Anti-Business? Or Anti-The Worst Businesses?

A good, socially responsible business can’t make a profit if its competitors are free to trash the environment, impoverish and injure their workers, and evade the law. Don Blankenship knows that, and that’s why he’s on the warpath against the Obama Administration:

As CEO of Massey Energy, [Blankenship] has presided over a coal company that had thousands of violations in recent years, leading up to the April explosion that killed 29 of his miners. . . . [At the National Press Club, the] CEO was asked what he could have done to prevent the deadly explosion. “I probably should’ve sued MSHA” — that’s the federal Mine Safety and Health Administration — “rather than waiting” until now, he said. In the future, he added, “you’ll see not only coal companies but many companies resist the efforts of EPA and others that are impeding their ability to pursue their careers, or their happiness.” . . . .”There’s 42,000 people killed a year on the highways,” the coal boss offered as a way to put his miners’ deaths in perspective.

As James K. Galbraith noted in his book, The Predator State, there are too many members of our political class who want to help Mr. Blankenship pursue his law of the jungle vision of capitalism. Promoters of carte blanche deregulation are not “pro-business;” rather, they’re helping one, irresponsible part of the private sector outcompete other parts of it. As Galbraith argues,

Imposing standards, and enforcing them, is . . . the general policy response to . . . the reactionary forces within business who see to maintain competitiveness without technological improvement, without environmental control, without attending to product or workplace safety. They are the forces behind deregulation.

The business community is diverse; some companies care a great deal about their workers, whereas other treat them as little more than an expendable human resource. For example, in one time period, BP had over 700 “egregious, willful” OSHA violations, and Exxon had only one. A civilized society does not allow companies like BP and Massey to gain a competitive edge by endangering workers and the environment. Only a kakistocracy accepts a kakisteconomy.

Image Credit: Poster for the film The Corporation, which includes an interview with an inspirational figure for sustainable business, Ray Anderson (the CEO of Interface, the world’s largest carpet manufacturer).

Frank Pasquale

Frank is Professor of Law at the University of Maryland. His research agenda focuses on challenges posed to information law by rapidly changing technology, particularly in the health care, internet, and finance industries.

Frank accepts comments via email, at pasqresearch@gmail.com. All comments emailed to pasqresearch@gmail.com may be posted here (in whole or in part), with or without attribution, either as "Dissents of the Day" or as parts of follow-up post(s). Please indicate in your comment whether or not you would like attribution, or would prefer your comment (if it is selected for posting) to be anonymous.

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9 Responses

  1. Todd Klimson says:

    A major source of objection to a free economy is precisely that group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

    Milton Friedman

  2. Frank Pasquale says:

    There is an interesting take on Friedman (and Hayek’s) “belief in freedom itself” here:

    http://delong.typepad.com/sdj/2006/11/milton_friedman_1.html

    “Like Friedman, Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a ‘transitional period,’ only as long as needed to reverse decades of state regulation.”

  3. Those of us who criticize all that is justified, rationalized or sanctified under the ideological slogan of the “free market” are at the very least not bewitched by an economism of values nor with absolutizing freedom above and beyond a number of other important existential, spiritual and ethical value. More than a few anarchist and socialist philosophers, for example, evidenced a deeper and wider concern with the meaning of freedom than any of their capitalist counterparts.

    And we see markets as subordinate to ends concerning both the common good and the good life, and thus not as a license for satisfying irrational, harmful or avaricious preferences that undermine or thwart the conscientious pursuit of the common good and the good life (the latter in a eudaimonistic sense, which assumes we can come up with an objective accound of goods for humans). Capitalist idolatry (‘A capitalist society is one in which the ecomony is primarily arranged for the benefit of Capital.’) is concerned first and foremost with the freedom of Capital and capitalists (consider, for instance, the high rates of unemployment and the growing gap between the wealthy and the rest of us) which is a rather distorted conception of the notion of freedom, failing to equalize the conditions and attainment of genuine freedom. As Michael Luntley reminds us, “Under capitalism life is lived not under the Authority of the Good, but under the aristocracy of capital.”

