US, has more followers, friends, etc., than a similar organization, well, then there are simply more opportunities for message propagation not only at origin, but also further down the chain of the social web.

So, let’s go ahead and do a bit of analysis on the social media reach of these two NGOs.

Findings

Below you’ll see a table which details, for each NGO, the number of Facebook fans, the number of Twitter followers, the number of MySpace fans each has, along with similar statistics for each NGO’s YouTube presence.

NGO Social Media “Reach” Comparisons
FacebookTwitterMySpaceYouTube SubscribersYouTube FriendsYouTube Channel Views
Greenpeace USA41,58214,850123,5951,8511,00566,372
FOE US11,6153,10314,67672283,102

As of January 14, 2010

Discussion

You can see that Greenpeace has FOE beat hands down, across all categories. This could be a function of Greenpeace being a more established organization, with a brand that is a global icon. People like to follow the leader, and they’ll do so in social media as in any other aspect of life.

The number that particularly stands out in the table above is that MySpace friends number. Since MySpace is a site heavily trafficked by music lovers, this differential would indicate that Greenpeace has some particular strength with music fans. That’s something for corporations in the crosshairs of Greenpeace to keep in mind, i.e., targeting (or not) the music lover segment in future PR battles. But there’s a big disconnect between that MySpace fan number and that Twitter number. The Greenpeace twitter number is only a bit over 10% of their MySpace number. I think they’re missing something there. Greenpeace could be leveraging that MySpace following into their Twitter effort and using it for effect in various campaigns. And the same idea could be applied to Facebook. With only about a third of the following on Facebook as they have on MySpace, Greenpeace doesn’t seem to be doing much in the way of cross-pollination. This lack of cross-pollination should be something kept in mind by targeted corporate communications personnel. Now, let’s chat about FOE.

What I find especially disappointing in these FOE numbers is the level of Twitter followers that FOE has. I have more Twitter followers than that. They simply aren’t leveraging their Facebook and MySpace presences to increase their level of Twitter followers which, if FOE had more Twitter followers, could make it easier and more effective for them to spread quick, mini-blog type messages during hot and fluid campaigns. And speaking about their Facebook and MySpace followings, for an organization the size of FOE US, those following levels are terrible. Numbers of that level indicate that FOE isn’t doing an adequate job in developing their social media campaigns. Perhaps FOE isn’t taking social media seriously? Something else for targeted corporate communications personnel to keep in mind.

What about the FOE YouTube numbers? Well, it seems abundantly clear, about 20 times more clear, that Greenpeace is giving viewers a lot more to look at than is FOE. Perhaps FOE isn’t as visually oriented as Greenpeace. Again, you corporate communications managers take note.

So, what can we conclude from all of this?

Conclusion

The take-away, for corporate opponents of these “irregular competitors,” is that between Greenpeace US and FOE US, in social media Greenpeace would be a more formidable foe than would FOE itself. In social media, by comparison, FOE isn’t much of a foe. With such low numbers, for corporations in a social media PR battle with FOE US, corporations should concentrate very heavily on creating, discussing, and propagating their message in social media. FOE has a relatively underrepresented presence there, and any corporation locking horns with FOE US should take advantage of FOE US’s relative absence and comparative disengagement with the medium.

For corporations with high Twitter follower numbers, they should especially concentrate in that mini-blogging venue, both preemptively and reactively. It’s apparent that FOE US doesn’t realize their weakness there in that social venue. And any corporation that has ever been engaged in a “battle” with FOE US, or anticipates one in the future, should act now to build their following in Twitter, so that FOE may be “out-Twittered” if and when the time comes.

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NGO & Corporate Collaboration: How Far Does It Go?

Feb 2

Posted by Richard in Activism, NGOs, Trends | No Comments

In the field of issues management, it’s common knowledge that some corporations now “partner” with NGOs on various issues of “social concern.” That term “social concern” is often one that is defined by the NGO, rather than the corporation, by the way. So now, instead of an NGO and a corporation fighting tooth and nail over an environmental issue, for example, they work together toward a “common goal.” Okay. That seems all warm and fuzzy, on the surface. But let’s dig a little deeper into the nature of this “partnership.”

