According to House Speaker John Boehner, “job-killing regulations… are strangling employers all over the country” and contributing to the nation’s persistently high rates of unemployment. Last month, President Obama reinforced this theme by asking the Environmental Protection Agency to back off more stringent ozone regulations, citing the “importance of reducing regulatory burdens” during trying economic times. In recent weeks, several independent observers have examined this charge in order to assess the evidence on the impact of health, environmental and other regulations on employment.
Writing for Pro Publica, Marian Wang interviewed several economists who have studied the issue and concluded that “the evidence so far is that the overall effect on jobs is minimal. Regulations do destroy some jobs, but they also create others. Mostly, they just shift jobs within the economy.” Wang also cites a recent Bureau of Labor Statistics survey that shows that in the first half of 2011, employers attribute regulations as the cause of 0.2 to 0.3 percent of jobs lost as part of mass layoffs, a negligible fraction.
Supporters of regulations that protect public health offer two responses to the charges of job loss. First, they say, many regulations simply shift jobs from one sector to another, sometimes actually increasing employment opportunities. For example, the requirement to clean up contaminated brownfields, abandoned toxic waste dumps in populated areas, created thousands of new jobs in environmental remediation. Thus, any assessment of the impact of regulations on employment must examine both jobs lost and jobs created. To look at only one side of the equation is like saying in the early twentieth century the auto industry killed jobs by putting carriage drivers out of business.
The second defense of regulations is that they achieve social benefits – improved health, for example, or reductions in premature mortality, that outweigh their costs. In a recent op-ed column describing opponents of public health regulation, veteran consumer activists Ralph Nader noted, “These same Republicans get in their cars with their children and put on their seat belts. Out of sight are the air bags ready to deprive them of their freedom to go through the windshield in a crash.” Nader went on to observe, “The jobs these regulations may be ‘killing’ are those that would have swelled the funeral industry, or some jobs in the healthcare and disability-care industry. On the other hand, by not being injured, workers stay on the job and do not drain the workers’ compensation funds or hamper the operations of their employers.”
Earlier this month, Public Citizen issued a report about five regulations that spurred innovation and a higher quality of economic growth. The report noted that ‘when federal agencies implement rules for efficiency, worker safety, or public health and welfare, companies need to reformulate their products and services to comply. And so begins good ol’ American competition. To comply with federal standards, companies need to invest in research and development, which often yields to new products and systems that both solve public policy problems and, often, boost business. The result? A brighter idea emerges.
The bottom line: an honest assessment of regulations requires a comprehensive look at their benefits and costs. As Roger Noll, co-director of the Program on Regulatory Policy at the Stanford Institute for Economic Policy Research, told Wang, “The issue in regulation always should be whether it delivers benefits that justify the cost. The effect of regulation on jobs has nothing to do with the mess we’re in. The current rhetoric about regulation killing jobs is nothing more than not letting a good crisis go to waste.”
National media attention on the Occupy Wall Street demonstrations in New York City and around the country provides new opportunities for public health professionals, researchers and activists concerned about the impact of corporations on health. In this post, I summarize some recent commentary on the health dimensions of Occupy Wall Street and invite Corporations and Health Watch readers to contribute suggestions for linking the demonstrations to public health concerns.
In a statement entitled “Declaration of the Occupation of New York City,” the General Assembly of Occupy Wall Street proclaimed:
“As we gather together in solidarity to express a feeling of mass injustice, we must not lose sight of what brought us together. We write so that all people who feel wronged by the corporate forces of the world can know that we are your allies. As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments. We have peaceably assembled here, as is our right, to let these facts be known…
They have poisoned the food supply through negligence, and undermined the farming system through monopolization. They have profited off of the torture, confinement, and cruel treatment of countless animals, and actively hide these practices.
They have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions… They have spent millions of dollars on legal teams that look for ways to get them out of contracts in regards to health insurance.
They have sold our privacy as a commodity… They have deliberately declined to recall faulty products endangering lives in pursuit of profit… They continue to block generic forms of medicine that could save people’s lives or provide relief in order to protect investments that have already turned a substantial profit.”
Writing for the Center for Public Integrity’s IWatchNews, Wendell Potter observed:
“The lobbyists for U.S. health insurers surely have to be feeling a little uneasy knowing that thousands of Occupy Wall Street demonstrators who have been marching and protesting in Washington as well as New York and other cities might target them in the days ahead. After all, the headquarters of the insurers’ biggest lobbying and PR group, America’s Health Insurance Plans (AHIP), at 601 Pennsylvania Avenue, N.W., is just blocks away from Freedom Plaza, where the demonstrators have set up camp, and problems with health insurers appear to be near the top of the list of protesters’ concerns.
Health Care for America Now, an umbrella advocacy group that played a key role in the health care reform debate, last week analyzed the 546 comments that had been posted by then on “ We are the 99 percent” Tumblr site. It found that 262 of the comments mention such problems as getting denials for doctor-ordered care from their insurance companies and having to forego treatment because of hefty out-of-pocket costs.”
Writing for the Mother Nature Network, Russell McLendon points out the environmental concerns of OWS:
“Fresh off their own nonviolent stand outside the White House — where they spent two weeks protesting the proposed Keystone XL oil pipeline — the re-energized U.S. environmental movement has now found an even bigger, broader stage. And like most factions of Occupy Wall Street, it seems perfectly happy to share that stage with other interests.
For too long, Wall Street has been occupying the offices of our government, and the cloakrooms of our legislatures,’ wrote Bill McKibben, co-founder of 350.org, in an email to supporters before the march. ‘They’ve been a constant presence, rewarded not with pepper spray in the face but with yet more loopholes and tax breaks and subsidies and contracts. You could even say Wall Street’s been occupying our atmosphere, since any attempt to do anything about climate change always run afoul of the biggest corporations on the planet. So it’s a damned good thing the tables have turned.’”
These commentaries show some of the ways that Occupy Wall Street has raised the issue of the impact of corporate practices on wellbeing. We invite CHW readers to suggest additional connections between the demonstrations and public health concerns, to analyze OWS activities from a public health perspective or to share relevant observations on the demonstrations from others. Send responses to info@corporationsandhealth.org.
Increasingly corporations and their allies are using trade agreements as vehicles for achieving policy changes that even the most business-friendly legislatures would have trouble passing. A case in the point is the new Trans Pacific Partnership (TPP) currently being negotiated in Chicago with the goal of completing an agreement in time for an Asian-Pacific Economic Cooperation Meeting in Honolulu this November. The United States’ TPP partners are Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. These negotiations include agreements around tobacco, alcohol and pharmaceutical trade that could have a deep influence on public health. Public health advocates fear that the TPP might ask signatory nations to weaken existing public health protections.
US Trade Representative Ron Kirk
The Center for Policy Analysis on Trade and Health (CPATH), an organization that brings a public health voice to the debate on trade and sustainable development, has worked to mobilize various constituencies to speak out publicly against U.S. Trade Representative Ron Kirk’s proposals to increase the prices of medicines and to make tobacco products cheaper and easier to buy. They also call for greater public health representation and transparency in trade policy.
Several groups have joined this effort. For example, Dr. James Madara wrote to Kirk on behalf of the American Medical Association earlier this month, “The AMA strongly urges you to ensure that tobacco products and alcoholic beverages are excluded from all provisions of the TPP and any other trade agreements… Our request is consistent with longstanding AMA policy that ‘international trade agreements recognize that health and public health concerns take priority over commercial interest, and that trade negotiations be conducted in a transparent manner and with full attention to health concerns and participation by the public health community.’”
One issue of concern is tobacco giant Phillip Morris International’s (PMI) effort to use trade provisions to claim that graphic warning labels on cigarette packages (as mandated by several nations) violate trade agreements that protect the company’s trademark rights and related intellectual property rights. According to CPATH, the TPP could strengthen PMI’s hand. The tobacco and drug industries’ representatives are members of the influential and confidential trade advisory committees that guide the Trade Representative. Another concern is that trade agreements will increase the price of prescription drugs, as happened with the Central America Free Trade Agreement.