    Economic Democracy avoids the absolutization of liberty and transcends value monism: cf. David Schweickart’s Against Capitalism (1996), Joshua Cohen and Joel Rogers’ classic, On Democracy: Toward a Transformation of American Society (1983), Michael Harrington’s Socialism: Past & Future (1989), R.G. Peffer’s Marxism, Morality, and Social Justice (1990), and, most recently, Erik Olin Wright’s Envisioning Real Utopias (2010).

    I suppose if you’re fond of Glenn Beck and think Miltion Friedman was something of a philosopher, you dispositionally ill-suited to make heads or tails of William Blake’s prophetic voice: “Pray God us keep, from Single vision & Newton’s Sleep.”

  4. Erratum: “…a number of other important existential, spiritual and ethical values.

  5. Joe says:

    I think some people would argue that we’re already dealing with a kakistocracy.

  6. Is there any doubt we’ve got a kakistocracy? I recall once seeing an analysis of Congressmen’s stock investments, which pretty conclusively proved insider trading was rife. The Secretary of State, and former Senator, is well known to have used day trading as a means of money laundering. Examples of criminality are legion. As far back as Twain, the members of that institution were known to be America’s ‘native criminal class’.

    “Only a kakistocracy accepts a kakisteconomy.” Got that backwards: A kakistocracy will not permit anything but a kakisteconomy, because an honest economy lessens the opportunities for rent seeking. And that’s the fundamental problem with seeing regulation, by the kakistocracy, as a cure for corruption in business. The criminals in office do not see regulation as a means to clean up business. They see it as a means to… clean up.

  7. I don’t think we’re living in a kakistocracy. A belief in such is ideologically availing by way of citizens avoiding individual and collective responsibility for their democratically elected government and a refusal to deal with the contradictions inherent in “capitalist democracy” (wherein capitalist vices are both transparently and insidiously corrosive of both personal and democratic virtues).

    A capitalist democracy, to be clear, and in structural terms, is conspicuous for “the presence within a single social order of private property, labor markets, and private control of investment decisions on the one hand, and such formal organizations of political expression as political parties and regular elections on the other” (Joshua Cohen and Joel Rogers). Such a system is structurally prone to satisfying powerful and economically entrenched interests (what Cohen and Rogers call a ‘resource constraint’) and fostering a climate of corruption among even the “best and brightest.” “Dirty hands” is thus a structural and systemic issue inasmuch as it tends to transform the best among us into creatures of circumstance (a truth captured in the notion of ‘situationism’).

    The moral responsibility of citizens in a democracy of any kind is considerable by comparison and our society has yet to cultivate the sundry formal and informal means whereby we internalize this sense of responsibility. (One sign of such internalization would be a willingness to finally and seriously address the role of private wealth in distorting and disfiguring democratic electoral processes. Consider, for instance, Cohen and Rogers’ observation that ‘Both an unemployed worker and a millionaire owner of a television station enjoy the same formal right of free speech, but their power to express and give substance to that right are radically different.’) With a concentration of wealth at the top and the close linkages between economic and political power, a capitalist democracy can easily descend into kleptocracy in the absence of ongoing and widespread citizen vigilance. There is, in other words and in one sense (e.g., with regard to would-be democratic regimes), an important truth captured in Gandhi’s belief that “every citizen renders himself responsible for every act of his government.”

    It is a structural or systemic fact that capitalist democracy, by design and default, tends to steer the exercise of constitutionally protected rights toward the satisfaction of certain interests, interests which by definition are often contrary to the common or public good (despite the convenient proclivity for identifying these interests as serving same). This is termed a “demand constraint” by Cohen and Rogers, and is the paramount reason why the interests this system is best suited to satisfying are interests (be it those of stockholders, consumers, or workers) in short-term material gain. Moreover, as seen in the economic extortion by corporations of local and state governments or in the decimation of organized labor, “the satisfaction of the interests of capitalists is a necessary condition for the satisfaction of all other interests in the system.” And this is why, as should be obvious by now and irrespective of which party is in power, “the welfare of workers remains structurally secondary to the welfare of capitalists, and the well-being of workers depends directly on the decisions of capitalists. The interests of capitalists appear as general interests of the society as a whole, the interests of everyone else appear as merely particular, or ‘special.'”

  8. Joseph Slater says:

    Nice posts, Patrick.

  9. Frank Pasquale says:

    I agree with Joseph–very eloquent defense of hope and responsibility, Patrick.