Yellow Pay SignIn a situation like this, what’s that “common goal?” For the NGO, the goal would be the achievement of, perhaps, a social agenda objective that they have pursued for years, often via an adversarial relationship with the corporation. For the corporation, what’s the goal? What motivates the corporation to take on such a “strange bedfellows” relationship? Well, as a recent article in the Christian Science Monitor commented, corporations often approach NGOs to partner on a common project so that those same NGOs don’t turn around in the future and spread bad press about the corporation. A “common goal?” Seems more like a protection racket.

Imagine this scenario. Corporation X is concerned that future bad press could negatively impact their expected future revenues. So, to preclude the threat of negative press, an implicit threat at least, the brass at X dial up their historical foes at NGO Z and play let’s make a deal. The brass over at Z aren’t going to say, “Hey X, thanks for calling, but no thanks.” No. Z’s ship just came in. The pressure that the folks at NGO Z have been applying to Corporation X all of these years has just paid off.

Didn’t I see a scene something like this in at least one episode of The Sopranos?

Now, when the NGOs and the corporations get together like this, at least according to the previously mentioned Christian Science Monitor article, no money changes hands. The article stated that the NGO doesn’t receive any fees from the corporate partner. But isn’t there an exchange of value here? Isn’t this somewhat like a scene from The Sopranos? Let’s look at it this way.

The Sopranos Example – Paulie, grey slicked-back side wings and all, goes into a shop and “tells” the proprietor that the shop could “have some trouble” in the future. This “implicit threat” means that the shopkeeper might lose some of his or her “expected future revenues.” But, Paulie and his problem-resolution specialists can “protect” the shop and make that trouble “disappear,” for some consideration of course. In this Sopranos example, that consideration is money.

Paulie and his problem-resolution specialists get what they were looking for, i.e., they reach their direct objective. The shopkeeper avoids that “implicit threat” and gets to keep his or her future revenue stream.

The NGO Z/Corporation X Collaboration Example – The presence of NGO Z represents an “implicit threat” to Corporation X, the threat of future negative publicity. Corporation Z recognizes that this “trouble” is possible. The presence of this “implicit threat” means that Corporation X might lose some of their “expected future revenues.” But, the problem-resolution specialists of Corporation X realize they can “protect” the corporation and make that problem “disappear,” for some consideration exchanged of course. In this NGO Z/Corporation X example that consideration is collaborating with NGO Z to allow NGO Z to achieve one of their social agenda objectives.

The Corporation Z problem-resolution specialists get what they were looking for, i.e., they get to keep their future revenue stream. NGO Z gets what they were looking for, i.e., they achieve their direct objective of “social concern,” which, of course, is defined by them.

Weird, isn’t it?

And once this “partnership” is established, where is the line drawn? How far does this relationship go?

In The Sopranos Example, Paulie keeps returning to the shopkeeper saying there are always “other” troubles on the horizon and that an increased payment is needed to keep those troubles away.

In The NGO Z/Corporation X Collaboration Example, the management of Corporation X realizes that there is always the possibility that NGO Z could spread bad press, regardless of how much or how well they work together on any selected project. What happens after that project is complete? Corporation X knows that NGO Z will always have “other” future projects of “social concern” on their horizon.

Are these NGO/corporate collaborations a good way to run a company?

How far does it go?

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Greenpeace CEO Makes “More” Than Exxon CEO?

Jan 19

Posted by Richard in Compensation, Greenpeace, Irregular Competition, Research | No Comments

Money in till 1Does the Greenpeace CEO make more than the Exxon Mobil CEO?

Well, yes and no. In terms of absolute dollars, no. Not even close. But, in terms of a percentage of their respective organization’s revenue, yes. More. Very much more.

In terms of compensation as a percentage of revenue, the Greenpeace CEO pulls in considerably more than does his counterpart at Exxon Mobil.

Recently I performed research addressing this issue. The reason I performed this research was due to activist’s and NGO’s frequent claims that CEOs of multinational corporations (MNCs) take as compensation an unfair proportion of their companies’ overall revenue. After recently hearing this claim again, perhaps for about the 500th time, I wondered, “Who actually makes more in terms of percentage of revenue? Huge multinationals? Or NGOs?” I decided to do some digging, create a comparison, and take a look.