Some elected officials have also joined the fight against trade agreements that value business interests over health. Congressmen John Lewis, Pete Stark, Charles Rangel, Earl Blumenthal and Lloyd Doggett recently wrote Kirk noting that they expected an “improved public health standard” in the final TPP agreement.
As CPATH observed, “It’s time to put an end to trade agreements that make life-saving medicines too expensive, and deadly tobacco products too cheap. We call for a change of course to a new high performance trade policy that improves and protects health.”
As faculty and students return to the classroom after leaving their summer jobs, social action projects, vacation houses, beaches or research projects, Corporations and Health Watch examines how public health programs can integrate information on the impact of business practices on health into teaching, research and service.
While a growing body of evidence documents that the practices of the tobacco, alcohol, food, firearms, automobile, pharmaceutical and other industries have a profound impact on health, many public health, nursing and medical programs and courses continue to focus on how to improve public health by changing individuals, communities and governments, rather than businesses.
Faculty and students who want to broaden their understanding of the role of corporations and business practices can use the Corporations and Health Watch website to design teaching, learning, research and practice experiences. These can expand the repertoire of public health researchers and practitioners who seek to promote social justice by tackling the social determinants of health. Listed below are 10 actions that can help your public health, nursing or medical education program to address this neglected influence on population health, health inequalities and social determinants of health.
1. Develop a lecture on corporate practices for the public health core courses.
For documentaries and films to show in class visit here.
For tips on introducing corporate practices issues into public health core courses, visit here.
2. Assign students to monitor marketing, product design, or retail practices as well as lobbying, campaign contributions and sponsored scientific research of a specific industry for a semester and report on their findings to class.
Some useful resources: The Influence Explorer at the Sunlight Foundation
For a description of an undergraduate class project visit here.
For introductions to doing research on corporations visit here and here and here.
3. Develop and teach a new course on business practices and health.
4. Organize field placements at advocacy organizations that monitor corporate practices or organize advocacy campaigns to change alcohol, tobacco or food industry practices.
5. Organize an event on role of food industry on Food Day, a national event being led by Center for Science in the Public Interest.
6. Assign or write a research paper on the health impact of a product, practice or industry.
7. Organize a faculty seminar that includes researchers from public health, marketing, sociology, business, law and other disciplines to explore areas of common interest.
8. Organize a student group on campus to study and take action to reduce harmful business influences on health.
9. Offer to assist your local or state health department to conduct research on activities of alcohol, tobacco and food industries in your jurisdiction in order to inform public health activities to counter harmful practices of these industries.
10. Support or organize a student group to investigate business practice of campus food service, vending machine contractor or university endowment fund.
These are only a few ideas to get students and faculty started. Have an experience to share? Send it to us (info@corporationsandhealth.org) and subscribe to our free monthly e-newsletter. Image Credits:
In last week’s CHW commentary I asked, “Will the UN High Level Meeting on Non-Communicable Diseases Stand up to Multinational Corporations?” This week, I refer readers to several other recent analyses of the UN meeting scheduled for September 19th and 20th at the United Nations in New York City.
In a feature in last week’s British Medical Journal, Deborah Cohen investigates whether industry influence could derail the UN meeting. According to Cohen, who had access to the meeting’s draft document, “years of planning may be set to unravel. With only weeks to go before the summit, years of negotiations seem to be stalling.
“Discussions have stopped on the document that forms the spine of the summit, and charities are concerned that governments are trying to wriggle out of commitments.”
Cohen also notes that “ protection of financial interests” often blocks action to address the deeper determinants of NCDs. She describes a successful campaign by the European food industry to thwart a proposal before the European Parliament to create a traffic light labeling system for food products. Using the playbook written by the tobacco industry, food companies told members of the European Parliament that the any new regulations would lead to job losses.
Meanwhile, a statement released by the global advocacy group the Non-Communicable Disease Alliance, warned that “international progress on non-communicable diseases (NCDs) such as cancer, diabetes, cardiovascular disease and chronic respiratory disease, is at grave risk, because of recent efforts by some member states to postpone and weaken United Nations negotiations.” Apparently developed nations such as the US, UK and European Union states are unwilling to make financial commitments to reducing NCDs or to set measurable targets for reduction.
In another British Medical Journalanalysis on the upcoming NCD meeting, Dr. Derek Yach, a former executive director of WHO and now Senior Vice President of Global Health and Agricultural Policy at PepsiCo, asserts that the UN meeting is “a perfect forum to develop a set of actions aimed at redesigning the food system to make meeting the optimal nutrition needs of all its first priority.” He warns, however, that “prescriptions will succeed only when farmers, food and agricultural companies, non-governmental agencies, and parts of the UN that have yet to be engaged in the high level meeting are brought into the process.”
Just what role food and agricultural companies ought to play at the UN meeting and other public deliberations on NCD policy is the question of the day. A recent report released by the UK House of Lords Science and Technology Select Committee concluded that industry’s call for voluntary codes of conduct were unlikely to be effective in changing dietary behavior and that stronger regulations may increase rather than decrease consumer choices.
Another perspective on the role of industry appeared in a reviewon obesity policy published in last week’s theme issue of Lanceton the topic of obesity. The authors recognize the opportunities for leadership at the UN meeting but note that to date “the most powerful activities by the private sector relevant to public policy are undoubtedly lobbying activities, which often undermine policies aimed at reducing obesity—e.g., in relation to regulations on marketing to children, traffic light labelling, and taxes on unhealthy foods.”
While most of the recent focus of industry role in NCDs has been on food and beverage companies, other observers have noted the importance of the tobacco and pharmaceutical industries. In a recent commentary in the British Medical Journal, Simon Chapman, a tobacco researcher and director of Australia’s Action on Smoking and Health has urged the UN High Level meeting to reject the Big Pharma’s effort to medicalize tobacco cessation, urging that promoting unassisted tobacco cessation is a more realistic and effective strategy for most nations.
In later posts, I’ll examine the role industry representatives actually play at the upcoming UN meeting.
In 2009, there were 2,733 corporate foundations with assets of more than $10 billion and an annual donation of $2.5 billion. In that year foundations made grants of more than $38 billion of which $15.41 billion was from family foundations.In 2009, the 50 largest contributors to health donated more than $3 billion through almost 5,000 grants. The extent of corporate-based foundation funding in public health raises two critical questions for public health policy, research, and programming. First, should corporate-based foundations be setting the public health research and program agenda? Second, is the corporate business model appropriate for guiding foundation public health grants and programs?
In this commentary, I seek to answer these questions to focus our attention on fundamental philosophicaland ethical issues about the causes of disease and injury and the approaches we take to addressing the root, social determinants of health.
“There are a thousand hacking at the branches of evil to one who is striking at the root, and it may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve.” Thoreau, Walden
Foundation Funding
Mexican President Felipe Calderón Hinojosa meets with Bill Gates (to his right) and Carlos Slim(with blue tie), Mexico’s largest philanthropist, to discuss the launch of the Initiative for Health in Mesoamerica.
In 2009, there were 2,733 corporate foundations with assets of over $10 billion and an annual donation of $2.5 billion.[1] Foundations contribute substantial amounts of grant funding for a variety of purposes. In 2009 foundations made grants of over $38 billion of which $15.41 billion was from family foundations.[2] In 2009 the top 50 largest contributors to health donated more than $3 billion through almost 5,000 grants.[3]
Some foundations were established by funds coming primarily from an individual’s corporate ownership, income and stock, with much of the foundation’s continuing income derived from stock investments in corporations. For example, the Bill and Melinda Gates Foundation, based on Gates’ earnings from Microsoft and from Warrant Buffett’s donations from his finance industry earnings [4] with $37.1 billion assets in trust endowment, has made more than $25 billion in grant commitments since its founding in 1994, including about $14.5 billion to global health.[5] Other billionaires have also pledged their wealth to charity.[6] Here such foundations with largely corporate-derived funding will be referred to as “corporate-based.”
