income, was seen by some as a threat to the government’s ability to regulate. Indeed, there was even concern that the board of the Alaska General Stock Ownership Corporation, having been elected from the same constituency that elected the governor
and legislature, might represent an elective
threat to General
the entrenched Alaska political Stock Ownership Corporations
ultimately involve limitations on the political and legal rights of shareholders be resisted as an attempt to preserve the existing political hierarchy.
The intellectual foundation for the use of binary economic modes of privatizing public assets lies in the concepts that (1) it matters who owns the privatized capital, (2) access to capital is limited by risk, and (3) capital in concentrations that produce income which is not consumed retards economic growth. The issue was well summarized by U.S. Senator Mike Gravel in a 1978 letter to his constituents in which he said, “The fact is that the crisis of today’s capitalist economies is very directly tied to their failure to bring about economic equity. The key to both economic health and economic equity lies in spreading the ownership of the productive instruments of our society: our corporations. We can begin to treat the root of both problems if we can spread among all citizens the ownership of the companies which produce the nation’s wealth. The General Stock Ownership Corporation is conceived as a means of achieving this widespread ownership without confiscating the property of the wealthy and without creating a monolithic socialist state.” (Gravel, 1978b). What was true then of the GSOC remains true today of all the binary economic tools for broadening capital ownership and their application to the privatization of public assets sweeping the globe.
See Donohue, 1979. “No matter how the AGSOC is ultimately designed, it would be foolhardy to believe that this entity would not quickly become highly politicized and ultimately, if it is successful, become an extremely powerful political force in the State . . . . A successful AGSOC, representing as it would the residents of the State of Alaska, would in essence become a fourth branch of government. It will be a fourth forum in which State environmental, social, economic and tax questions will be vigorously debated. The Governor’s control over this corporation is limited to appointing the first board of directors. After that the corporation will, as presently designed, operate completely independent of any state agency, albeit it will be subject to all applicable state regulatory provisions. Given the composition of the corporation, it would become quickly susceptible to the pressures of any cohesive organized group of residents within the State, such as large labor unions, native corporations, etc. . . . Although one could argue that AGSOC violates the fundamental political theory of the State Constitution which established only three branches of government, this objection is more of a philosophical one than a legal one, and it is not anticipated that any such challenge could be successfully formulated and presented to the State courts. Finally, under this general category of concerns relating to its impact on the present institutional balance of power as contemplated by the State Constitution, it should be noted that management of the corporation, members of the board of directors of the corporation, could, and very well might, utilize their position as a forum for criticism of the Administration’s economic policies and ultimately as a launching pad for State elective office.”