Methodology

Now, to address this question, what I decided to do was just take a “quick and dirty” look. I just wanted to test my theory with some trial research. Therefore, at the outset my intention was not to do an exhaustive study by including a large number of NGOs and MNCs in a representative and statistically controlled sample. When I began this research I decided that I would save that exhaustive study for another occasion should my theory be supported by the results of this “thumbnail” research project.

To commence my pilot research project, I simply selected, very much at random, one NGO and one multinational. The first two of each that came to mind were Greenpeace and Exxon Mobil. These two organizations are often at odds with each other and both are frequently in the news, making them top of mind.

To identify the revenues of Greenpeace I went to Guidestar.org. Guidestar is an organization which aggregates information about non-profit corporations. At their site, you may search for your non-profit of interest and find information you desire, much of it a no charge. One of the pieces of information stored by Guidestar is a non-profit’s US IRS Form 990.

The IRS Form 990 is a document that must be filed by all tax-exempt non-profit organizations operating within the United States. This document is much like a tax return and contains some information similar to what you would find in a for-profit corporation’s annual report or 10K filing. Among the information shown in a Form 990 is annual revenues and executive compensation. On the Guidestar site, I located Greenpeace’s Forms 990.

To obtain the revenue and executive compensation information for Exxon Mobil, I journeyed to SEC.gov, the site of the Securities and Exchange Commission for the United States. At that site, I accessed Exxon Mobil’s Schedule 14A Proxy Statement which contained summary compensation figures for Exxon Mobil executives for the years 2006 – 2008. Also available on that site was the Exxon Mobil 10K, containing the annual revenue figures that I sought. Additional information on Exxon Mobil’s revenue was obtained from their 2008 Annual Report available at ExxonMobil.com.

All information for this research comparison was obtained from US Government documents, or from an annual report, and is therefore considered to be highly reliable. The latest information that could be located for both Greenpeace and Exxon Mobil was from 2008. The 2009 figures were not as yet ready as of the date of this post.

Following is a summary of the information that I obtained from the sources.

Findings
2007 Revenue2007 Compensation2008 Revenue2008 Compensation
Greenpeace, Inc.$19.5 million$126,573$26.3 million$103,624
Greenpeace Fund, Inc.$39.6 million$42,191$9 million$103,624
SubTotals$59.1 million$168,764$35.3 million$207,248
Compensation Percentage0.28%0.587%
Exxon Mobil Corporation$405 billion$16.7 million$477 billion$22.4 million
Compensation Percentage0.00412%0.00469%

Upon visiting Guidestar.org, I found that there are two significant Greenpeace organizations. One is the primary campaign organization, Greenpeace, Inc., and the other is a financial arm, Greenpeace Fund, Inc. When I examined the Forms 990 for both organizations, I found that the same person is the Executive Director for both entities and that that person collects a salary from both organizations. So, that is why in the table above you see two Greenpeace lines.

You can see that for the chief of the Greenpeace corporations his compensation for 2007 totals $168,764 and for 2008 the total is $207,248. You can also see that his total compensation for 2007 represented 0.28% of the joint organizations’ total revenue ($168,764/$59.1 million) and that for 2008 that percentage of revenues increased to 0.587% ($207,248/$35.3 million).

In comparison for the chief of Exxon Mobil, although he pulled down a hefty $16.7 million in 2007 and $22.4 million in 2008, his compensation as a percentage of revenue for 2007 and 2008 was 0.00412% ($16.7 million/$405 billion) and 0.00469% ($22.4 million/$477 billion), respectively.

Discussion

Of course, these two chiefs are not in same compensation range, and I have no doubt that because of their different levels of compensation the types of neighborhoods in which they dwell are probably very much different. Yet there are at a minimum two important take-aways to be had from this pilot study.

Take Away One: The first take-away to be noted is consistent with my thesis, that this data indicates that perhaps NGO chiefs take as compensation a higher percentage of their organization’s revenue. In this comparison, for 2008 the compensation as a percentage of revenue is about 125 times greater for the Greenpeace chief as compared to his Exxon Mobile counterpart. That’s quite a differential.

At least in this case of Greenpeace vs. Exxon Mobil, we can see that my thesis might be true, or at a minimum is well-supported. And yes, this is only one case comparison which as such it is not scientific and may or may not be representative of the greater NGO community, but I noted that research limitation at the top of this post.