Foundations and the For-profit Corporate Business Model
The modus operandi of foundations has become that of applying a corporate, business model [7] to their efforts to try to solve public health problems (see table below). The business model typically emphasizes technological solutions to achieve quantifiable, quick, short-term “results” and “outcomes.”[8] The basic business model approach to problems is that technology plus science plus the market brings results. This model appears to dominate much of the foundation philanthropy, particularly among the so-called “philanthrocapitalists”[9] the corporate officers and financiers who made much their fortunes during the period of extreme capitalism of the 1980s and 1990s. Many of those individuals are now setting up foundations to distribute their wealth, some taking a venture capitalist, social investment approach.[10,11] These individuals typically retain funding decisions for themselves. They personally choose which public health issues will have highest priority, which areas of research to support and which programs will receive funds, including setting up entirely new programs under their direction. Similar to the corporate management from which they came, corporate-based philanthrocapitalist foundations are not democratically managed institutions. The philanthrocapitalist decision-making process suggests a belief that they are better qualified than public health professionals, professional associations, national governments, or community organizations to determine the public health agenda. They may form partnerships with other foundations, or corporations, or multi-lateral or national organizations but the funding and agenda are generally distanced from the level of local citizens of the community. And the size of the foundation funding gives disproportionate weight to the foundation’s influence, that is, the wealthy individual whose foundation it is.
The philanthrocapitalists’ application of the corporate model is understandable considering that many philanthropists, and the foundation boards and officers have backgrounds in the business world rather than public health or community organizations. Their associates in their education, business and social affairs are often like-minded individuals with a similar socioeconomic status who share belief in the primacy of the market and the for-profit corporate business model.[21] They hold the belief in common that the for-profit business model is the best way to meet societal goals.
Basic to a critique of contemporary philanthrocapitalism is the question of why should we hold up the business model as the standard to emulate in operating foundations and as the guide for the programs and research they fund?[22] Critics note that most businesses are mediocre, and many fail so why should the mediocrity of the business sector model be applied to the social sector?[23] The world is in greater need of more civil society influence than more business influence.[23] Also, inherent in corporate legal purpose is maximization of profit, including by avoiding taxation and minimizing regulation,[24] which often results in externalizing costs onto society through a variety of mechanisms.[25]
A Gates Foundation giveaway.
Approaching global health problems from the perspective of the corporate business model may lead philanthrocapitalist foundations to similarly ignore or to denigrate social and environmental factors as irrelevant to the foundation’s business-analogous, results orientation. Doing so may be a thoughtless imposition of the business model rather than a conscious awareness of other approaches and the model’s effects. A fundamental critique is that “marketized philanthropy” simply places a screen between global capitalism and its effects.[26] By fostering the global market system Philanthropcapitalists’ foundation agenda and activities may be similar to earlier foundations whose goals and programs supported the U.S. foreign policy agenda.[27] They may, without conscious intention, cause adverse effects on societies and the natural environment.
Critical Issues
Some defenders of philanthrocapitalism argue that the philanthrocapitalist earned his or her wealth and is therefore entitled to spend it in whatever manner they choose. That argument assumes that the individual accumulated wealth on his or her own rather than acknowledging that wealth arises from a “community.” Most business success draws upon the knowledge and technology developed earlier by others and is built upon the hard work of corporate employees who have not shared equitably in corporate profits.[28] The argument also fails to consider that many corporate products, services or technology are based on government-sponsored basic or applied research funded with tax-payer dollars, discoveries which the corporation did not purchase nor repay the government for.
The corporation from which the philanthrocapitalist’s foundation wealth was derived may not have paid the federal statutory income tax rate, [29,30] or state taxes, [31,32] and the tax rate paid may have included deductions for expenses related to morally or legally questionable management practices.[33] In addition, the philanthropocapitalist’s foundation may have set up her or his compensation in ways that avoid or minimize personal income tax, even if benefits are small.[4] Thus they accumulate wealth to fund a foundation whereby they control distribution of that wealth through the foundation. The foundation also receives tax benefits on investment returns and grants.
Some foundations’ earnings are from investments in the stock of corporations whose operations, products or services are contrary to the programs and priorities that the foundation funds, or to public health in general.[34,35,36,37] However, while some foundations screen investments for social responsibility and others retain a separation between investments and programs, some philanthrocapitalists take the position that one stockholder cannot change corporate practices [38] or they are unwilling to try to do so.[39] There also may be potential conflict of interests through interlocking foundation board membership with boards of corporations related to foundation programs and/or whose products or practices could be adverse to health.[40]
Bill Gates and Warren Buffet discuss philanthropy.
With some exceptions, foundations do not consider or fund programs for redistribution, social justice, power and politics (factors that drive social transformation) through independent groups that would change the socioeconomic-political system.[43]Historically such systemic change has been achieved through social movements, involving politics, government, civil society, and often resisted by business. Examples include the civil-rights movement, the women’s movement, and the environmental movement. Philanthropy is not a neutral, objective, apolitical process. By their nature foundations can only take actions that reinforce the corporatist financial system from which they arise and by which they thrive.[43] The personal philosophy, beliefs, and political positions of philanthropocapitalists’ influence their preferences for which type of programs or research to fund. Some funding of political positions by corporate-based foundations have generated controversy because their wealth affords them power and influence disproportionate to that of average income citizens, including access to policy-makers and influence on democratic processes.[44,31] Such access and influence may have been gained despite the philanthropocapitalist or the funding corporation not carrying their full share of financial responsibility.Historically, critics of early foundations (e.g., Carnegie, Rockfeller) raised questions about the corporate source of the philanthropist’s funds (e.g., monopoly, workplace conditions, political corruption), inequitable sharing of corporate earnings with workers, and the undemocratic manner in which decisions were made about how foundation funds were distributed.[41,33] A common argument about earlier foundations was that a society would have been better served if corporate profits would have been shared rather than accumulated in a foundation to be distributed solely at the discretion of the corporation’s owner (foundation director). Similar questions could be raised about contemporary philanthrocapitalists’ foundations.[42]
The funding for foundations may have resulted from the philanthropocapitalist having paid a lower tax rate than is paid by less wealthy tax-payers. They may have also benefited from a lower long-term capital gains tax, and from their corporations that either paid a lower income tax rate than the federal statutory rate or paid no income tax, that paid minimum wage or opposed unionization of workers in order to lower wages and reduce benefit costs. Consequently some critics question why we would allow people who avoid paying taxes to be called “philanthropists” because they set up a foundation or contribute money to the arts, universities, religions, or health (the most common recipient of donations). Critics ask why would we allow billionaires to play a larger and larger role in determining social policy without any input from the rest of us? The influence of philanthropcapitalists’ money may have double influence on society and specifically, on public health. First, through the corporate source of foundation funds where the corporation may have “bought” political influence through contributions to candidates’ election campaigns, and through lobbying which may have led to laws or regulations with adverse effects on health. Secondarily through foundation donations, and foundation investments in corporations whose products or practices are detrimental to public health.
Public Health Analyses
In some professional fields the influence and power of corporate funding-based foundations have been analyzed and criticized. For example, some journalists have pointed out issues of conflict of interest of news media and corporate funded foundations.[45,46,47] Some educators have been critical of the extent of the influence some foundations have on the direction and operations of public education.[44,48,49] But it appears that few public health professionals [50,51,40] have examined corporate-based foundations, including whether funding is appropriately directed at needs.[52,53] While much of the news media coverage of the foundations is favorable, occasional investigative reports or unflattering stories are published.[34-36, 54] More critical commentary about foundations occurs on blogs (for example, techrights and Seattle Education.)
