“Democracy no longer belongs to the people.” Election time always necessitates in-depth analysis about the state of the political landscape, and for David Levine, CEO and Co-founder of the American Sustainable Business Council, the system is no longer serving the country. “The game has been rigged,” he says.
Levine pinpoints a shift in power in the US political system away from the individual and towards multinational corporations. Genuine power now operates above and beyond the old party-political system. As he puts it, it is no longer about “Democrat, Republican or Independent. It is something else.”
One clear consequence of this shift is the widespread activity of corporate tax-avoidance. According to a recent report entitled The Price of Offshore Revisited, an estimated $21 trillion dollars is currently hidden away in secretive jurisdictions like Switzerland and the Cayman Islands. Meanwhile, Citizens for Tax Justice believe that $100 billion in revenue is lost each year in the United States alone. “If our economic system continues to move in this direction,” Levine argues, “then that spells disaster.”
Aside from the loss of revenue, tax avoidance is having an adverse effect on smaller businesses. With 70-80% of new jobs created by smaller and mid-size businesses, they are a key component of a successful economy, but one penalised in the current climate. As Levine points out, “the majority of these small businesses are paying their share of taxes,” and that makes it extremely difficult for them in a competitive market place. The result is a polarisation of economic and political power.
Attempts have been made to close the various tax loopholes, but due to the systemic shift in politics that Levine identifies, it has proved very difficult to alter the situation. Part of the reason for this is that political parties are heavily dependent on funding from the very corporations that are at the heart of the problem. The Dirty 30, a nickname given by Citizens for Tax Justice to the worst of the big businesses, avoided $67.9 billion in taxes 2007 and 2010 and spent half a billion dollars lobbying Congress.
“Hundreds of millions of dollars are being dropped into the elections,” Levine argues, “and we have no clue who is making them, to whom they are going, and to what purpose.” With a successful election campaign costing in the region of $500 million it's inevitable that party leaders are increasingly, to use Levine's phrase, “beholden to those that make the donations”.
The situation is hardly improving. The Supreme Court's 5-4 ruling on Citizens United now allows businesses to make anonymous, uncapped donations to political parties. As dissenting judge, Justice Stevens, argued, the ruling “threatens to undermine the integrity of elected institutions across the nation. A democracy cannot function effectively when its constituent members believe laws are being bought and sold.” Levine agrees: “Citizens United opened the floodgates to unlimited amounts of non-transparent funds. It’s really taking us steps away from the democracy we believe we should be operating with.”
Under such an opaque system, one way to get an idea of where the money is coming from is to examine the policies in place. Levine points out, for example, that there are still policies “to provide subsidies for the oil industry...at the same time as we’re seeing windfall, record-breaking profits”. According to Clean Technica, first quarter profits for 2012 were at $33.5 billion for the Big Five (BP, Chevron, ConocoPhillips, ExxonMobil and Shell). One wonders therefore why these subsidies, originally set up to encourage development of better technology, still continue.
In this kind of climate, the chances of small businesses having much say in Congress are slim, and with the US Chamber of Commerce effectively run by sixteen large corporations, that avenue is also extremely limited. Which is exactly why Levine, whose whole career has involved exploring possibilities for renewable energies and technologies, new financial systems, community banking and socially responsible investment, decided the time was right to form the American Sustainable Business Council.
By the time of a 2009 Transition Team meeting in Washington, it was clear that businesses and business leaders from all over America wanted a change to the system to effect a greater focus on social and environmental issues in government. “I came to the meeting,” Levine recalls, “and went to a breakfast with folks from the Social Venture Network and I proposed the idea of coming out of the meeting with some sort of consensus document.” The document was to contain a list of what had to be done in order to create a more sustainable economy. Priorities included green chemistry, renewable energy and green banking. This document was to become the ASBC’s letter of shared priorities for a new economy, signed by 1,300 business leaders.
These values have clearly struck a chord. The ASBC has rapidly grown into a reputable force around Washington and the United States, currently representing over 150,000 businesses and 300,000 entrepreneurs, investors and business leaders. “Montana to Utah, Arizona to New York, Levine says: “across the whole country we see businesses stepping up and saying, 'Our voices have not been heard'.”
With popularity comes power, and results. The spring of 2012 saw the Environmental Protection Agency bombarded with 2.1 million comments from business leaders arguing that a limitation on carbon emissions from power plants would encourage a clean energy economy through a market-based transition. It had the desired effect: a cap was set of 1,000 pounds of C02 for every megawatt of electricity produced.
One of ASBC’s main focuses is the implementation of B Corp across America. B Corp is a piece of legislation that aims to utilise the strength of business to create social and environmental development. As Levine explains: “The way corporations are set up, you’re beholden to your shareholders to create financial return,” but with B Corp, “you would be beholden to meaning, social and environmental criteria as well.” B Corp's promotion of “people, planet and profit”, or as it is known, “The Triple Bottom Line”, allows entrepreneurs and businesses to explore and develop business structures that focus on the well-being of humanity and the planet, as well as making returns. Already nine states have enacted benefit corporation legislation into law, including South Carolina, Illinois and California.
What makes the ASBC so powerful is that it recognised early on the fact that America was no longer operating under the old system of political parties. “With republicans and democrats at each other's throats all the time it’s not easy for someone to step into the space and be able to speak to both parties, “ Levine says. “But we will talk with any legislator that is willing to talk and work with us.” Like the multinational corporations whose domination it seeks to challenge, the ASBC is transcending the petty oppositions of the party-political system to fight for a new economic paradigm.
Since the banking collapse in 2008 and the subsequent global recession, many have argued that the very concept of capitalism is at fault. 'Capitalism is Crisis' one Occupy banner proclaimed. But Levine and the ASBC offer an alternative: evidence that the ethics of business can change, that many businesses want to change – they just have to be allowed, and encouraged, to do so. The goal is simply a fair system, one that affords ethically-minded businesses the same chances as large corporations. Ethics and profit, the ASBC argues, can coexist.
Image Credit: Whitney Smith