However, if the Greenpeace and Exxon Mobil comparison could be used as representative, we would say that NGOs and activist organizations are hypocritical when they accuse MNC chiefs of receiving as compensation an “unfair” proportion of their company’s revenues. In order to make that a convincing argument to be applied across the NGO spectrum, more research would be needed in this area. This Greenpeace and Exxon Mobil sample comparison indicates that such research may prove very interesting, indeed.

Take Away Twoo: Note that for 2008, the Greenpeace chief saw a nice increase of about 23%, during a year when many people saw a decrease of 100% by hitting the ranks of the unemployed. And this 23% increase was during a year when for Greenpeace total revenue declined by about 40%. This Greenpeace compensation increase is, of course, much less than the Exxon Mobil chief’s increase of about 34%. But, for 2008, revenue at Exxon Mobil increased by about 17%. For Exxon Mobil, a legitimate argument can be made that the compensation increase is tied to performance. Can Greenpeace make that same argument? How does Greenpeace justify an increase of 23% for their chief when their revenues decreased by 40%?

There are critics who blast the financial industry for rewarding its executives with compensation increases in companies which underperform the previous fiscal year. Doesn’t this Greenpeace example speak to the same type of criticism? And if so, why is it that we do not hear in the mainstream media these kinds of disparagements applied to NGOs as well as MNCs?

Conclusion

This pilot research has shown that there is reason to believe that NGOs and other activist organizations do pay their executives a higher percentage of revenues than is paid by the corporations that they combat in the environmental, social, and cultural arenas. The test research performed here indicates that further research should be done in this area.

The outcome of more a more statistically reliable enquiry could be used as the basis of counterstrategy against claims by NGOs and activists that executives at MNCs are “greedy” and take more than their “fair share” of revenues. Such a counterstrategy element would perhaps go far in overcoming these corporate image-damaging claims in the eyes of the marketplace.

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The Marketplace Is Not Stupid

Jan 14

Posted by Richard in Activism, Friends of the Earth, Irregular Competition, Rainforest Action Network, Trends | No Comments

From much of my reading, I can see that the power of the NGO (non-governmental organization) is increasing. With regard to how that power affects business, my research shows that over the past decade NGO-influenced corporations are now becoming the norm rather than the exception. And from the projections I’ve read, it appears that that influence will only become greater over the next decade.

Silver pound coinsTo go along to get along with this trend, multi-national corporations (MNCs) are moving, seemingly together as if in lock step, to establish corporate social responsibility (CSR) programs in order to meet the demands and expectations of NGOs, whether it be on environmental, social, labor, or cultural issues. And to help them craft their CSRs, MNCs now regularly collaborate with NGOs, bringing NGOs to the table as trusted advisors and de facto consultants. And when MNCs do this, which is increasingly often, they seem to do it with a “mea culpa” attitude.

Mea culpa attitudes belong only on the truly guilty. MNCs don’t give themselves enough credit. They suffer from a poor self-image. Paraphrasing Jessica Rabbit, “MNCs aren’t ‘bad.’ They’re just drawn that way.” Their “We’re so guilty” attitude is unjustified. MNCs should not sit themselves in a corner.

Yes, it’s true that MNCs are guilty of doing some “bad” things. Aren’t you? MNCs are operated by humans. Imperfect humans who make mistakes. But I fear their mea culpa is overdone because most, if not all, MNCs indeed do more “good” than “bad.” One doesn’t need to perform extensive quantitative analysis to realize this.

If the MNCs were not doing more good than bad, then such behavior would be obvious to the marketplace, which is not stupid contrary to the belief of many activists. The marketplace is not stupid. We can use the activist’s own thought process to address this issue. Ask any activist how “stupid” the marketplace was in electing Barack Obama to the White House and the majority response will prove this point. So, if the “bad acts” of any MNC outweighed the “good acts” performed to support the economy and society, then the marketplace would know that; the people would “vote” with their dollars, numbering the days of any wayward MNC.

Given this automatic economic voting mechanism, where “election day” for the MNC is every day, is the current and projected level of NGO influence upon MNCs really justified? Which party receives more legitimization?