Bill Gates visits the Department for International Development to discuss malaria,vaccine development and the role of his foundation in international aid.
Questions for Public Health Professionals to ConsiderPerhaps the lack of criticism by public health professionals is due to conflict of interests arising from the ubiquitous and large amount of foundation funding3 for public health programs and researchers. Public health professionals and organizations may be fearful of loss of funding or denial of application for funds for criticizing the foundations. Because foundations are sometimes in partnership the reaction to such critical analysis could easily diffuse across foundations and put a critic at risk at multiple foundations. Some philanthrocapitalists are sensitive to criticism and find it incredulous that anyone would consider them anything other than heroes whose financial and technological innovations they believe represent the future.[21] They isolate themselves and become more closely associated with the other wealthy around the world than they are to average members of society and to their own country, and seem to scorn the middle class.[21]
While this essay is necessarily an incomplete examination of the issues about corporate-based, philanthropocapitalist foundations, it does suggestion some questions that public health professionals might consider about the influence of such funding, including:
1. Is the corporate business model an effective and ethical method for addressing the social determinants of health?
2. Should a few wealthy individuals, without professional public health training and isolated from society, be setting the public health agenda through an undemocratic decision-making process, and one which likely excludes the population for which funding and programs are intended?
3. What processes would public health recommend that foundations use to incorporate community input into the funding decision process?
4. When a corporation that is the source of a foundation’s funds makes a product, provides a service or engages in practices that are detrimental to the public’s health, should a foundation use their investment power to influence?
5. What can public health do to encourage societal engagement in social action advocacy that gives voice to those who suffer rather than engaging in a philanthropy based on consumption and profit?
6. Have public health professionals been co-opted by their reliance on corporate-based foundation funding so that they are reluctant to critically examine the role of foundations in setting public health priorities and research and program agendas? If so, what action should the profession take to remediate and prevent a lack of critical examination of foundations’ role in public health?
Because of the pervasiveness of the business model perspective, public health professionals also have an advocacy role related to corporate influence on public health policy such as working toward the elimination of corporations’ rights of personhood which enables them to contribute unlimited amounts of corporate funds to federal election campaign advertising.[55]
Needed Public Health Research
In addition to examining the policy and program influence of foundations, there are areas of corporate-based foundation philanthropy that public health researchers need to study, including:
1. Study the interlink between the boards of various foundations that fund public health; how those foundations are linked to corporate boards, and what conflicts of interest may result from those links,
2. Analyze the composition, links and backgrounds of networks of officers, board members and staff of foundations that fund public health and assess how representative of society those networks are, and how the background of those individuals may influence funding decision-making processes and biases in funding priorities,
3. Establish surveillance systems to conduct frequent periodic monitoring, tracking and public reporting of foundations’ contributions to public health, based on amounts funded and areas funded; effectiveness in creating infrastructure and long-term capacity building; emphasis given to innovation, radical change, social transformation, and structural change, i.e., social determinants,
4. Compare foundation investments, returns, administrative costs and taxes paid with the amounts and types of its funding for public health,
5. Analyze and periodically publically report on foundations’ decision-making process: public transparency and accountability; peer review of grant applications, and involvement and role of role of officers and board, other foundations, corporations, health professionals, and community representatives in the foundations’ public health funding allocation decisions.
6. Study the network connections of foundation officers to politicians, elected officials and officials of multi-lateral international organizations, and the foundations’ direct and indirect tactics to influence public health policy through those connections,
7. Examine the source of foundation funding, including origination funding and on-going investments, and determine the cost-benefits of funds contributed to public health compared to the externalized costs of the corporate products, services and practices from which foundation funds are derived, and the amount of taxes paid by the corporate sources and philanthropocapitalists.
Through the large number of grants and the amounts of funding awarded, philanthropic foundations have a large influence on the field of public health. The size of foundation assets and the choices of issues to which the foundations contribute enable them to wield significant influence on society, including politics, policy, and the education and public health agendas.
The Bill and Melinda Gates Foundation
Unilateral decisions about funding priorities without the input of the community, lionizing individual wealth accumulation over community welfare, and dominance of the for-profit corporate business model, without regard for social or environmental consequences, are not consistent with the social justice foundations of public health.Within a market-based society the emphasis of philanthropocapitalists’ foundations on the for-profit, corporate business model perpetuates a market-based economic approach to solving public health problems. Public health professionals need to give greater consideration to the effects and ramifications of applying the business model to global public health problems. The business model-based philanthropy also warrants additional public health research. References
2. Center on Philanthropy Indiana University. (2010). Giving USA 2010: The Annual Report on Philanthropy for the Year 2009. Bloomington, IN: Giving USA Foundation.
16. McCarthy, M. A conversation with the leaders of the Gates Foundation’s Global Health Program: Gordon Perkin and William Foege. Lancet 2000; 356: 153–55.
17. Birn, A-E. Gates’s grandest challenge: transcending technology as public health ideology. Lancet 2005; 366: 514–19.
24. Wiist, W.H. (2006). Public health and the anticorporate movement: Rationale and recommendations. American Journal of Public Health, 96 (8), 1370-1375.
25. Wiist, W.H. (2011, in press). The corporate play book, health, and democracy: The snack food and beverage industry’s tactics in context. In Stuckler, D., & Siegel, K. Sick Societies: Responding to the Global Challenge of Chronic Disease. UK: Oxford University Press.
27. Parmar, I. (2002). American foundations and the development of international knowledge networks. Global Networks, 2 (1) 13–30.
28. Anderson, S. ,Collins, C., Pizzigati, S., & Shih, K. (2010). CEO Pay and the Great Recession: 17th Annual Executive Compensation Pay. Washington, D.C.: Institute for Policy Analysis.
29. 1993-1994 Microsoft SEC 10-K Annual Report. Page 6. Accessed July 15, 2011.
30. 2008 Microsoft SEC 10-K Annual Report. Page 31. Accessed July 15, 2011.
40. Stuckler D., Basu S., & McKee, M. (2011) Global Health Philanthropy and Institutional Relationships: How Should Conflicts of Interest Be Addressed? PLoS Med 8(4): e1001020. doi:10.1371/journal.pmed.1001020
41. Maich, S. (July 21, 2008). The Gospel According to Bill. Maclean’s121 (28):36-40.
42. Edwards, M. (2009). Gates, Google, and the Ending of Global Poverty: Philanthrocapitalism and International Development. Brown Journal of World Affairs, 15 (2):35-42.
49. Sinclair, M.N. & Vander Ark, T. (Spring 2010) Two Viewpoints. High School Journal. Pp. 94-97.
50. McCoy, D., Kembhavi, G., Patel, J., & Luintel, A. (2009). The Bill & Melinda Gates Foundation’s Grant-making programme for global health. The Lancet, 373(9675):1645-1653.
51. Sridhar, D. & Batniji , R. Misfinancing global health: a case for transparency in disbursements and decision making. Lancet 2008; 372: 1185–91
52. Black, B.E. Bhan,M.K., Chopra, M., Rudan, I., & Victora, C.G. Accelerating the health impact of the Gates Foundation Lancet, 373: 1584-1585. May 9, 2009.
53. Essner, D.E., & Bench, K.K. (2011). Does Global Health Funding Respond to Recipients’
Needs? Comparing Public and Private Donors’ Allocations in 2005–2007. World Development, 39(8): 1271-1280.
54. Wilhelm, I. (March 6, 2008). Gates Foundation Accused by U.N. Official of Creating Scientific ‘Cartel’. Chronicle of Philanthropy; 20(10): 12.
55. Wiist, W.H. (2011). “Citizens United, public health and democracy: The Supreme Court ruling, its implications, and proposed action” American Journal of Public Health, 101:1172-1197. DOI 10.2105/AJPH.2010.300043, March 18, 2011.
