Big Business Can Be Evil and Greedy, But Here's How Corporations Will Help Save  Us From Ourselves

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Illustration by Alex Fine

Corporations sometimes do bad things. Let’s get that out of the way before the calls and tweets start flooding in.

Sometimes the acts are intentional, sometimes not, but the damage was done. When Volkswagen created software that enabled its polluting cars to cheat emissions tests, that was bad. Same with Turing Pharmaceuticals, which in 2015 raised the price of a drug used to fight HIV from about $14 a pill to $750. Or when United Airlines had a customer dragged off a plane to give his seat to a crew member needed for another flight. It’s hard not to feel violated when corporations like Facebook peddle private information to marketers and political operatives, or when the former CEO of Sun Microsystems dismisses our concerns by saying, “You have zero privacy anyway. Get over it.” And while everyone tries to pay as little taxes as possible, it doesn’t seem right that Amazon and other mega-companies reportedly pay none.

FE_Business_02_508394550 Martin Shkreli, former CEO of Turing Pharmaceuticals, after House hearings about price gouging. Tom Williams/CQ Roll Call/Getty

FE_Business_03_667404586 Demonstrators in 2017 protesting the treatment of a United Airlines passenger. Scott Olson/Getty

Corporations are at worst criminal and at best arrogant and unlikable. As basketball great Wilt Chamberlain once said, “Nobody roots for Goliath.”

But corporations are damned for what they do, what they don’t do and what they maybe should’ve done. They shouldn’t be: Despite what you may hear ad nauseam on the presidential campaign trail until November 3, 2020, businesses will help save us. Lost in the list of misdeeds and daily headlines, tweets and Instagram posts lies a profound and inconvenient truth: Corporations do a lot of good. (And we’re not talking about corporate philanthropy, which is statistically a tiny part of what they do.)

They make drugs that save lives. Before 2017, a quarter of a million people died each year as a result of hepatitis C. Now, 95 percent of those can be cured. They provide quality food, clothing and shelter at prices most people can afford. In 1798, T.J. Malthus predicted mass starvation because of population growth. Today, there’s enough food for a world with eight times the current population. Corporations provide transportation, communication and entertainment. They make the world safer and cleaner and do the chores the rest of us don’t want to do.

They change as we change. PEG Africa, a company owned by a large French corporation, is providing solar energy systems on credit for residences in West Africa, replacing expensive and polluting fuel like kerosene and firewood with free and clean energy. Alcoa recycles more than 1.3 billion pounds of aluminum each year, using less than 5 percent of the ­energy required to make aluminum from ore. Nike has diverted over 5 billion plastic bottles from landfills, and 75 percent of Nike products contain recycled materials. IBM extended health benefits to same-sex couples over 20 years ago. In 2014, CVS stopped selling cigarettes, which cost it over $2 billion in annual revenue. Dick’s Sporting Goods pulled assault-style weapons from its stores after the school shooting in Parkland, Florida, and destroyed them.

FE_Business_04_128611018 Big business, in this case Alcoa, led the recycling charge. WILL & DENI MCINTYRE/Getty

We face many pressing problems: climate change, health care affordability, data security, creating good-paying jobs to replace those lost to automation and artificial technology, caring for older Americans with dementia and more. Perhaps at one time people would’ve looked to government to provide solutions, as it did with Social Security, the Interstate Highway System and civil rights. But the feds are no longer willing to step up to those big issues because of political gridlock, money or a combination of the two. In addition, the pace of change has accelerated to a point where governmental solutions are ­always one step behind, as was the case with financial ­derivatives, which led to the crash of 2008.

Someone or something else is going to need to step up, and it’ll be corporations. Because that’s what they do: Whatever the motives, they solve problems that need solving.

Corporations are so much a part of our lives that it seems like they’ve always been around, but in fact they’re a relatively modern invention. Before the mid-1800s, creating a corporation was a long and difficult process, and those who invested in one were liable for all its debts. But in 1855, England passed a law that created limited liability—and the number of corporations and their scope of operation exploded to the point that large multinational corporations now constitute one-third of all economic activities. Corporations proved particularly useful in cases where size, or what economists call scale, matters. That turns out to be a lot of things: manufacturing, distribution, advertising and research and development. Large companies were extraordinarily efficient and effective at big tasks, like laying intercontinental cables or building railroads.

In fact, they’ve become so large, and so good, that we take for granted that corporations can do anything. But they can’t. For example, even massive advertising can’t force consumers to buy what they don’t want. McDonald’s spent millions developing and promoting healthy menu options, but in 2013 then-CEO Don Thompson admitted that baby carrots and salads don’t sell. And in 2010, Campbell Soup Co. reformulated over 60 percent of its condensed soups to reduce their sodium content. It promptly lost share to Progresso and had to bring back the salt. Or ask automakers, who invested billions in building small, fuel-efficient cars, only to learn that Americans value load capacity and power more.

FE_Business_06_1038812906 McDonald’s tried healthier offerings, but it is the Big Mac that consistently brings in customers. Christoph Schmidt/picture alliance/Getty

Businesses can’t ignore consumers, nor can they ignore new technologies that boost productivity or competitive realities. But they can do a lot.