Yes, MNCs make mistakes. I accentuated the obvious above. MNCs are operated by humans. But so are NGOs. NGOs are run by humans, imperfect humans. NGOs, as well-intentioned as most probably are, are not exempt from making mistakes, and performing “bad acts,” whether by accident, or by intention, or by just plain ignorance. But how is the influence of these imperfect organizations counter-balanced? Unlike MNCs, NGOs are not subject to the same automatic regulatory mechanism of the “vote.” NGOs are not subject to the same daily “election day” as are the MNCs. The motivations and the acts of the NGO are not examined and evaluated with the same frequency as are those of the MNC. Neither are the acts of the NGO supported with the same number of votes from the public.

For example, according to their IRS Form 990, a publicly-available document filed by all non-profit organizations operating within the United States, for the fiscal year ending in 2008 both the Rainforest Action Network (RAN) and the Friends of the Earth (FOE), two of the most powerful environmental advocacy groups in the world (read that as NGOs), received less than $5 million each in revenue, i.e., fewer than 5 million votes of support. Each. (You may see these documents by going to Guidestar.org and searching on each NGO.) You can plainly see how this vote tally would compare to the annual vote tally of any MNC with which any NGO might collaborate or against which any NGO might compete.

Yet, the MNCs embrace these largely uncontrolled NGOs. NGOs. Organizations who do their best to compete daily for the image of the corporations they target (Note: I deal with this concept of corporate image competition in my newest and forthcoming book, Insidious Competition – The Battle for Meaning and the Corporate Image. Due out Spring 2010). Organizations who by the number of votes collected possess far less legitimatization than do the MNCs who do their best to incorporate NGO agendas. Organizations who pride themselves on “democratic” principles and acting for the “public good.”

Show me the votes. Show me the democracy. Without legitimization, how do these collaborations make sense?

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“Irregular Competition” – The Newest Threat

Dec 15

Posted by Richard in Anti-Corporatism, Irregular Competition | No Comments

abstract fiveCompetition comes in several classes. Let’ discuss.

First of all, you, as a business person, have obviously known about the class of “direct” competitors since you went into business, and probably you have known about this class of competitor as far back as those tender years when you were first able to sit up and recognize for what money was actually used. Direct competitors, of course, are those other companies which sell the same products or services that your own company sells.

Secondly, you’ve most likely known about the class of “indirect” competitors, also just about as long as you’ve known for what money is used. When you were a kid with five bucks burning a hole in your pocket, you knew that you could use that moolah to buy a toy or you could use it to buy a movie ticket or you could use it to buy an ice cream cone. None of the companies which produced those goods or that service were direct competitors, but they were indirect competitors vying for that five bucks in your pocket.

The classes of direct and indirect competition are not new. Business people have always taken seriously the impact of direct and even indirect competition, and have planned and altered their business models accordingly. This is well-known.

“Irregular Competition” Introduced

But what perhaps isn’t as well-known to you is the class of competition which I have named “irregular competition.” That is a term I coin and a concept which I define and introduce to you today.

When your direct and indirect competitors bring their offerings to market, they tell that market just how great are their offerings and how well those offerings can meet the needs and wants of the market targeted. And while making their sales pitch, those direct and indirect competitors play with the image of your company. Your competitors, direct and indirect alike, will take every opportunity to portray your company image in a manner that would not please you and by doing so communicate to your common market how well your products or services do not meet the needs of those consumers that you jointly serve.

Either through comparative advertising, or through innuendo, or via some other communications mechanism, your direct or indirect competition promotes the image of their own company and demotes the image of your company. Again, this is well-known. So if it’s well-known, why am I writing about it?

I write about this in order to make a point about competition in general, either direct or indirect, and to tie that point into the less well-known concept of “irregular competition.” Competition is not just about promoting competing products or services. It’s also about demoting, about tearing down, tearing down the image of the competitor. To tear down the image of a competitor means to battle for what the competitor’s company or brand image means, and to achieve an agendized goal in the process.

In the case of your direct and indirect competition, that agendized goal is to sell more products or services than does your company. The irregular competitor is similar in this regard; they have an agenda and a goal. But in the case of the irregular competitor, the nature of their agenda is different. The irregular competitor is not selling products or services. The irregular competitor wants to promote an advocacy agenda at the expense of your company. The irregular competitor wants to promote a program which has as its goal the attainment of some political, social, or cultural change. And one way the irregular competitor achieves its goal is by altering the meaning of your company or brand image in the marketplace.

The irregular competitor which I introduce today is more specifically known as the activist organization, the NGO (non-governmental organization), or the IGO (inter-governmental organization) which pursues an agenda of advocacy for a political, social, or cultural issue and in so doing competes with your company for the meaning of your brand or company image.