Understanding the influence of corporations on the public’s health today requires increasingly sophisticated skills for decoding propaganda as deep-pocketed corporations turn to astroturfing to influence health policy. The public relations strategy known as “astroturfing,” is a form of corporate-driven, top-down advocacy that is disguised to look like bottom-up, grassroots community activism.
In the U.S., the energy in public health is focused around regulating food and beverages with high-fructose corn syrup. In case this controversy has passed you by, high-fructose corn syrup is an extremely common additive to foods and beverages that damages health in a variety of ways.
Manufacturers are keen to leave it in products because for palates accustomed to it, it can be tasty and addictive, so it increases purchases and profits for food companies. Borrowing from effective strategies in the fight against tobacco, some public health advocates want to discourage the consumption of high-fructose corn syrup by making it cost more. This effort is sometimes referred to by the shorthand “soda tax.” Several initiatives have been proposed to establish a soda tax to alleviate budget shortfalls and to help pay for health care reform. Not surprisingly, food and beverage manufacturers see this as an attack on their bottom-line and are lobbying hard against any and all soda tax initiatives.
In the Internet era of easily disguised URL’s and no gatekeepers to vet what gets published, this kind of disinformation is harder to detect than ever. I’ve written here before about “cloaked websites” – websites that intentionally disguise authorship in order to put forward a political agenda – and these are a central tool of corporate propaganda in the digital era, including the battle around the soda tax. For example, the URL “www.nofoodtaxes.com” will take you to this site:
At first glance, it looks like a grassroots movement of everyday people concerned about “big government” and the “difficulty of feeding a family in today’s economy.” The link in the middle (“watch our tv ad!”) takes you to a slickly produced television commercial that aired in heavy rotation on stations in New York State where a soda tax was proposed. In the ad, a “concerned mother” posing as just a concerned citizen, talks directly to the camera and engages her assumed audience in a shared sense of outrage at the intrusion of big government imposing more taxes on hard-working families.
In fact, “Americans Against Food Taxes” is a cloaked site and is part of a front group funded and organized by the American Beverage Association, to protect industry interests. However, it can be very difficult to tell what’s a front group. The text on this website says that Americans Against Food Taxes is a “coalition of concerned citizens – responsible individuals, financially strapped families, small and large businesses in communities across the country” who opposed a government-proposed tax on food and beverages, including soda, juice drinks, and flavored milks. However, the real membership is the world’s largest food and soft drink manufacturers and distributors, including the Coca-Cola Company, Dr. Pepper-Royal Crown Bottling Co., PepsiCo, Canada Dry Bottling Co. of New York, the Can Manufacturers Institute, 7-Eleven Convenience Stores, and Yum! Brands.
Corporations that have a negative impact on the public’s health are especially adept at this sort of strategy.
In some ways, these sorts of propaganda efforts are not new. Going back to 1995, the tobacco giant Philip Morris hired PR Firm Burson-Martsteller to create “The National Smokers Alliance,” an early astroturf group. The purpose of the group was to stop Federal legislation intended to curb smoking by young people, a policy change that would have improved the public’s health by reducing tobacco-related deaths, and it would have hurt Philip Morris’ bottom line by reducing the number of future smokers. In this pre-Internet astroturf campaign, Burson-Martseller organized mailings and ran a phone-bank urging people to call or write to politicians expressing their opposition to the federal law.
The National Smokers Alliance continued its efforts against any legislation that would prevent new teen smokers through the late 1990s. In 1998, the group added television ads with a 1-800 number to call to its arsenal of techniques, along with phone-banking and mailing. According to The New York Times, “Those smokers who are reached by phone banks sponsored by cigarette makers, or who call the 800 number shown in television ads, are patched through to the senator of their choice.” Since then, public health advocates have managed to win major victories over big tobacco in the realm of popular opinion in the United States, yet many of these stealth marketing tactics continue unabated in other countries.
So, how do people concerned about the public’s health – or, even their own personal health – make sense of all this? How do we parse top-down, corporate propaganda from actual bottom-up, community-led efforts at activism?
On the one hand, it can be a difficult task. Some argue that astroturf is just another form of organizing. As one strategist accused of astroturfing against health care reform writes in a 2009 New York Times op-ed, “Organizing isn’t cheating. Doing everything in your power to get your people to show up is basic politics. If they believe what they’re saying, no matter who helped organize them, they’re citizens and activists.” This kind of sophistry, “it’s not astroturf, it’s just organizing,” is a common argument made by those trying to defend such tactics.
On the other hand, it’s not all that difficult to parse propaganda from facts if you ask two questions about the information we encounter online (or anywhere, really): 1) where is this information coming from? and 2) who stands to benefit from this information?
If the answers to both those questions are “a giant corporation,” chances are it’s astroturf. The chances are also good that it’s bad for the public’s health.
In two previous posts, I described why health and food activists should care about rising food prices and analyzed global, national and local influences on food prices. In this report, I examine the role of two such influences in more detail: public subsidies and speculation.
Subsidies and food prices
Can the USDA put our tax money where they want our mouths to go?
Source: Physicians Committee for Responsible Medicine.[1]
The public subsidizes food producers in a variety of ways. Most directly, the United States Department of Agriculture pays a variety of subsidies to food producers – direct payments to farmers or landowners for growing or not growing certain crops; counter-cyclical payments that are paid when crop prices fall below a level set by Congress; market-loss payments that are distributed when prices fall as a result of economic changes; a crop insurance program that reimburses growers for weather-related and other losses.[2] These subsidies disproportionately benefit big food growers. According the to the Environmental Working Group’s Farm $ubsidy Database, the largest and wealthiest 10 percent of farm aid recipients received 74% of all farm subsidies between 1995 and 2009, with an annual average payment of $445,127 per recipient to this top tenth, compared to an average of $8,682 for the bottom 80 percent of farmer recipients.[2]
Another type of subsidy comes through safety net programs such as SNAP (formerly called Food Stamps) and the school food program. These programs feed hungry people but also provide a guaranteed market for food producers, limiting their vulnerability to economic downturns. In Fiscal Year 2009, federal spending on SNAP was about 54 billion dollars and on other food programs about $20 billion for a total of $74 billion.[3]
A variety of other public programs subsidize the food industry more indirectly. Tax laws that allow food (and other) manufacturers to claim advertising costs as business expenses means that tax payers are indirectly subsidizing the marketing efforts designed to persuade people to eat unhealthy products. A study by the National Economic Research Board found that the elimination of tax deductibility tied to fast food advertising would reduce childhood obesity at a rate of 5-7 percent.[4] The authors estimated that since the corporate income tax rate is 35 percent, the elimination of the tax deductibility of food advertising costs would be equivalent to increasing the price of advertising by 54 percent.
Laws that shield food manufacturers from liability for the health consequences of their products constitute another huge subsidy. According to the National Restaurant Association, 23 states have passed “Cheeseburger Bills,” which bar lawsuits against fast food companies for their contributions to obesity. As a result, food prices don’t include these “externalized” costs. Avoiding liability or penalties for food safety violations or escaping paying the costs of treating the victims of food outbreaks constitutes another externalized subsidy to the food industry. Unsafe food costs Americans $152 billion per year. As Marion Nestle has observed, “the high externalized cost of our present food system is a good reason to reconsider current food policies.”[5]
While more research is needed to calculate the full costs of all food subsidies, Ken Cook of the Environmental Working Group estimates that the federal government paid out a quarter of a trillion dollars in federal farm subsidies between 1995 and 2009.[6] The other types of subsidies such as tax deductions, lax regulation and liability protection make the full costs much higher.
