Lightning Strikes Twice

Uh-oh, I almost agree wholeheartedly with Thomas Friedman again. This is getting eerie. Here's what he has to say about Corporate America and their enlightened self-interest in keeping the U.S. as competitive as possible.

America faces a huge set of challenges if it is going to retain its competitive edge. As a nation, we have a mounting education deficit, energy deficit, budget deficit, health care deficit and ambition deficit. The administration is in denial on this, and Congress is off on Mars. And yet, when I look around for the group that has both the power and interest in seeing America remain globally focused and competitive - America's business leaders - they seem to be missing in action. I am not worried about the rise of the cultural conservatives. I am worried about the disappearance of an internationalist, pro-American business elite.

Is there any company in America that should be more involved in lobbying for some form of national health coverage than General Motors, which is being strangled by its health care costs? Is there any group of companies that should have been picketing the White House more than our high-tech firms, after the Bush team cut the National Science Foundation budget by $100 million in 2005 and in 2006 has proposed shrinking the Department of Energy science programs and basic and applied research in the Department of Defense - key sources of innovation?

Is there any constituency that should be clamoring for a sane energy policy more than U.S. industry? Is there any group that should be mobilizing voters to lobby Congress to pass the Caribbean Free Trade Agreement and complete the Doha round more than U.S. multinationals? Should anyone be more concerned about the fiscally reckless deficits we are leaving our children than Wall Street?

Friedman's right about all this, but he misses one important aspect that makes this unlikely: corporations have only one priority -- maximize profits in the interest of their shareholders. So if an Indian is better educated and a more efficient worker and cheaper than an American worker, then the corporation would be actually unethical to promote the interests of their nation (hiring an American at more cost than a cheaper Indian equivalent) above their shareholders according to the rules that govern it. As horrible as it is to say, either the U.S. government can make it easier to do business here, which they have been doing, or they can create a push to regulate corporate activity internationally. Unless there is a international disciplinary regime to govern and regulate corporate activity, any laws created to impede a corporation's pursuit of profit, will result in corporate lawsuits challenging a nation's commerce laws and capital flight -- think of NAFTA and the World Trade Organization.

The thing to recognize here is that corporate power is disproportionate to that of the nation-state, because control of capital is control of live itself. (Just think about how employment drives national elections.) Unless nation-states ban together to regulate corporate activity, CEO's of any nationality will not do what's best for their nation, but what's best for their shareholders. That's corporate logic. Therefore corporations have to be forced to change that logic and make labor, the environment, and human rights just as important as shareholders. The problem is that countries are clamoring to be exploited by corporate capital, because, while arguable, it does lead to development.