Why Would They Do This?

This irregular competition does this because they recognize that by attempting to influence, or even control, what your company or brand image means, the irregular competitor can use the notoriety of that image to achieve publicity and legitimacy for the cause that they pursue.

The irregular competitor is not interested in selling their own products or services that will replace those of your company’s in the marketplace. But they are interested in reducing the sale of your products or services, just as are your traditional direct or indirect competitors, in order to pressure your company into helping them achieve their political, social, or cultural goals.

Just As Much a Threat as the Regular Competitor

And because of their agenda and its intent, this irregular competition is no less a threat to your company than the direct or indirect competitor. Indeed, in many ways irregular competition may be more of a threat than the direct and indirect competitor. Therefore, the irregular competitor must be regarded with as much seriousness as the regular competitor.

The irregular competitor is here. They are not going away. They must be dealt with just as any other competitive threat should not be ignored. And it is within this blog, Telofski.com, that we will discuss the ins and outs of dealing with this new competitive threat in your business environment.

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Activism: Harm to the Body Politic?

Nov 6

Posted by Richard in Activism, Anti-Corporatism, NGOs, Tactics | No Comments

In their battle against business, one tactic of activists is to challenge the legal parameters within which corporations operate.

In reading about this tactical approach, I came across an article entitled “Paradigm Shift: Challenging Corporate Authority” and written by Paul Cienfuegos. This article appears in a book entitled The Global Activist’s Manual, edited by Mike Prokosch and Laura Raymond. On the first page of the article, author Paul discusses how early Americans, unlike modern Americans, understood that a corporation was an artificial entity, one created by law and people. He states that in 1834 the Pennsylvania legislature declared a corporation as a “creature of the law” and that it should be shaped “for any purpose that the Legislature may deem most conducive to the common good.”

This position encompasses very astute insights by Paul. He makes the distinction between a corporation and a human. The former being manmade, while the latter being a creation of the Almighty. The corporation being manmade should then be responsible to those who created it, which he equates with the people of the state where the corporation was formed. Excellent point.

Paul continues, “People understood that they had a civic responsibility not to create artificial entities that could harm the body politic, interfere with the mechanisms of self-governance, and assault their sovereignty.” Again, all excellent points which I take as Paul saying that the corporation should be responsive to the people who, through their state legislature, created the corporation. Sound reasoning and the basis of a tactic which can be used in the never-ending battle between activists and business corporations.

Activists would adopt this tactic and take it into the legal arena when battling business corporations. The activists’ tactic would be to force the legislatures to make business corporations more responsive to the people, who created the corporation in the first place. Yes, again sound reasoning and brilliant thinking.

But brilliance can cut both ways and payback is always a bitch.

Businesses are not the only organizations that are formed under state corporation law. NGO and activist organizations are also formed under the corporate statutes of a state. Can anyone reasonably, semantically, and validly state that NGO and activist corporations do not “harm the body politic” or “interfere with the mechanisms of self-governance” or assault the sovereignty of the people?

Tactics can be turned around.

Tactics can be turned around.

NGOs and activist corporations benefit from the limited liability protection of state corporation laws. The people of the state have afforded those organizations that privilege. In return the people of a state should expect that their interests should be represented as the “common good.” But no one elects NGOs or activists to act in the peoples’ interest. NGO and activist corporations decide on their own what the “common good” should be. Through the non-democratic processes under which NGO and activist corporations operate, these organizations by definition “harm the body politic,” and “interfere with the mechanisms of self-governance,” and assault the sovereignty of the people.

When pursuing or recommending a tactic, perhaps its best to assess how it can be used against one’s own position.

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Free Food is Next on the NGO Agenda

Nov 3

Posted by Richard in NGOs, Trends | No Comments

Remember back in the 1990s, when Hillary-Care was being bandied about as a program to provide free medical care for all Americans. During that debate I thought it was only a matter of time until someone went further and started pushing, seriously, for a program advocating free food for all. Perhaps we’ve reached that point.

Natural Light Collection uiPer an article at GlobalGovernanceWatch.org, the Food and Agricultural Organization of the United Nations recently produced a five volume guide entitled the Methodological Toolbox on the Right to Food, the contents of which are very interesting. Let’s discuss how the implementation of this publication’s call-to-action could lead to free food and, with it, economic instability in the food industry and perhaps social uncertainty.

