Published on Friday, January 26, 2001 in the International Herald Tribune
The Business of Business Isn't Principally the Common Good
by William Pfaff
DAUFUSKIE ISLAND, South Carolina - The Bush administration will meet its first congressional test from inside the Republican Party. Arizona's Senator John McCain introduced his campaign finance reform bill on Monday.
"There's one thing that people are unanimous about," Mr. McCain said in introducing his bill. "They want their government back."
However, his reform, if adopted, would only marginally reduce the influence of corporate wealth in American public life. Existing legislation and the role that television now plays in the U.S. system have created what amounts to a probably irremovable American plutocracy.
Doctrines of campaign impartiality, and requirements for the free broadcast discussion of public issues that date back to the Federal Communications Act of 1934, have been repealed or have been undermined by a Supreme Court ruling ratifying unlimited spending on partisan campaign advertising.
The existing legislation favors incumbents and pleases corporate lobbies. The Republican leadership would like to delay the bill as long as possible, in hopes that the reform effort will fade.
The leadership and the president want a provision attached limiting labor union electoral action. Business interests have been campaigning for a long time to block "labor bosses" from using union money to support the political campaigns of pro-labor candidates, on the grounds that union members are not individually consulted on this use of their money.
The political influence of the union movement today is more restricted than at any time since the Wagner Act of 1935, which first affirmed the right of labor to bargain collectively. Corporation stockholders are not individually consulted by "management bosses" on their use of corporate money. But that, as the Republicans say, is different.
Does it make any difference that America has fallen so completely under corporate influence? This may seem a reasonable question to younger Americans who have lived the "long boom" and argue that the country has prospered under the business-dominated policies of the Clinton administration and the Republican administrations that preceded it.
The response is that corporate influence is not limited to business or economic matters (and has not always been constructive even there).
Today there is highly publicized conflict between business and science over global warming and other environmental issues.
Corporations and the Republicans are at odds over boycotts and sanctions. Businessmen want business, not sanctions.
Aerospace executives want government weapons purchases and subsidies. Their industry thus promotes military solutions to foreign problems. It publicizes improbable foreign threats that require high-cost systems of defense, even when these measures would undermine arms control agreements and alliance relationships.
Basic political principle says that one powerful interest group should not control the major decisions of a country.
The normal and proper aim of the corporate community is to make money for its managers and for the owners of business. All the better if its members also contribute to the general prosperity. However, business acts on the prevailing business philosophy, which claims that corporate self-interest eventually produces the general interest. This comfortable belief rests on misinterpretation of the theory of market rationality proposed by Adam Smith.
He would have found the market primitivism of the current day unrecognizable. He saw the necessity for public intervention to create or sustain the public interest, and took for granted the existence of a government responsible to the community as a whole, providing the structure within which the economy functions.
Classical political thought says that the purpose of government is to do justice for its citizens. Part of this obligation is to foster conditions in which wealth is produced. The obligation is not met by substituting the wealth-producer for the government.
Business looks after the interests of businessmen and corporation stockholders. Stark and selfish self-interest obviously is not what motivates most American businessmen and -women, but it is the doctrine of the contemporary corporation and of the modern American business school.
It does not automatically serve the general interest, as any 18th century rationalist would acknowledge - or any 21st century realist.
© 2001 the International Herald Tribune