December 22, 2010
-- by Dave Johnson
Are there "good" companies and "bad" companies? No, there are just companies, and companies don't have moral characteristics any more than a chair does. Here is something to understand about the things companies "do." If we LET a company "do" something, all companies HAVE TO do it. The misunderstanding of deregulation is that anything that CAN be done WILL be done. Anything.
E. J. Dionne Jr., in Even progressives need CEOs writes that it is,
... important to recognize that there is no single business class or corporate model. Obama doesn't need to coddle CEOs so they will say warm things about him at parties in the Hamptons. He should figure out which parts of the private sector share an interest in reducing the dreadful inequalities that have metastasized over nearly four decades and in creating an economy that produces well-paying jobs.
[. . .] Government policies, no matter how often we use the words "free enterprise," through design or inadvertence, inevitably affect the private economy. Why not choose policies that specifically encourage sectors that create good jobs for Americans?
The piece is well-worth reading because it points out that there are plenty of great business leaders who want to help the country address our problems and do better for our people. Mostly we hear today about the worst kind of self-interested, greed-driven business leaders because those seem to be the ones calling the shots for our economy and our political system. This is because we let the them get away with being the worst, so they rise to the top.
We need strong regulations and tough laws so the good CEOs can do the right thing, and still remain competitive.
Corporations Are A Good Idea
Last year in Why I Am Pro-Corporate, I wrote about why corporations are a good thing
The things that the corporate legal structure enables people to do are good for society. This is why We, the People decided to enact the laws that created corporations. If we want to be able to accomplish things on a large scale, like build a railroad or airports and airplanes or skyscrapers – or solar power plants to replace coal power plants – we want to enable people to more easily raise the necessary capital and amass the resources needed to get the job done. The legal structure of the corporate form of a business accomplishes this.
Corporations are just an idea. They are just a bundle of contracts. They don't do things, people do.
Do Companies "Do"? Do They "Want"?
It is the business leaders, not the companies, who make decisions and want things and do things. Companies are just things that don't "want" any more than they "do." They don't "think." They don't "decide." They don't "respond." Sentient entities want and do. It is the people who make decisions want and do things. Companies are not sentient entities any more than chairs are. And how we think about this affects the conclusions we reach.
One reason we apply these characteristics to companies is because they want us to. ("They want." There I go do it, too.) When the people who do marketing for companies (is that better?) try to make us think about companies this way, it is called "branding." They try to make us believe that a company is somehow a sentient entity because then we can think they "are good or bad" and therefore form emotional attachments that cause us to be influenced into buying their products. This is really just a manipulation and a distraction but it affects our brains. It is so important to realize that we are dealing with individual people who run companies because then we can think clearly about how to deal with the problems that they cause.
We have to understand the system, and what we are dealing with. We are dealing with people who run companies, not with companies. You can't be "pro-business" or "anti-business" because business just is. But you can require that people do the right thing.
We Need Very Strong Regulations And Tough Laws
When we complain about Wal-Mart "doing" something we are misunderstanding the system. The people who run Wal-Mart will do what we don’t stop them from doing. They have to. They don't necessarily want to. (Though some do.) That is what the system is. We set down rules, and they follow the rules. If something is not against a rule, then they don't just do whatever it is, they have to. And if they do something that is against the rules but we let them get away with it, then they will continue and others will start doing that, too.
Here is why: If Wal-Mart doesn’t then (the executives who run) Target or KMart or another company will, and then Target or KMart will have a competitive advantage, and after a while we’ll all be complaining about Target or KMart instead because Wal-Mart won’t be in the picture. They have to do everything we let them do. That is how the system works, and that is why we have to have strong regulations and tough law.
Instead of complaining about the things the business leaders do, we have to make strong regulations and tough laws to stop them and we have to enforce them. Period. We, the People have to use government “interference” and use force and that is our job and our responsibility to each other and to all of the business leaders who want to do the right thing.
It Is Not Fair To The Good, Responsible Leaders Not To
Let's say you are running Wal-Mart and you want to pay people more and want to provide good benefits. But the law does not require you to. If you do these things anyway, and your competitor doesn't, you are putting your company at a disadvantage, and you are risking the livelihood of everyone in the company. Think about the conflict and pressure that creates in good people who want to do good things. They can't do good things unless we make all the businesses do good things.
Companies are forced by competitive pressure to do the things other companies do, whether they "want" to or not. There isn’t really a middle ground. Our system of competition forces companies to do everything they can get away with, and they will do that, and the only thing that will stop them is We, the People actually stopping them.
So don't complain about things companies are doing, and certainly don't blame the companies. What do you have to do is change the rules. It just isn't fair to good people who want to do good things to do anything else. We have been letting good people down by listening to and doing the bidding of the likes of the Chamber of Commerce and the others who are fronts for the worst among the business community, who are working to corrupt our business environment and our politics.
Most Business Leaders Are Good People
Almost all corporate leaders are good, responsible and well-intentioned. For this reason they want and need clear rules that let them operate their companies responsibly. This is why listening to the greedheads who are always complaining about government and regulations is such a mistake. Most business leaders want to do the right thing and good, strong regulations and laws that are enforced let them do that. The deregulation and lack of enforcement that we see all around us today forces them to do wrong things in the name of staying competitive.
When you initially deregulate, good corporate leaders will try to be responsible and they will have every intent of doing so. They will live up to their promises. But along will come other corporate leaders who just want to make money for their companies,and more to the point, for themselves. They will do whatever we let them do to accomplish that. They will push up to and a bit beyond the exact wording of what they think they can get away with. The “good” CEOs will be at a disadvantage and will be forced to do the same.
Clear And Strong Regulations
When I ran a company I had a rule for agreements – get everything on paper and signed because the people talking about things today on both sides might get in a car wreck, or move to another company or forget or whatever and all that is left is the agreement and not the intent of the agreement. Similarly, we need to clearly lay out every little part of what can and cannot be done because that is what people will do in the end.
Business leaders want and need a clear playing field with rules that are strong enough to enable them to do the right thing and remain competitive. Let's help them out.
Posted by Dave Johnson at December 22, 2010 9:34 PM
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