Tuesday, April 13, 2010

In Defense of Corporations

Citizens on the Political Left generally consider as suspect, two terms key to America’s economic greatness. Those terms, capitalism and corporation, have a mixed history in service to the “well-being” of the nation.

But as Any Student
of Adam Smith knows, nothing inherent in capitalism or incorporation creates the kinds of excesses that we, the people, have wrestled with for at least the last 150 years.

It Is Not “Capitalism” That Is the Evil.
It is the deadly sin of “greed” that is the culprit.

Some Few Large Corporations 
in America subscribe in practice to the more-socially oriented capitalist ideal. We keep our own personal list of American corporations which in practice exhibit the kind of business activities and stakeholder responsibility that would do Adam Smith proud.

Two Favorites, for the purposes of this discussion, are Warren Buffett’s Berkshire Hathaway and John Mackey’s Whole Foods:

BERKSHIRE HATHAWAY INC:
One can hardly read Warren Buffett’s annual letter to the shareholders without an appreciation for what authentic corporate stewardship means. The link below leads to 32 years of such letters. If capitalism and investment mean anything to you, you could hardly do better than to read some of these letters.

For what it’s worth, Mr. Buffett claims to vote Democratic, and believes that we, the people, through our shared government, should limit the legal ability of corporations to damage the overall society.

WHOLE FOODS, INC:
The annual shareholder letter by Whole Foods founder and current CEO John Mackey is less-direct than Mr. Buffet’s letter, perhaps. But these letters convey Mr. Mackey’s sense of a “mission” for the company, which mission goes beyond the mere issue of profit. Mr. Mackey clearly believes in using the structure of incorporation to spread his ideals of healthful living. Mr. Mackey also advocates the “stakeholder” concept, rather than the more-common “shareholder” concept that is honored more in the breach than in practice.

For what it’s worth, Mr. Mackey considers himself to be a Libertarian. He notoriously wrote a letter on health-care reform, which letter was published in The Wall Street Journal in an edited version. Mr. Mackey argued the Libertarian view that health-care is best provided through the structure of the employer. (While his perspective seems naive, given general, corporate practices in relation to employee welfare, his ideological integrity is substantiated by practices at Whole Foods.)

Corporate Links:
(In the case of Mr. Mackey’s communication, I appreciated his most-recent blog post, entitled, “Creating the High Trust Organization”)


Regards,
(($;-)}
Gozo!

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