Submitted by admin on Mon, 2005-11-07 09:01. ::
We need to recognize, first of all, that we need a diversified energy base in this world. And it is a bit ironic to me that it is not the oil companies but General Electric that is the second-largest producer of wind- generating equipment in the world after a Danish company. General Electric just bought AstroPower, which is a financially troubled but interesting solar-energy company. So my question is whether or not the oil companies are going to consider themselves truly energy companies and develop a broad base of energy for this country.
It is a new line that has been drawn already. Since the early 1980s, we've seen a tremendous transfer of assets and tremendous deregulation of business - whether you're looking at Russia, which essentially has privatized its entire industrial base, or China, where free-market principles are being integrated into a state-controlled economy, or Europe. where one industry after another has been privatized, or the United States. where we have deregulated many industries.
It was done for very good reasons. Business is in many regards a much more efficient producer of wealth than government. What has happened, though, is that there are a couple of unanticipated consequences of this. First, we've seen a whole range of scandals going on. It seems you can barely pick up the newspaper from one day to another without another Enron, a WorldCom, a Parmalat in Europe. And the second thing that you see - a much more subtle thing, but I think more important than the upsurge of these scandals - is a shifting expectation on the part of the public. The expectation [is] that these companies will act increasingly in the public interest, as a kind of tacit quid pro quo ... for the new assets and power that they've been given. So the real dilemma that government has created for itself and for society is this: How can you get corporations to act more in the public interest - but without returning to the same kind of heavy-handed regulation that we had before?
The contracting part is what I just mentioned, the pulling back from regulation and ownership. The expansion is a little less clear. But at the heart of it is giving to investors, giving to consumers, and giving to the labor force the kind of tools that they need to express to corporations their sense of: Are you doing a good job? Are you acting in the public interest?
The first tool is data, the basic data on what corporations are doing in terms of social and environmental issues. It's remarkable how much we know about the financials of these corporations ... and how little we know about what they're doing when it comes to safety, promotion of women and minorities, environmental management.
I want to be clear here. Regulation is the job of government. It is the proper province of government, and it should not pull back from regulation in certain and essential areas. You do not want product safety in the hands of the marketplace or worker safety in the hands of the marketplace. However, there are a variety of issues where feedback from society is very important for corporations, and the additional data you give to consumers and investors can help force corporations to compete. So the marketplace is forcing them to compete on social and environmental issues the way they had competed in the past on price, on innovation, on efficiency. The fundamental change is that I think we are headed toward asking corporations to compete on social and environmental issues.
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