Occupy Wall Street and Stir the Corporate Conscious

The move to Occupy Wall Street is a direct outcry of an economically impoverished people unemployed due to poor investment and credit management compounded by corporate cash hoarding. The frustration is directed at Wall Street but is representative of corporate practices in the U.S. Hopefully the protests are a wake up call to organizations that it is time to exercise corporate social responsibility.

The economic crisis hit the wall in 2009, but it was a slow decline coupled with the result of sub-prime lending. As early as June 2007, Bloomberg Businessweek warned about The Real Cost of Offshoring. The attractiveness of cost cuts lured U.S. organizations offshore. However, the gross domestic product, reported as healthy by the Bureau of Labor Statistics, was actually a phantom index.

While rumors abound with whispers of conspiracy, accusations of greed and government favoritism, what do these rumors accomplish? We are a capitalist society, based on supply and demand, production and consumer. What can make the U.S. capitalistic economy great is self-regulation of wealth.

Henry George, sometimes referred to as the father of modern capitalism, summed this up in the preface of his book Progress and Poverty:

"To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."

Henry George's theory of capitalism is based on four ideas:

1. he who makes should have;
2. he who saves should enjoy;
3. what the community produces belongs to the community for communal uses; and God's earth, all of it, is the right of the people who inhabit the earth.

Taxing the rich will not change the economic situation. Making the federal government responsible for the economy will not change the situation. What can influence change in the U.S. economy is best accomplished by enacting the community premise: what the community produces belongs to the community for communal uses.

This is not socialism. The U.S. economy functions on consumerism, supply and demand. The concept of community in capitalism means that production belongs to the same community where the organization is incorporated and the fruits of production, the working capital realized by the organizations, should be reinvested in the community for communal use.

As of the second quarter of 2011, ten U.S. corporations are holding a total of $508 billion dollars in cash on their balance sheets. While this is theirs to have (1), these organizations have a corporate social responsibility to the community of the U.S. This means that organizations, not the federal government, are responsible for creating and sustaining the economic well being of the U.S. community by operating, hiring and producing on U.S. soil.

Simply put, organizations have a right and a responsibility to profit and are also the guardians of the economy. It is socially irresponsible when profits rise at the expense of the community and government where the profits are reported. Rather than shrinking from the economic crisis in the U.S., corporations should act to relieve the pressure.

• Analyze the percentage of production completed offshore. If this amount is greater than 20%, consider bringing back the production to U.S. soil. Contribute at least 50% of production to the U.S. economy.
• Shared services centers make sound business sense. North America currently has 29% of shared services centers. U.S. corporations can return their share of global shared services centers to North America.
• Analyze purchases and ensure that 50% or more are purchased from vendors operating within the U.S. 
• Choose U.S. based technology, contractors, and personal service firms. 
• Consider aggressively improving business-to-business transactions that will circumvent the need for credit lines. One method is electronic invoice presentation and payment, which will marry the seller and the buyer in an agreed upon payment cycle that fits the needs of both. 

As senior leaders issue a collective gasp, proactive leaders will see the benefits. At some point, all the cash hoarding will end as the consumer fades and products gather dust. Just as the sub-prime mortgage industry ended, so will the cash stores. Instead, organizations should invest in processes that will improve production, maintain U.S. employment and still turn a profit.

But that's just me.