Coming out of yesterday's class, I wanted to finish my thoughts from the end of the period. I know that most of us find some faults with multi-national corporations, whether its because of their ill treatment of foreign laborers, their environmental impacts, or our neighbors who work at Walmart for minimum wage. It is hotly debated whether a corporation's chief concern should be it's shareholders or whether it has any higher duties to society. In my opinion, I do feel that all companies have an ethical duty to the societies in which they do business and have a responsibility to those affected by their business practices, whether it be loss of jobs in a community from reduced competition or damage to the environment. However, I know many feel that this is philanthropic work to be done only when an executive feels inclined, so I will not argue against all corporate profit-maximization.
However, I do believe that a corporation always has an ethical responsibility to act in society's best interest when they have an absolute control of the factors necessary for development or a good which dominates a nation's wealth. This most often comes in the form of natural resources. It is one thing to say to a developing country's government that without the corporation, the state will lose some jobs and the corporation will move elsewhere if certain conditions are not met. It is a whole other matter when a corporation has so much domestic power in a country so as to be able to hold an entire economy hostage.
I am going to use the examples of energy companies. I usually harp on energy companies, not out of any real hatred of energy or oil companies in particular, it is just what I study the most outside of class. Mostly, I find them to be ethically questionable at best, but a necessary evil nontheless. Also, I have personal experience of what happens in a developing country when power shuts down because the national power company needs to "save" some money (which actually means they all get bigger bonuses at the end of the year).
The problem is not necessarily that the corporation is getting rich. In many cases this is just large-scale corporate theft of a country's natural resources, economic colonialism, or extractionism. If paid fairly for their mineral resources, some estimates predict Congo would be the richest country in the world today. Whatever you want to call it, this is wrong. However, many companies conduct their business fairly. Please note, I do not think corporations shouldn't make profits or have proper incentives. I do believe in basic economic theory. Where I find the most grevious of actions is in the influence a corporation has on a foreign state's domestic political institutions.
Here, I should also note that I don't want to start in on our own country's problems with the Citizen's United decision and corporate funding of political campaigns in the United States. I find this to be a separate issue because they are domestic corporations investing in domestic politics.
However, just imagine if China gave $10 million dollars to a presidential candidate. We would be all over them about their allegiances to the Chinese. Well, this is how I view American corporate influence on foreign state's domestic politics.
Take for example Royal Dutch Shell Corporation, which has most of the oil rights off the coast of Nigeria. Well, when most of Nigeria's economy (and government funding) come from oil, but are produced and managed by Shell and through Shell gain access to the world markets, this corporation has very great power influencing political processes in the host nation.
If ExxonMobil doesn't want labor unionization in Kazakhstan, the army goes in and breaks up protesters (all because they wanted an increase from about $2000 a year to $2800 a year). And when Shell doesn't want to clean up the Nigerian coast after it spills "only about 40,000 barrels of oil" added to the already severly damaged coastline and inland waterways, it isn't going to. And let's face it, in a free market system, it is the incentive structure (invisible hand) which forces corporations to act in the public interest.
And if the incentives aren't there? And the government is too weak to regulate the corporation? Because if the government opposes the corporation too strongly, they just shut the power off. If the "disaggreement" lasts, new political leadership will find its way to power in the next election or coup, as was the case when Chile elected socialist President Allende in 1970 and International Telephone & Telegraph (ITT) helped to overthrow him.
Certain corporations simply have too much political power in nations which are not their own. Call me crazy, but national sovereignty should be guaranteed to every nation. When sovereignty is challenged by another state for whatever reason, be it an invasion to protect human rights, a first strike defense, or some other just cause, we must look at it on a case-by-case basis to determine the legitimacy. But when a nation's future is manipulated by a foreign company with no legitimate political power, all for the sake of money, it is simply wrong.
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