The free market is the engine of our economy, conservatives like to say, so be quiet and let corporations take us for a ride. But the reminders are piling up that blind reliance on the private sector doesn't lead to a strong economy that works for everyone.
Today, NY Times business columnist David Leonhardt puts last week's Circuit City layoff in perspective:
...the company dismissed 3,400 people, or about 8 percent of its work force, not because they were doing a bad job and not because the company was eliminating their positions.
Instead, executives said the workers were being paid too much and that the company would replace them with new employees who would earn less.
It was the second such layoff at Circuit City in the last five years, and it offered an unusually clear window on the ruthlessness of corporate efficiency.
Whatever you think of the urge behind that efficiency — whether you see it as the wellspring of American competitiveness or the source of middle-class insecurity — there’s no question that it is a cause of the dismantling of the private-sector safety net that has served the country well over the last half century...
...there’s no question that corporate America is moving in the same direction as Circuit City. Companies are wringing out what they see as inefficiencies, like traditional pensions and health insurance coverage...
...The corporate safety net of the 20th century is going away, and a fundamentally different private sector will require a fundamentally different public sector.
If Big Business is going to stand down, the people are well within their rights to direct their government to stand up.
But it's not just our own economy where blind reliance on corporations fails to serve our goals. It's foreign policy as well.
We have tried to reform China by letting corporations lead the way, hoping that an injection of capitalism would automatically bring democracy and human rights too.
But that assumes that corporate executives are interested in democracy and human rights. The Washington Post's Harold Meyerson finds otherwise:
...since March of last year, [China] has been considering a labor law that promises a smidgen of increase in workers' rights. And ... the American businesses so mightily invested in China have mightily fought it...
...As documented by Global Labor Strategies, a U.S.-based nonprofit organization headed by longtime labor activists, the American Chamber of Commerce in Shanghai and the U.S.-China Business Council embarked on a major campaign to kill these tepid reforms...
...the chamber sent a 42-page document to the Chinese government on behalf of its 1,300 members -- including General Electric, Microsoft, Dell, Ford and dozens of other household brand names -- objecting to these minimal increases in worker power. In its public comments on the proposed law, GE declared that it strongly preferred "consultation" with workers to "securing worker representative approval" on a range of its labor practices.
Based on a second draft of the law, completed in December, it looks like American businesses have substantially prevailed.
This should not shock. Put corporate executives at the lead of your public policy, don't expect them to put the public interest first.
Obviously, corporations have a significant role to play in our economy. But we won't have an economy that works for everybody if we let corporate executives call all the shots.