How do these subsidies affect food prices? In general, subsidies lower the cost of the subsided products, especially in comparison to unsubsidized products that consumers could choose as an alternative. However, given the multiple sources of subsidies and the product-specific consequences, there is no simple or single answer to this question. Some analysts have pointed to the significant effects of one subsidy or another while others have disputed the claim that subsidies play a major role in food prices or health.
For example, in an analysis of the impact of federal subsidies to corn growers, Alicia Harvey and Timothy Wise at the Global Development and Environment Institute at Tufts University, concluded that these policies provided high fructose corn syrups producers an implicit subsidy of $243 million dollars a year and more than $4 billion since 1986.[7] However, they concluded that HCFS subsidies are not the primary cause of soda overconsumption.
In my view, analyses of specific subsidy programs for specific products, while necessary to build a comprehensive body of evidence that can guide policy, miss the larger point of health impact. In almost all cases, subsidies are enacted at the behest of the food industry, not consumers or health advocates. Not surprisingly, their intended goal is to benefit the subsidized industry not to advance public health.
Given the central dynamics of the food industry in the last five decades – more industrialized production, higher profits for more processed and less healthy food, more advertising spending on less healthy than on healthy food, emphasis on national and global rather than local markets, heavy reliance on a few crops such as corn, wheat and soy – most industry-supported subsidies end up reinforcing rather than challenging the status quo. And from a health perspective, the most problematic element of the current status quo is that unhealthy food is cheaper and more available than healthy food. To change that dynamic will require a transformation in how government uses subsidies, not simply tinkering at the margins.
Currently, two disparate groups support large federal agricultural subsidies. Agribusiness wants to maintain the flow of public money that helps to maintain profitability while supporters of entitlement programs want to protect and expand programs such as SNAP, school meals and various rural programs. Together these constituencies have a powerful voice in Washington.
Similarly, opponents of the current pattern of subsidies include two groups with very different interests: health advocates who want to switch subsidies from less healthy to healthier food[8] and the most conservative Republicans who want to end or significantly shrink safety net programs and let free markets reign. Recently Republican House leader Representative Paul D. Ryan, Republican of Wisconsin and the chairman of the House Budget Committee, told reporters, “We shouldn’t be giving corporate farms, these large agribusiness companies, subsidies. I strongly believe that.”[9] Ryan has also called for a 20 percent cut in SNAP funding, reductions amounting to $127 billion by the year 2021.[10]
From a public health perspective, an urgent priority is for advocates to develop strategies that can unite supporters of anti-hunger programs and those concerned about diet-related health conditions such as obesity, diabetes and heart disease without making unacceptable compromises with the food industry or the politicians who want to end entitlement programs. Forging such a policy agenda will require advocates to develop far more sophisticated understandings of the causes and consequences of rising food prices. Several of the alliances working on the 2012 Farm Bill such as the Community Food Security Coalitionand the National Sustainable Agriculture Coalition are engaging their members in just such dialogues.
Speculation and food prices
At the Global Commodities Forum in Geneva in January 2011, hosted by the UN Conference on Trade and Development, Michael Dunn, a Commissioner of the U.S. Commodity Futures Trading Commission (CFTC), noted that commodity derivatives markets, places where financial instruments based on food commodities are traded, perform a “critical price discovery function.” He said the CFTC should ensure stable and orderly markets and not prevent or limit volatility that arises as a result of a change in market fundamentals.[11] But how does that financial goal affect the ability of the world’s population to get the food they need to sustain health?
Speculation can lead to increases in food prices when food producers from small farmers to multinational agribusiness corporations withhold products from the market in hopes of causing or benefiting from subsequent price increases. More indirectly, investors can buy “food futures” in commodity markets and hold on to these investments in the hope that as demand increases or supply falls, the re-sale price of the food future will increase, leading to more generous returns on their investments.
Some observers believe that the collapse of the housing and derivatives markets in the United States that began in 2006 encouraged speculative investors to move their money out of housing and real estate and into seemingly safer commodities markets, including energy, metals and food. In early 2008 such investments contributed to sharp increases in the price of food staples such as rice and wheat, as shown in Chart 1 below. After this bubble inevitably burst, food prices collapsed, further contributing to market volatility and disadvantaging the small producers least able to survive periods of market disruption.
Source: Ghosh J.[12]
As Susanne Amann and Alexander Jung observed last summer in the German news weekly Der Spiegel, investors are now “betting big again on commodities like wheat, coffee, rice and soybeans.”[13] “As a result,” they wrote, “prices are no longer determined by supply and demand, but by investment banks and hedge funds.” In 2009, Goldman Sachs earned $5 billion in profits from commodities speculation. Other financial institutions involved in commodities trading are Bank of America, Citigroup, Deutsche Bank, Morgan Stanley and J.P. Morgan, many of the same cast of characters who helped to precipitate the 2008 financial crisis. In fact, these banks have created new financial instruments known as collateralized commodities obligations, CCOs, which are similar to the subprime mortgage derivatives that helped to burst the housing bubble.
These developments have led some officials and advocates to call for tighter regulation of food speculation. In 1936, as part of the New Deal reforms, Congress passed the Commodities Exchange Act, restricting speculation in food products. In the 1990s, however, the financial industry successfully lobbied Congress to weaken these limits, leading to increased trading in agricultural products, led by Goldman Sachs.[13]
In a report published in Harper’s Magazine last July, Frederick Kaufman investigates the rise of the financialization of food commodities.[14] He concluded that the 80 per cent increase in world food prices between 2005 and 2008 suggests that investors will continue to invest in food commodities and quoted a hedge fund manager who wrote his clients that “the fundamentals argue strongly that these sectors have significant upside potential.”
Other analysts disagree. In a 2011 research report written for Deutsche Bank, Claire Schaffnit-Chatterjee concluded that deeper structural factors influencing food supply and demand were more important than speculation, which in her view generally follows rather than creates a price bubble.[15] She did note that since food has a low price correlation with other asset classes, “agricultural commodities are likely to remain an interesting instrument for portfolio diversification.”
Acknowledging this debate about the role of speculation, Olivier de Schutter, United Nations Special Rapporteur on the Right to Food, observed that volatility in food prices, viewed by market proponents as a necessary price correction, has a particularly disruptive impact on poor and food-insecure populations.[16] He argued that “reforming the global financial system should therefore be seen as part of the agenda to achieve food security, particularly within poor and food-importing countries.” By framing food security as a basic human right, he opens new avenues for the pursuit of affordable, healthy food.
In the fourth and final post on food prices and health, I will consider various strategies that have been proposed to better align food subsidies and health, reduce the adverse health consequences of food speculation and reverse the current situation in which unhealthy food is often cheaper than healthy food.
[4] Chou S-Y, Rashad I, Grossman M. 2008.”Fast-Food Restaurant Advertising on Television and Its Influence on Childhood Obesity,” Journal of Law & Economics,2008; 51(4),599-618.
[12] Ghosh J. Commodity Speculation and the Food Crisis. In Excessive Speculation in Agriculture Commodities: Selected Writings from 2008–2011, Lilliston B, Ranallo A, editors. Institute for Agriculture and Trade Policy, 2011., pp. 51-56.
Corporations often promote the importance of their role in partnerships with government, multi-lateral organizations, not-for-profit health organizations, community groups, professional organizations, and academia in preventing disease, promoting health, protecting the environment, and research.1 Some corporations set up special units within the corporation to further those goals and hire prominent public health and medical experts to direct those corporate programs.2,3
MOU between Alliance for a Healthier Generation and several beverage manufacturers
Effects of Partnerships
The reliance of independent nonprofit organizations on corporate funds creates dependency and conflict of interests, co-opts the nonprofit into becoming an ally,4 and results in undue corporate influence in decision-making processes and control of health standards. Corporations also bring influence on multi-lateral organizations. The sugar industry brought U.S. political pressure on the World Health Organization to lower proposed standards for dietary intake of sugar.5
The deleterious influence of corporate funding on research has been documented in a variety of specialties. Reviews of journal research articles have shown that corporate funded research leads to compromises in integrity6 and produces results favorable to the corporate funder.7
Corporate support for, and partnerships with, professional organizations, such as the association of the American Academy of Family Practice and Coca-Cola, have been controversial.8,9 Because of potential conflict of interest arising from corporate funding of professional education, some medical groups have established guidelines regarding corporate funding of their education programs.10 While corporations are readily visible in the exhibit area of the annual meeting of the American Public Health Association,11 and corporations provide financial support to the organization in various ways, the Association has a policy regarding acceptance of advertisers, exhibitors, gifts and donations.12, 13 In 2006 APHA established a committee to evaluate proposed gifts and donations, including from corporations.
