Monday’s Mtg: Do Big Corporations Deserve All the Criticism?

We have a fun topic for Labor Day, at least if your idea of fun is coming to this group on a holiday.  The criticisms of big corporations have escalated to a crescendo since the Great Recession began in 2008.  At first glance, the reasons seem obvious.  Wall Street crashed the economy and got rescued with giant bailouts, while their executives fight new regulations.  Corporate profits are near record highs while unemployment remains elevated and wages stay flat.  Mitt Romney sneers at half of the country in front of a room full of corporate donors.  Etc.

But, are all of these criticisms really justified?  Has corporate culture really changed, or might there be other explanation  For example, maybe 21st century U.S. companies just operate in a more pitiless environment in which they have to act accordingly.  Is corporate misbehavior the disease or a symptom?  Could big companies have become– at least in part – scapegoats for public anger that should be directed elsewhere, like at our political system?  At the very least, should we not air the case for the defense, as well as for the prosecution?

I’ll open our festive holiday gathering with a quick description of:

  • The prosecution’s case.
  • The defense’s case (okay, okay. The part of the defense’s case I don’t think is ridiculous.)

I’ll preface this with a couple of ideas on how we can keep Civilized Conversation’s meetings productive and fun for all now that we have doubled in size and become, let’s say, a bit more ideological.

Discussion Questions –

  1. What are the main criticisms leveled at big corporations these days?  Which ones are new or unusual to our times
  2. What are the main defenses to these charges?
  3. Where do you come down?  Does any part of the other side’s arguments persuade you?  What about the factors that restrict corporations’ ability to be socially responsible, like the imperatives of globalization?
  4. Liberals:  Modern capitalism concentrates power in fewer and fewer corporate hands, even as it disperses economic benefits to more and more countries.  If you don’t like this, what do you propose doing about it?  Also, are you sure corporations are the problems, and not our political system?
  5. Conservatives:  How can America’s pro-market political party be pro-competition if it’s dominated by a few, big money donors?  Do Republican politicians really support free markets, or just corporate power?

Links –  [Sunday night update – Akk.  Some of these links did not work or were to the wrong article.  They’re fixed.]

Enjoy your weekend and I’ll see you there.

NEXT WEEK:  Why does the GOP keep threatening national default and government shutdown?


6 responses

  1. James H. Zimmerman | Reply

    The works of Charles Ferguson are a must read here; his book Predator Nation and his movie Inside Job.

    Here is a You Tube interview:

    I certainly agree with his thesis that these people should be in jail. The question is, Why aren’t they?

    Larry Summers, are you listening? LOL

  2. I think there are two things going on here. On the one hand, the corporation leaders are supposed to be looking out for the business interests. In a well-run organization this includes the customers and employees. So if business people attempt to influence people for the good of the business, they are just doing their job. (Much like a lawyer doing the best for his client, not for the general public or an idea of justice). But for a government official to allow himself to be influenced rather than do what is best for the people who he is supposed to represent is certainly wrong.

    On the other hand, psychologists claim that thoughts of money make a person much more selfish. I think this is confirmed in the business world. CEO’s whose prime motivation is interest in the business do a much better job of looking out for the welfare of others than those who are mainly interested in how much they are earning. But as we see, CEO compensation is skyrocketing compared to employee wages which correlates pretty well with businesses doing less for anyone except the company officers and top stockholders.

    So what I think we are seeing now is a self-reinforcing cycle where the top people have less and less in common with ordinary people and instead focus on comparing their income and net worth with each other and are dissatisfied if they think think they are getting less than they should. And since there are may ways to evaluate one’s worth, there are always ways to justify that one is being under-compensated.

  3. James H. Zimmerman | Reply

    One of the striking conclusions of Ferguson’s book is that top executives really have little contact with the real world.
    They helicopter in from their Long Island estates to the executive elevator, whisked to the executive suite on the top floor. Lunch in the executive dining room. (Ferguson has eaten in some of them. He says the cuisine is really, really good).
    Ditto on the way back home.
    That is, if they stay in the office all day. More likely, they will helicopter to the golf course and spend some time on the links.
    This is all documented in the book.

    1. Good point. It has been shown repeatedly that physical isolation from a person or people tends to create emotional indifference which makes it easier to do things contrary to their well-being. Which probably explains David’s comment about Ikea treating employees in the US worse than those in Sweden.

      The problem is not limited to businesses, however. The same thing happens in politics. If the politicians spend all their time isolated away in the Capitol building and K Street and only have regular face time with ither high level people, then it gets much easier to care about the welfare of these people and ignore that of the ordinary ones.

  4. James H. Zimmerman | Reply

    Yes, but most politicians do have quite a bit of contact with their constituents, at least indirectly and with some.
    If I understand right, the isolation of top business people has been taken to a new level.

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