Take climate change, a very difficult problem to address. It’s big, urgent and costly, and it requires a coordinated effort by countries around the world. One solution is to reduce our dependence on fossil fuels, and corporations are leading the way in scaling up alternative energy sources. Even major oil companies, somewhat reluctantly, have already invested over $6 billion in renewable energy. On another front, a Canadian company, Carbon Engineering, is now prototyping huge industrial scrubbers that will suck air in and pull the carbon dioxide out. It’s funded by Bill Gates and Chevron. And once the technology is proven and it’s time for it to be scaled, corporations will be the ideal tool for the job.

Look at immigration. Nobody leaves home and walks a thousand miles carrying their children—or tries to row across the Mediterranean Sea in a tiny, leaky craft—because they want to. They do it because they’re so desperate that they will do anything to escape the grinding poverty of the countries in which they live. There’s a real-world demonstration going on right now that shows how corporations can give people a reason to stay home. Rwanda is small (12.2 million people), landlocked, lacking in resources and coming off a brutal civil war that ended in 1994. It has given an open door to corporations, and many, including Visa, now have a significant presence there. Visa is building an electronic payment infrastructure, creating local processing of payments and settlement services, and teaching financial literacy. It’s also providing banking to the traditionally unbanked, like women who make $2 per day, through mobile banking apps. Rwanda’s gross domestic product per capita is $2,100. That’s still not much by U.S. standards, but it’s triple that of its next-door neighbor Burundi, which is similarly sized and has a comparable lack of resources and history of civil war.

FE_Business_07_825575152 Migrants off the Libyan coast. “Nobody tries to row across the Mediterranean because they want to.” NGELOS TZORTZINIS/AFP/Getty

Or look at a problem much closer to home. Many Americans worry that democracy is under threat because of corporations. In fact, it may be safer because of them. The First Amendment makes it almost impossible for the government to control hate speech. But by responding to their consumers and using their economic vote, corporations actually give ordinary citizens a way to be heard. For example: According to Variety, approximately 20 companies withdrew advertising from Tucker Carlson’s television program on Fox in response to his anti-immigrant comments. Also, corporate leaders are among the few public figures able to stand up to extremist politicians. Traditionally, that has meant extremism on the left, but in 2017, Fortune published a list of CEOs who’d stood up to President Donald Trump over his “very fine people on both sides” comment on about the white nationalist march in Charlottesville, Virginia. It included Jamie Dimon of JPMorgan Chase, Kevin Plank of Under Armour, Satya Nadella of Microsoft, Kenneth Frazier of Merck, Doug McMillon of Walmart and Mark Zuckerberg of Facebook. Frazier tweeted, as he resigned from the president’s American Manufacturing Council, “I feel a responsibility to take a stand against extremism.”

FE_Business_12_1130231340 Protesters call for a boycott of Fox News after hosts Tucker Carlson and Jeanine Pirro make statements that were considered bigoted and racist. Drew Angerer/Getty

FE_Business_11_633250312 Ken Frazier, Merck Chairman and CEO, with President Donald Trump, eight months before Frazier's resignation from the president’s manufacturing advisory council as a result of Trump’s response to the violence in Charlottesville, Virginia. Jabin Botsford/The Washington Post/Getty

Meanwhile, Microsoft, Amazon and Expedia spoke out and supported Washington state’s lawsuit against Executive Order 13769, aka the Muslim travel ban. Corporations and courts are the only ones able to overturn onerous laws at both the federal and state levels. North Carolina repealed its anti-transgender “bathroom bill” in 2017, partly in response to economic pressures brought by Deutsche Bank and PayPal, according to Reuters. The gay rights organization Freedom for All Americans partly credits ­businesses including Apple, Salesforce.com and Angie’s List with forcing a weakening of Indiana’s “religious freedom” bill that allowed businesses to refuse service to gay and lesbian couples. When the bill was enacted, ­Angie’s List immediately announced it was halting a $40 million expansion of its Indianapolis headquarters. That got the politicians’ attention.

As for creating good jobs, many large corporations are raising—some under duress, admittedly—­entry-level salaries well above minimum wage. According to Marketplace, they include Amazon, Bank of America, Costco, Target and Walmart. Bank of America has committed to $20 per hour by 2021. In 2018, Allstate announced it was investing $40 million to help train employees for the changing economy, an approach ­pioneered by United Technologies Corp. UTC executives believed that layoffs were inevitable because of technology and economic cycles, and it funded ­“reskilling” efforts to help its employees prepare.

FE_Business_10_1072266056 Costco raised its hourly wage for the second time in a year—to $15 an hour. Scott Olson/Getty

Going forward, we can expect corporations to do more, and we should hope they do. They’re filling the vacuum left by an ineffective government.

Now, this doesn’t mean we should get over our mistrust of corporations. To paraphrase a former president, “Mistrust but verify.”

We have laws and rules that govern their behavior—hundreds of thousands of regulations according to the U.S. Chamber of Commerce. Even with all of that, it’s impossible to prevent every mistake or misdeed. More than 66 million people work for companies that have more than 500 employees. But it is possible to correct misdeeds. For that, we have a robust judicial system and, increasingly, an even more powerful safeguard—social media. Public opinion shapes corporate behavior. Nike, long criticized for working conditions in its overseas factories, in 2002 began auditing those factories for occupational health and safety. Think of it as the modern balance of powers.

FE_Business_08_175063988 A Thai factory worker carries out quality-control inspections on Nike sneakers. Yvan Cohen/LightRocket/Getty

Many liberals hate large, publicly held corporations reflexively—and you’re going to hear a lot of that rancor as the presidential campaign gains steam. But it’s time a lot of us rethought our position.

The bad guys may be the best friends we have.

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