The director of the Contra Costa Department of Health Services, Dr. William Walker, announces that he is resigning his 25-year membership in American Academy of Family Practice after it signs a deal with Coca Cola.
A Major Reason Partnerships Are Attractive
One of the reasons that partnerships with corporations or receipt of corporate funding is attractive to community groups, government agencies, and academia is because of the decrease in government funding available for programs, regulation and research. The funding shortage is due in part to the failure of corporations to carry their share of societal obligations through paying their share of federal income taxes. A report from the U.S. Government’s General Accountability Office (GAO) showed that from 1998 to 2005, 34 percent of foreign corporations in the U.S. and 24 percent of U.S. corporations paid no taxes for at least half of those years.14 In 2002 and 2003, 82 out of 275 most consistently profitable Fortune 500 corporations collectively paid no federal tax at least one of those years; 275 paid less than half the 35% statutory rate.15 Recent news reports showed that in 2010 General Electric earned $5.1 billion in profits in the U.S. and Exxon Mobil had $37.3 billion in pretax income in the U.S. but neither paid any U.S. federal income taxes.16,17 The loss of that tax money does affect the government budget. For example, because in 2002 corporations did not pay the statutory tax rate, the US government treasury had $172 billion less with which to operate.18
Thus, because community organizations need funding to conduct programs for the communities they serve, academics need funding to conduct research, and health professions organizations need money to operate, they turn to corporations.
What Corporate Money Buys
Because of the power and influence corporations, industries, and industry alliances have through corporate financial contributions to election campaigns and through lobbying, legislators pass laws that protect corporations and cut budgets that eliminate or reduce health programs, including decreases in agency’s ability to monitor and regulate corporate practices. Corporate political influence also results in government appointment of corporate or industry representatives to government advisory panels, committees and boards that set health standards and policies, influence health program and research funding priorities, and evaluate medicines and devices. Through political influence corporations can prevent citizens from having the right to universal healthcare, environmental protections, education, a safe and healthful workplace, a living wage, and housing. Thus, because of corporate influence on government policies and budgets, society must rely on corporate funding and partnerships, local community and religious institutions, and philanthropic donations (much of which is of corporate origin) for basic needs and protections that are the responsibility of government.19
The Dangers of Partnerships
Any partnership with industry in which there is corporate remuneration or exchange, whether indirect or quid pro quo, creates a conflict of interest and compromises the independence of the beneficiary. The old adage against “biting the hand that feeds you” is relevant here. If an individual, community or organization receives money from a corporation, they can be co-opted, becoming an ally of positions the corporate funder takes and more willing to compromise their standards. They may also be less likely to oppose the more egregious health harming products, operations or policies of the corporation. Also, if community organizations become dependent on corporate funds for providing services, this leaves the entire community vulnerable to deprivation in health services and activities.
The purpose, goal and values of public health and that of the corporation are fundamentally different. Public health’s goal is to protect and promote the health of the public. Legally the corporation’s sole purpose can only be to make a profit to return to investors (despite corporate public relations rhetoric about social responsibility, which can only be in service to the bottom line). Partners cannot have fundamentally conflicting goals. Public health professionals cannot allow corporate enticements of partnerships and funding to blur or disguise the distinction between the differing purposes, goals and values. The corporation has neither the mandate, nor based on their absence from the constitution, the right or authority to make decisions on what is in the public interest.
Some organizations or individuals in public health and medicine who accept corporate financing, grants or gifts and who support partnerships with corporations may believe that the positions stated here are too dichotomous and antagonistic to current realities. However, history shows that movements to abolish slavery, gain the right of women to vote, and labor its right to organize were out of necessity uncompromising and militantly assertive. They did not fight for nor compromise for incremental or partial rights. Similarly, public health cannot bargain away health standards, monitoring, and accountability through incremental comprises with the corporation. We need real and fundamental reforms more than distracting incremental change. Reliance on corporate financing subjugates the independent voice of public health to commercial goals. We must take a stand to either work to strengthen the ability of the democratic processes and governments to better protect and promote health, or to work to increase corporate profits.
What Public Health and Community Organizations Can Do
Below are a few things that the field of public health and the not-for-profit world of community organizations should get the corporate world to agree to do before partnering with them or accepting funding from them.20 Implementation of these would help prevent conflict of interest and co-optation, and help ensure that government and private-public partnerships are not dominated by corporate influence.
1. Provide independent public health professionals and community representatives: a) access to corporate records, facilities, workers, research reports, health promotion budgets, and communications to conduct independent audits of the corporation’s health promotion, environmental, worker health and safety programs and human rights activities, and b) the right to immediately provide an independent written report to the public.
2. Fund independently developed health promotion publicity campaigns in amounts equivalent to the corporation’s advertising budget.
3. Keep all corporate health promotion and health education programs and activities free of corporate logos, the corporation’s name, products, symbols, figures, etc.
4. Not make any contributions to election campaigns to political parties, political action committees, independent campaign advocacy organizations or lobbyists, or on ballot referenda or amendments.
5. No corporate officials accept employment or appointment to government regulatory agencies, boards or committees that have authority for any part of their industry.
6. Pay the full statutory federal corporate tax rate.
7. Submit all products and their contents to independent testing for safety, healthfulness, and efficacy prior to marketing to the public.
In order to avoid conflict of interest and conduct truly independent, objective research, researchers need to work out written agreements with corporate funders about such matters as integrity of the research methods and analyses, compensation, timing and freedom of publication and presentations, and access to data before accepting corporate funding.21
References
1. Yach D, Feldman ZA, Bradley DG, Khan M. Can the food industry help tackle the growing global burden of undernutrition.Amer J of Public Health. 2010; doi/10.2105/AJPH.2009.174359
2. Norum, KR. Invited commentary to Yach editorial: PepsiCo recruitment strategy challenged. Public Health Nutrition. 2008; 11(2):112-113. DOI: 10.1017/S1368980007001632.
4. Jacobson, MF. Lifting the veil of secrecy from industry funding of nonprofit health organizations. International Journal of Occupational and Environmental Health.2005; 11:349–355.
5. Bosely S. Political context of the World Health Organization: Sugar industry threatens to scupper the WHO. International Journal of Health Services 2003; 33(4): 831-833.
6. Tereskerz P, Hamric AB, Uterbock TM, Moreno JD. Prevalence of industry support and its relationship to research integrity. Accountability in Research. 2009; 16:78–105.
7. Lexchin J, Bero LA, Djulbegovic B, Clark O. Pharmaceutical industry sponsorship and research outcome and quality: systematic review. BMJ. 2003; 326:1160-1170.
8. Howard B. Professional medical organizations and commercial conflicts of interest:Ethical issues. Annals of Family Medicine. 2010; 8(4):354-358Top of Form.
9. Heim, L. Identifying and addressing potential conflict of interest: A professional medical organization’s code of ethics.Annals of Family Medicine. 2010; 8:359-361.
11. American Public Health Association. Final Program: Social Justice: A public health imperative. Exhibitor Booth Description. 138th Annual Meeting and Exposition November 6-10, 2010, Denver, CO. Pp 213-234.
