Analysis: "The higher Irresponsibility of Business"

The Higher Irresponsibility (Of Business)

By Edward S. Herman

“The business of America is business,” as President Calvin Coolidge said back in the 1920s, and corporate economic and political dominance today easily rivals that of the earlier period.

One indicator of business domination is the extent to which jobs depend solely on private corporate decisions in hiring and firing, investing and producing here or abroad, and on the judgment of investors as to whether inflation threatens and higher interest rates (and more unemployment) are in order. The attacks on government and the privatization imperative have put intense pressure on public employment and made it more difficult to use government as an employer of last resort. Thus, on jobs issues the government essentially marches to business’s orders. The only policy options now considered for improving economic conditions rely on increasing business profits and sales opportunities. The Republican Contract would attack unemployment only nominally, by trickledown from giveaways to business and the wealthy; the Clinton administration offers little more with its stress on deficit reduction and trade expansion through NAFTA, GATT, and bullying Japan.

A further indicator of corporate rule is the fact that although the United States has grave problems–of unemployment, wage and benefit erosion, insecurity, income and racial polarization, and increasing hostility toward and paralysis of government–business itself is not blamed. Its power is so great that the principles by which it rules are internalized and regarded as part of nature, and business has no more responsibility than God does for the evils wrought within the framework He constructed.

If one strips away the ideological blinders and looks at the workings of corporate power, however, business’s primary responsibility for our problems is manifest. Consider the following:

Restructuring, union-busting, and delocalization.

For more than a decade business has been firing workers on a massive scale, substituting temporary for permanent staff, fighting to decertify unions and prevent new ones from forming, and moving to new locales (delocalization) to avoid unions, high wages and benefits, and environmental controls. Daily firings are reported in the media with great objectivity; corporate explanations in terms of the need to remove fat in the interest of competitiveness are deemed beyond criticism. This is so even as firms report record profits and huge cash balances that hedge them against possible future downturns.

For example, this past summer it was announced that Breyer’s ice cream plant in Philadelphia was being closed down by the Netherlands multinational Unilever. After meeting with company officials, Philadelphia’s neoliberal Mayor Edward Rendell announced that, regrettably, the company “couldn’t afford” to keep the plant open (its worldwide profits in 1994 were $2.4 billion, a 19 percent increase over 1993); and that “technology [rather than a decision choice reflecting the values of Unilever executives] is costing good people jobs.” Neither Rendell nor the media suggest that business is a social enterprise of which workers are a part, and that this, and business’s vast privileges and subsidies by the state, impose social obligations to its employees that might entail business sacrifices.

On May 23, 1994, Business Week reported that business had been carrying out a “successful antiunion war” over the previous decade or so, that involved “illegally firing thousands of workers for exercising their rights to organize.” “Unlawful firings occurred in one-third of all representative elections” in the late 1980s. This was reported very matter-of-factly, although it meant that the law had been broken systematically and on a large-scale, with implicit state collusion. Illegal dismissals and the extensive use of replacement workers and professional union-busting consultants to decimate labor organization over the past 15 years has been barely newsworthy, because the sovereign power found these tactics serviceable and an uncritical media response followed.

In addition to domestic relocations, business firms have also massively shifted facilities and jobs abroad, and even obtained government diplomatic, military, and tax support to take advantage of exploitative labor markets in Indonesia, China and other countries. This subsidized abandonment of workers and communities at home has elicited no serious criticism; it is as if the victims have suffered from acts of God rather than corporate decisions that could be controlled–or the responsible parties assessed the social costs of the moves–by a theoretically democratic government.

Bargaining down government.

Businesses now regularly take advantage of their mobility and knowledge, and the financial plight and poor bargaining position of state, local, and even national governments, to extract concessions from them. Hard-pressed governments go to great lengths to attract and keep business, and the severe competition, stoked by business, makes this bidding a financial loser for most governments. A recent ~~Wall Street Journal article (April 11, 1995) described how the very profitable firm, Intel, drew the New Mexican town, Rio Rancho, into tax abatements that contributed to serious financial shortages in local schools. Intel explained that they had to bargain down sales and property taxes “to compete”; the schools were not their responsibility.

Dismantling government.

But while leaving responsibility for the schools to government, business has been campaigning for the last 20 years to “get the government off our [its] back,” by propaganda blaming government for social problems and by funding amenable politicians. Reaganomics and Gingrichomics center on radically scaling down, even dismantling, government, including aid to education, which elevates business taxes. This is what we may call “the higher irresponsibility”–don’t do it yourself on the ground that it is the responsibility of others, and then use your power so that it can’t be done by others.

Business sponsored deficits.

Reagan cut taxes on business and the wealthy, vastly increased military expenditures, reduced those helping ordinary citizens, and weakened business and financial regulation. He produced far and away the greatest deficits in history, but was under no serious pressure to cut them, because he was serving business so well. Walter Wriston, longtime head of Citicorp, was harshly critical of deficits under Carter in 1978, but found the Reagan era deficits untroubling because, as he explained, we must distinguish between capital and operating budgets (but only with a Reagan in office). This attitude of the corporate community was reflected in the responses of the New Democrats and media, tolerant of the immense Reagan deficits, but terribly agitated by deficits under less thoroughly business dominated administrations, which might conceivably serve ordinary citizens.

But the quadrupling of the national debt under the business supported administrations of Reagan and Bush must be chalked up to the corporate community, not to liberals, entitlements, or welfare.

The Racist Onslaught.

It is the Republicans, also, who have played the “race card” as their prime political instrument. Reagan’s “welfare mothers,” Bush’s Willie Horton and quotas, and the Gingrichites’ (and Pete Wilson’s) stress on crime in the streets, illegal immigrants, and the menace of teen-age pregnancy and welfare, all appeal to racial prejudice and justify attacks on people of color. As these tactics have been employed by the premier party of business, and the business community has been completely silent on the matter (and is delighted at the economic plans of the newly elected Republicans; see accompanying Box), even here we must assign the corporate community responsibility for their use.

If we have corporate sovereignty, let us clearly recognize and acknowledge corporate responsibility for our problems, as the corporate community has either contributed to them directly by its own business decisions or taken pains by capital flight, lobbying, propaganda, threats, and contributions to responsive politicians, to ensure that they cannot be properly addressed by government.