Thursday, July 9, 2015

Corporate Greed and the "Social Mortgage"

Several articles over the past couple of days have cast a fresh light on what appears to be a deep and abiding problem in American society:  the rise of a particularly rapacious new oligarchy.
            Donald Trump was the focus of one article, based on his recent diatribe against immigrants.  Robert Reich noted on Facebook 
 “ . . . Trump has used bankruptcy and corporate laws to shield his personal fortune, allowing him to amass huge debts with little or no downside risk while enjoying all the upside gains.  Trump also made his fortune by squeezing employees . . . He typifies the modern corporate CEO who’s rigged the rules, reaped giant personal rewards, and left communities and employees stranded.” 

            This tension between corporate profit and social responsibility was reinforced by another article this week.  This one focused on the decision by the CVS pharmacy chain to withdraw membership in the U.S. Chamber of Commerce, which has been lobbying on behalf of the tobacco industry.  As The New York Times reported, “CVS, which last year stopped selling tobacco products in its stores, said the lobbying activity ran counter to its mission to improve public health.”   The report went on to say:
The New York Times reported last week that the chamber and its vast network of foreign affiliates had targeted restrictions, often in developing countries, on smoking in public spaces, bans on menthol and slim cigarettes, advertising restrictions, excise tax increases, plain packaging and graphic warning labels. The chamber’s efforts have put it in direct opposition to the World Health Organization’s efforts to curb tobacco use around the world.

            The Times noted that the chamber’s stated purpose was “safeguarding its members business interests” and cited a Chamber of Commerce statement that “ . . . we support protecting the intellectual property and trademarks of all legal products in all industries and oppose singling out certain industries for discriminatory treatment.”  In fact, it has mounted, in collaboration with overseas affiliates, a lobbying campaign against restrictions on smoking in public places and related laws designed to curb tobacco use.
            These two examples reinforce the idea that unregulated, free-market capitalism is concerned first and foremost—solely, in many cases—with profit, even when that conflicts with the social good.  Corporate greed has become an end in itself.  Too often, the idea of corporate social responsibility is simply a pretense, part of the company’s sales job but not a reality in the boardroom.  (CVS, with its decision not to sell tobacco products, is a good exception to this rule.)  The ideal of unrestricted profit leaves no room for social responsibility.  Pope Francis addressed the issue of corporate greed during his South American tour this week—the third article I read that brought the first two together. "The goods of the Earth are meant for everyone," the Pope said, "and however much someone may parade his property, it has a social mortgage." 
            The issue has become increasingly important over the past few decades, as the federal government has begun to “outsource” its responsibilities to private firms rather than create government structures to meet needs.  Perhaps the worst example was the outsourcing of military support to private companies during the Iraq war and, more recently, the outsourcing of our support for NASA to private companies, which just recently failed to launch a supply ship to the international space station.  The conflict between private gain and social good underpins the debate over the Affordable Care Act.  In the education arena, we’ve seen some for-profit companies that offer online degrees be great at attracting students with federal financial aid, but miserable at actually seeing these students through to completion.  The result is that they turn our tax dollars into corporate profit but don’t deliver the education.  That’s the “social mortgage” that any university—public, private or for-profit—must pay.