13. Executive Board of the American Public Health Association. Guidelines for Gifts and Donations. American Public Health Association. 2001. Accessed April 25, 2011.
19. Gostin, LO. Public Health Law: Power, Duty, Restraint. Berkeley, CA: University of California Press; 2000.
20. Wiist, WH. The corporate play book, health, and democracy: The snack food and beverage industry’s tactics in context. In Stuckler, D., & Siegel, K. Sick Societies: Responding to the Global Challenge of Chronic Disease. UK: Oxford University Press; In Press.
21. Rowe S, Alexander N, Clydesdale F, Applebaum R, Atkinson S, Black B, Dwyer J, Hentges E, Higley N, Lefevre M, Lupton J, Miller S, Tancredi D, Weaver C, Woteki C, Wedral E. for the International Life Sciences Institute (ILSI) North America Working Group on Guiding Principles. Funding food science and nutrition research: financial conflicts and scientific integrity. Nutrition Reviews. 2009; 67(5):264–272.
Discussions about corporations’ influence on health often implicitly or explicitly raise the following question: if the law allows corporations to amass money and consequent power, then why doesn’t the law require corporations to protect, and not harm, health? This simple question has been asked, in various forms, for at least a century.
Adolph A Berle
The debate surrounding this question involves two competing versions of the corporation.[1] In the first version, the corporation is viewed as the property of the individuals who purchased its shares—the stockholders or owners. According to this view, “the corporation’s purpose is to advance the purposes of these owners (predominantly to increase their wealth), and the function of its directors, as agents of the owners, is faithfully to advance the financial interests of the owners.”[2] Those who adhere to this view argue that corporate law should govern “little more than the private relations between the shareholders of the corporation and management.”[3] In the second version, the corporation is viewed “as a social institution.”[4] Proponents of this view believe that corporate law should be “deliberately responsive to public interest concerns,”[5] which includes health and safety considerations.
While federal and state courts have heard many legal challenges over the fundamental nature of a corporation, commentators trace the debate’s formal origin to two articles published in the Harvard Law Reviewin the early 1930s.[6] In 1931, Adolf A. Berle, a professor at Columbia Law School, wrote Corporate Powers as Powers in Trust. In this article, he argued that “all powers granted to a corporation or the management of a corporation . . . are necessarily and at all times exercisable only for the ratable benefit of all the shareholders as their interest appears.”[7] Berle believed that corporations were simply vehicles for advancing and protecting shareholders’ interests and that corporate law should be interpreted to reflect this principle. He suggested that any other account of corporations’ function and purpose would “defeat the very object and nature of the corporation itself.”[8]
One year later, E. Merrick Dodd, a professor at Harvard Law School, challenged Berle’s position in For Whom are Corporate Managers Trustees. Dodd suggested that, “there is in fact a growing feeling not only that business has responsibilities to the community but that our corporate managers who control business should voluntarily and without waiting for legal compulsion manage it in such a way as to fulfill those responsibilities.”[9] He quoted the heads of several major corporations, such as General Electric, to argue that business leaders had come to recognize that corporate managers needed to consider social responsibility when running their companies.
"If we recognize that the attitude of law and public opinion toward business is changing, we may then properly modify our ideas as to the nature of such a business institution as the corporation and hence as to the considerations which may properly influence the conduct of those who direct its activities." - E. Merrick Dodd, Jr.
Dodd provided several interpretations of this view relative to the requirements of corporate law. First, he explained that if “social responsibility” meant that corporate managers paid more attention to the needs of their employees and consumers, this would ultimately benefit shareholders. Dodd supported this argument by noting that employee satisfaction leads to greater productivity and ultimately increased profits. By this logic, managers could actually increase profits by focusing on the needs of groups other than shareholders.[10] Next, Dodd argued that courts had provided great latitude to corporate managers, allowing them “a wide range of discretion as to what policies will best promote the interests of the stockholders . . .”[11] For example, Dodd suggested that corporate charitable giving, while not immediately increasing shareholder wealth, could generate good will in the community.[12] Such good will could benefit shareholders, since consumers would be more likely to think favorably of the corporation and buy its products.
For Dodd, these arguments meant that corporations are “affected not only by the laws which regulate business but by the attitude of public and business opinion as to the social obligations of business.”[13] He claimed that society’s view of the corporation as a purely private enterprise was shifting, and that corporate managers should “recognize that the attitude of law and public opinion toward business [was] changing . . .”[14] By arguing that corporate law should reflect shifts in public opinion about the purpose of corporations, Dodd paved the way for those who would later argue that corporations can and should act to benefit constituencies beyond their shareholders.[15] The echoes of Dodd’s argument are often heard among those who champion corporate social responsibility and responsible business practices.
Commentators continue to mention the Berle/Dodd debate, encapsulated by their Harvard Law Review articles, when contemplating how corporations should function within society.[16] Today, variations of this debate surface each time advocates challenge corporate practices that have harmed or may harm the public’s health. The debate arises whenever policy-makers contemplate regulations that would require corporations to engage in behaviors that would protect the public’s health. And, the debate over corporations’ fundamental purpose will continue for years to come, as new corporate practices come to light and new regulations are proposed.
Interestingly, the Berle/Dodd debate did resolve, but with an unexpected twist. In 1954, Berle, who had espoused the view that corporations should be run exclusively to advance their shareholders’ interests, published The 20th Century Capitalist Revolution. In this book, he mentioned his debate with Dodd and stated that “[t]he argument has been settled (at least for the time being) squarely in favor of Professor Dodd’s contention.”[17] Twenty years after articulating his original position, Berle conceded that the law had supported Dodd, in that it did allow directors some discretion to consider stakeholders other than a corporation’s shareholders.
Berle’s book was published one year after the New Jersey Supreme Court decided A.P. Smith Manufacturing Company v. Barlow (1953), which definitively established corporations’ ability to make philanthropic donations and offered support to Dodd’s arguments. In all likelihood, this decision convinced Berle that even if corporations must be run with their shareholders’ best interests in mind, the law gives corporations some opportunities to consider other stakeholders. For those who act to protect and promote the public’s health, this nuanced understanding of a corporation’s purpose is key.
References
[1] Kerr JE. Sustainability means profitability: the convenient truth of how the business judgment rule protects a board’s decision to engage in social entrepreneurship. Cardozo Law Rev. 2007;29:623-668, at 660.
[2] Allen WT. Our schizophrenic concept of the business corporation. Cardozo Law Rev. 1992;14:261-281, at 264-265.
[3] Millon D. Theories of the corporation. Duke Law J. 1990;1990:201-262, at 201.
[4] Allen WT. Our schizophrenic concept of the business corporation. Cardozo Law Rev. 1992;14:261-281, at 265.
[5] Millon D. Theories of the corporation. Duke Law J. 1990;1990:201-262, at 201.
[6] Schwartz DE. Defining the corporate objective: section 2.01of the ALI’s Principles. George Washington Law Rev. 1984;52:511-533, at 522.
[7] Berle AA. Corporate powers as powers in trust. Harvard Law Rev. 1931;44:1049-1074, at 1049.
[8] Berle AA. Corporate powers as powers in trust. Harvard Law Rev. 1931;44:1049-1074, at 1074.
[9] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163.
[10] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1156.
[11] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1157.
[12] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1159.
[13] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1161.
[14] Dodd EM. For whom are corporate managers trustees. Harvard Law Rev. 1932;45:1145-1163, at 1163.
[15] Velasco J. The fundamental rights of the shareholder. U.C. Davis Law Rev. 2006;40:407-467.
[16] Matheson JH, Olson BA. Corporate cooperation, relationship management, and the trialogical imperative for corporate law. Minnesota Law Rev. 1994;78:1443-1491, at 1485.
[17] Berle AA. The 20th Century Capitalist Revolution. New York: Harcourt, Brace and Co; 1954, at 169.
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