The article on the Global Governance Watch site states that, since the United Nation’s founding in 1948, it has been a goal of the UN that individuals worldwide have the right to an adequate standard of living. In the United States, we call this the “pursuit of happiness.” Global Governance Watch (GGW) also says that in 1999, the United Nations clarified this position with General Comment 12 of the UN’s International Covenant on Economic, Social and Cultural Rights:

. . . the right to adequate food is realized when every man, woman and child, alone or in community with others, has the physical and economic access at all times to adequate food or means for its procurement.

As I interpret this quote, its key idea is that governments create an environment where individuals have economic access to food or access to its means of procurement. Very reasonable. In simplified terms, we can call that access a politically-supported environment where those who want a job can have a job so that they can economically access and procure, i.e., buy, food. Again, you have the right to the pursuit of happiness. I support that wholeheartedly.

But GGW reports that in 2005, the game began to change at the United Nations because in that year the General Assembly passed a resolution calling:

upon States to implement legal and political strategies to ensure that the right to food was not compromised.

Hmm.  That’s a bit of a shift in thinking, isn’t it?

GGW says that for the UN to give “traction” to General Comment 12 and the 2005 resolution, the UN produced the aforementioned Methodological Toolbox on the Right to Food. The Toolbox was recently published (October 23, 2009) and in its website article about the Toolbox, GGW calls specific attention to the first of the five Toolbox volumes. The first volume is entitled “A Guide on Legislating for the Right to Food. In its synopsis of the Guide, GGW interprets the Guide as saying that:

. . . States must incorporate the right to food into national constitutions . . . (and) they must establish a “framework” law on the right to food, which sets out obligations for state authorities and private actors and establishes “necessary” institutional mechanisms to enforce right to food legislation and policies.

(The mention of States here is taken to be member states of the United Nations.)

Right now, I’ll make a very astute comment, one I’m sure is very often used within academic circles and by political consultants, as well.

“Are you kidding me?”

The United Nations wants to butt into our, the American, constitution to guarantee a right to food? And the UN wants to force the participation of “private actors,” let’s read that as companies, to participate in that right to food?

What appears to be happening here is that the United Nations wants us to recast that phrase, “the pursuit of happiness,” one so engrained in our national consciousness, into a new phrase, something like “the guarantee of happiness.”

Let’s put the national sovereignty issues aside. I’ll leave those to the political scientists to hash out. Right here in this blog, I deal with business issues and how they are affected by social trends and particularly by activists and NGOs. NGOs like the UN. And one of those business issues is that it should be clear to anyone with at least a basic understanding of economics, capitalist economics that is, that a free food policy could be disastrous.

If food companies are forced to participate in a “right to food” rather than a “right to economic access,” serious repercussions will be felt within that industry, compromising the food supply for all. Such actions, although very charitable and humanitarian in their intent, would actually be counterproductive. Here’s the scenario.

Let’s say there is a legal demand on food companies to make a portion of their production available at no charge. If food companies must provide a significant portion of their output for free, doing so will force prices to rise on the food for which the companies will be remunerated. The result of this scenario would be that there would be less food consumed.

The decrease in food consumption would begin with paying customers on the lower end of the income scale. As food prices rise, to cover production and distribution of the food for which the company receives no compensation, lower income consumers would not be able to absorb the increases. They would buy less food, and indeed most likely join the ranks of individuals receiving the free food, thereby increasing the proportion of the market which receives the free food. This increase in free food recipients would raise food prices further.

Spiraling increases of food prices would occur, with the paying market segment becoming smaller and smaller and, accordingly, profits becoming smaller and smaller or non-existent. At some point the food company would decide to exit the progressively unprofitable market or go bankrupt. The exit of the food company would necessitate other food companies to feed the defunct company’s non-paying consumers, for free of course, and the cycle would repeat. Food companies would fall progressively, like dominos.

And as the food companies fall, unless supported by government subsidies which presents different economic problems, “food fights” may begin. Not fights with food. Fights for food.

No. Although this idea the UN has might seem like an altruistically good idea, in practicality the concept of free food, like free health care, only brings negative results and exacerbates the problem it was intended to solve in the first place.

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