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Thursday, October 17, 2002

The Moral Corporation-Part I-Wal-Mart and Sweatshops-I'll have more on the topic of the morality of the modern corporation and the free market, but this exchange I oversaw tonight got my mind going. I hope I don't get a third-man-in penalty, but I wanted to critique this piece from Richard Hall, who has had a give and take with Joel Fuhrmann over various economics issues.
Joel (for 'tis his name) states his position succinctly:
As a free-market advocate, I believe that capitalism is the economic system most able to provide for the well-being of humanity.
I might agree with him if I had ever seen a genuinely free market. But where is this mythical beast? The question is not whether markets should be interfered with, because that's a given - markets are routinely tinkered with.
"Serve the customer and make a profit" is in the first chapter of the Marketing textbook. Corporations also are indirectly accountable to their customers; if they don't produce a quality product at a fair price, they won't stay in business long. If they don't make a profit, they won't stay in business long. If they don't pay their workers wages comparable to what they can get elsewhere in the community, they won't have workers for long.
Of course, they have a duty to obey the law, but they evade responsibility both by operating in countries which don't have sufficient infrastructure to police their activities and by "obtaining" political influence at home. History demonstrates (at least to me!) that whenever corporations achieve positions of dominance, the "free" part of "free market" comes to mean being allowed to get away with what they like.
Laws vary from country to country; many countries choose to have different labor laws that fit their economy better. You also make a jump from influence to dominance. Please name an American company that has such a "position of dominance" that they are immune from all American laws.
Micro$oft has no interest in a genuinely free market in software. News International dominates and controls a significant proportion of the media; farmers worldwide are not free to sell their produce because the markets they operate in are controlled by 4 huge companies and it is they who dictate prices, not the producers.
I agree with you with Microsoft, and you could easily add AOL-Time Warner and Disney to News Corp (Rupert Murdock's company) as media conglomerates that make me a tad bit nervous. The four big agramonsters are ADM, Cargill, and who are the other two? If I know who were dealing with, I might have a better handle on your claim. They might depress prices due to some oligopoly power but "not free to sell their produce" seems a bit overblown.
I returned recently from the USA and while there I did most of the shopping at Wal-Mart, famous for squashing competition and dominating local markets. Freedom? Only for Wal-Mart.
It's helpful for the people in those towns who can save money there. Wal-Mart does a number of small-town mom-and-pop stores who don't have Wal-Mart's economies of size. Do we subsidize the small stores or ban the megastores from existing? That doesn't just transfer wealth from the Wal-Mart to the mom-and-pop, but transfers wealth from the other citizens of the town to the mom-and-pop due to having to pay higher prices for their goods.
Of course Joel is right when he says that nobody like injustice. But I don't agree that it is as difficult to define injustice as he suggests. "Justice" and "righteousness" are closely linked, so closely that St Paul uses the same set of words for both. So what we're looking for is not adherence to some law over which we have to agree. The call of God on his church is to be a prophetic voice for righteousness in the affairs of humanity - public and private. Certainly this will be open to mockery and may bring us into conflict. But it's in the church's job description. And the claim of the Kingdom of God upon us must always be stronger than our allegiance to any system or -ism, no matter how much we may believe in it.
We're in this to do the right thing and are striving to find what that is.
Just one more thing for now. I'd like to think that the rightness (or otherwise) of our employment practices is based on a bit more than economic expediency. We don't employ children in British factories because there is a consensus that it is wrong, not because "we don't need to". There is all the difference in the world between children working on a subsistence farm and them being put to work for 12 hours a day in a western-owned factory in South-East Asia. At least, it seems so to me.
If depends on what the alternative is. If the alternative is to work for 12 hours a day for half the price in a locally-owned sweatshop, then the Nike job would be an upgrade. In many places, we're not prying them out of the classroom but from other, lesser-paying jobs. If the result of economic activity is to improve people's live, even if it from atrocious up to lousy, then it has done some good. More on this area later.

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