Wednesday, August 25, 2010

In Defense of Corporations

Corporate bashing is accelerating, a reflection of America's moving leftward and the media's maxi-covering corporate mistakes, from Enron to BP.

And America is not just bashing corporations; it's bleeding them. Is it truly fair that for its risk miscalculation (when there had never been such an event in history,) BP should be forced to pay tens of billions of dollars? Is it truly fair, as ObamaCare now mandates, to force all corporations to pay for health care not just for its employees but for non-employees? Is it fair to force corporations to give workers up to 12 weeks off each year (Marriage and Family Leave Act)? Is it fair to force corporations to retain employees with mental illness? If you ran a business, how would you feel if you were told that unless you do all of the above plus comply with a mountain of other government regulations and taxes, you will be forced out of business?

But you insist, corporations are evil--"a military-industrial complex that wrings as much production from its workers as possible and distributes the profits of their work to fat-cat executives and shareholders. If an American becomes cost-ineffective, he's replaced, perhaps with a 20-something in India willing to work for $5 an hour." You also rail, "Corporate advertising makes us buy crap we don't need, polluting our air and water in the process. What could be more evil?"

Fact is, while it's easy to point to corporations' weaknesses, I daresay that if corporations were eliminated in favor of small businesses, family farms, etc., you'd beg for corporations' reinstatement. Consider the following:

So much of what you buy and need would not be made or made affordably and with good quality in the absence of big corporations: The computer and screen you're reading this on, the car you drive or the mass transit you take, your refrigerator and what's in it: from milk to mayonnaise, Clementines to Quaker Oatmeal, bananas to the baking soda that keeps your refrigerator from stinking. Then there's the chair you're sitting in, the air conditioner that's keeping you comfortable, your coffee maker, your phone service, your iPhone, Google (which you probably used to get to this article,) not to mention the medication you take: from aspirin to heart medicine.

To make and distribute those products that you would not want to do without, corporations pay tens of millions of people a living wage, and many millions of those people, much more than a living wage--plus benefits. And of course, corporations are also forced to pay billions of dollars to comply with the aforementioned mountain of government regulations, the cost of which is passed on to all of us.

I don't have statistics but, anecdotally, I've seen again and again, that the pay, benefits, and working conditions of large corporate employees are usually better than those provided by the tiny businesses the anti-corporate crowd adores. People vote with their feet--job seekers wouldn't, for example, be lining up by the thousands (literally) whenever a new Wal-Mart opens if they felt that small companies were offering better jobs.

Workers' preference for jobs in a corporation rather than a small business is true not just in the U.S. but true of the supposedly taken-advantage-of workers in developing nations. When a U.S. corporation opens up shop in Asia, people usually flock to work for them because the pay, benefits, and working conditions are better than local businesses provide.

Of course, all enterprises--small business, corporations, nonprofits, and government--would benefit from living by loftier values but liberals' disproportionately heaping opprobrium on corporations is merely another example of their bashing society's "haves" without regard to their merit.


Jeffrie said...

Here's a Tweet I just found:

"The recent Oracle/Google mess has led to some really great reading material. Validates my 'evil by design' feeling I have about corporations"

What the hell do they think Twitter is, a nonprofit? At least THREE corporations (Twitter, his phone or computer manufacturer, and his phone or Internet service provider) made that Tweet happen.

In this post, you brought up something I've thought for years about people who hate corporations: that most of what they have today is brought to them by corporations.

The corporation has existed for centuries. Millions of people have benefited in some way or another from corporations, especially America and its citizens, and for most of us, the pros far, far outweigh the cons. To bash & denigrate all of them because of a few mistakes or bad apples, which can be found in almost any group, makes no sense.

Most people that bash corporations will keep right on bashing even if you point out that they have what they have because of them.

Cornhusker said...

Maybe people like the goods corporations produce, but they do not like working for them. It's the Dilbert syndrome.

Anonymous said...

In the case of BP, it's not one mistake. It's a longstanding pattern.

Many people don't know this, but the oil companies working in Alaska at the time of the Valdez spill had gotten together and essentially put BP in charge of cleaning up spills. Seven companies were involved, but BP controlled 51% of the cleanup firm.

They hired, then laid off, a rapid response crew. Cheaper to have fewer crews, but then all the crews were farther away. If BP-owned Alyeska had been able to honor its contract, it would have had a crew onsite for the Valdez within six hours of the grounding. The spill would have been much smaller. As it was, 24 hours into the spill, Exxon unilaterally brought in its own equipment.

In the decades since, BP has been written up for terrible safety many times and dozens have died at accidents on BP job sites (probably dozens of men, in fact.)

The recent spill in the Gulf grows naturally out of BPs history; it is not an anomaly - nor is it an anomoly of companies under pressure, always, to cut costs. This is why Fed and Cal OSHA exist, because large operations always have a temptation to cut costs. Curiously, those cost-cutting measures never seem to put the CFO in harm's way. : )

I think it's worth asking whether all calls for changes in companies' behavior are anti-corporate (the companies would like us to think so!) You quote what you say are "liberal" positions, but in fact most of what you're quoting is to the left of the Green party in the US. Except, of course, military-industrial complex, which is a warning a Republican president made back when we still had some sane people willing to serve.

Companies get huge to enormous under US law. Goldman paid 1% tax worldwide in 2008, after getting 10B in TARP funds and making clever choices about which countries to recognize revenue as coming from.

Any international corporation gets an incredibly valuable subsidy from the United States' armed forces guarantee that there will be consequences. Companies engaged in resource extraction overseas often get what amounts to publically funded security in addition to their own security services. Companies also get publically funded education of their employees and of the infrastructure they use (roads, water, emergency services.)

It doesn't seem unreasonable to make demands on them in return. Companies hire teams of professionals to strike hard bargains on their behalf; it's good business.

But it's bad when their fellow citizens look to negotiate social contracts?