Cafe Hayek: McGovern on Corporate Responsibility

« Immigration and Assimilation | Main | What determines wages» Russell Roberts

May 24, 2006

McGovern on Corporate Responsibility

Russell Roberts

In this LA Times op-ed (HT: It Shines For All), George McGovern takes labor union leaders to task for demonizing Wal-Mart and other unproductive strategies:

I understand the attraction of asking business — the perceived "deep pockets" — to shoulder more of the responsibility for social welfare. But there are plenty of businesses that don't have deep pockets. And many large corporations operate with razor-thin profit margins as competitors, both foreign and domestic, strive to attract consumers by offering lower prices.

The current frenzy over Wal-Mart is instructive. Its size is unprecedented. Yet for all its billions in profit, it still amounts to less than four cents on the dollar. Raise the cost of employing people, and the company will eliminate jobs. Its business model only works on low prices, which require low labor costs. Whether that is fair or not is a debate for another time. It is instructive, however, that consumers continue to enjoy these low prices and that thousands of applicants continue to apply for those jobs.

Maryland recently passed a law aimed at requiring Wal-Mart to spend more on health insurance. This is an extremely flawed path to healthcare reform. We need universal coverage, not piecemeal legislation designed to punish companies because they operate differently than their competitors.

The fact is, demanding more from business based on sales or the number of employees is not always the best way to achieve a just result.

I would have said "never" instead of "not always" in that last sentence. But who's complaining. This is the second "pro-business" piece I've seen by McGovern. The first was written years ago after he had been running a business and found the regulatory requirements to be rather onerous. And of course it's not really "pro-business," a label I despise when applied to thing I write. It's just anti-anti-business, which is really not the same thing at all.

Posted by Russell Roberts in Wal-Mart, Work | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d834518ccc69e200d8342bb84153ef

Listed below are links to weblogs that reference McGovern on Corporate Responsibility:

» George McGovern Supports Wal-Mart from Eli Dourado
Really. The octogenarian former Senator thinks liberals shouldnt attack big business in pursuit of their hippie socialist paradise. Thanks to Russ Roberts at Cafe Hayek for the pointer. ... [Read More]

Tracked on May 24, 2006 6:30:06 PM

» McGovern learns economics from The Everyday Economist
Former presidential candidate George McGovern on Wal-Mart: Many of my friends will consider this view heretical. But it is based on stark reality It can be galling to hear companies argue that they have to cut wages and benefits for hourly work... [Read More]

Tracked on May 24, 2006 7:22:18 PM

» World-gone-mad alert from To begin with . . . everything
At The Club For Growth, Andrew Roth praises Barney Frank; and at Cafe Hayek, Russell Roberts has [Read More]

Tracked on May 24, 2006 7:41:55 PM

» Corporate Social Responsibility from Corporate Social Responsibility
The application of the principles of Sustainable Development through the introduction of a CSR policy is often... [Read More]

Tracked on Jun 3, 2006 12:40:06 PM

» Ways to make money online from Ways to make money online
Pharmacy degree requirements Double bonus video poker strategy Nfl betting locks Toy slot machines <... [Read More]

Tracked on Jun 15, 2006 11:51:51 AM

» Philadelphia college of pharmacy and science from Philadelphia college of pharmacy and science
Zoloft and effexor Real estate insurance Mortgage income fund Fico credit rating [Read More]

Tracked on Jun 20, 2006 12:40:30 PM

» Loan officer job description from Loan officer job description
High cost of health insurance Insurance and quotes Texas holdem tournament tips Ho slot car sets [Read More]

Tracked on Jun 21, 2006 5:09:34 AM

» Equity line of credit loans from Equity line of credit loans
Bad credit equity loans How do credit cards work Napster ring tones Prescription drug plans [Read More]

Tracked on Jun 21, 2006 9:42:45 AM

Comments

I hate the term pro-business. There are people who are pro-business, but those who favor the free market are not among them, and are usually accused of being so. Just as the "left" likes to lump the "right" in this country in with fascists, so do they lump together pro-business and free-market.

Fascists are "pro-business" in the sense that want government to have a heavy hand in it; but a hand that lifts it up and uses it against the people. The left call this "right-wing" and say that its "right-wing" because the right like business.

But the right in this country are free-market (old liberal). Free marketers are against the government having any influence on business. This may be good or bad for any particular business, but it good for business overall, just as it is good for workers; it is good for the economy overall.

The left wants government to have a hand in business too, though they want to squash it a lot and the extreme ones (socialist and communist) perhaps want government to take it over completely. They say this is "pro-worker" and even "anti-business." Of course being anti-business is ultimately anti-worker, but that is a separate issue.

In any case, both the fascist and the socialist want government to regulate business - just for different reasons and perhaps in slightly different ways. Whatever the motivation is, regulation is regulation. Any policy that regulates will have to do so in such a way as to allow the business and the workers to survive. It makes more sense to lump together all those who prefer regulation than to lump one of them together with a group that wants government to completely stay out of the market : the free marketers.

So please, do not say that free marketers are "pro-business" and please avoid using the term without a disclaimer.

Posted by: liberty | May 24, 2006 7:18:37 PM

Sure, pro-business...except the bit about universal health care....wonder how that will be paid for......hmmm...corporate taxes maybe?

Posted by: Patrick | May 24, 2006 8:09:26 PM

Pro-business?

"Maryland recently passed a law aimed at requiring Wal-Mart to spend more on health insurance. This is an extremely flawed path to healthcare reform. We need universal coverage, not piecemeal legislation designed to punish companies because they operate differently than their competitors."

Hello? Socialism!

Posted by: Keith | May 25, 2006 11:27:24 AM

http://blog.russnelson.com/economics/maryland-idiots.html
http://blog.russnelson.com/economics/medical-insurance.html

Eventually I'll get to the point where I never have to say anything to anyone .... I'll just point them at a previously-written blog posting.

Posted by: Russell Nelson | May 27, 2006 2:01:46 AM

Corporate social responsibility is so Hayekian! It is certainly more efficient for successful corporations to deal with social needs within their purview than to expect bureaucratic government to do it. And do we want heavy-handed government to dictate to corporations what they have to do to be good, socially-aware corporate citizens? Of course, you want neither the government nor corporations to be involved in the business of social responsibility. You are at least consistent. When was the last time you wrote about the evils of corporate social/environmental exploitation? You seem to have no trouble with that for some mysterious reason. Do you remember Poletown? GM wiped it off the face of the earth as a result of its greed and overwhelming power and influence.

Posted by: Trumpit | May 27, 2006 5:11:36 PM

Honesty, integrity and a persuasive mentality are the most important qualities of an elected official
http://copegus.kadm.biz/index.php?qq=copegus copegus

See you

Posted by: ansaid | Jul 14, 2007 6:10:57 PM

Restrict every household to 60 gallon can on trash a week

Posted by: candy printable valentine wrapper | Aug 13, 2007 10:59:37 PM

Sex offenders should be, should not be castrated

Posted by: bed frame poster | Aug 25, 2007 4:52:53 PM

An integrated, segregated society is better

Posted by: dealer discount tire | Aug 27, 2007 5:19:43 AM

Buyers of guns must take gun-safety courses

Posted by: average condom size | Aug 30, 2007 12:10:54 AM

Prejudice will always be a part of society

Posted by: university | Sep 3, 2007 9:41:32 PM