Why do so many clergy and religious activists reflexively attack the free market? Kishore Jayabalan takes a look at recent anti-business campaigns. “The very concepts of business and profit motive are often reason enough for religious leaders to condemn an activity as immoral and unethical, and criticisms of multinational corporations are just the same condemnations on a larger scale,” he writes.

However, large multinational corporations are one of the most able and efficient means of improving the economies of developing nations. Multinational corporations fight government corruption, establish banking and legal services, help to ensure basic eduation and are proven to raise the standard of living in the nations that they “invade.”

Read the commentary here.

  • Nicholas Frankopan

    Excellent article. I wish there was more commentary like this; to show responsible capitalism does far more than inefficient socialism for workers opportunities, poorer countries’ development and global environmentsal protection.

  • William Harris

    Did I miss something?

    The critique was devoid of analysis, more a grab bag of old news. Is it really the position that one should not call the largeset employer to account for its HR policies? That no moral critique can be advanced of a corporation? That seems particularly odd. Surely, in the context of asymmetrical employment relationships such as those found in a non-unionized shop like Wal-Mart, there is a place to call attention to the policies that disadvantage its workers. The corporation takes its place as part of a community and so as a participant is thereby open to critique from the same community.

    Doing business does not remove you from critique, nor does critique necessarily mean any desire for boogey-man economic solutions (aka "socialism").

    Moreover, since this letter, Wal-Mart has in fact taken up these very concerns the letter addressed — concerns btw, that were also highlighted in the press. Formally, this was likely a result of market dynamics; shoppers (like me) who have more disposable income were shunning Wal-Mart. Why? because we had heard about these practices.

    The voicing of concern creates the economic reality the corporation responds to. Because Voice (aka stakeholder concerns) can shape the social landscape for the corporation, it is of vital concern. Thus, the active role and visibility many corporations give to their community service and public relations efforts. Of course there are extremes, flakiness in this Voice, just as there are egregious violations of morality on the part of isolated companies.

  • http://www.churchicago.org John Powers

    Well William,

    Isn’t that reflected in the share price of WalMart? Given that WalMart’s current management has presided over the loss of $4 Billion of shareholder assets over the last 5 years, (an investor would have made $67 Billion by investing in guaranteed T-Bill over the same period), don’t you think that some of what WalMart does is not very smart?

    Wasting shareholders money on sops for the government and left wing activists is surely a poor investment, (if not a sin). Consider all the widow(ers)s and orphans dependent upon WalMart investments to pay for necessities, while WalMart blows their cash on PR and shaping “the social landscape”. How about making some profits instead?

    JBP

  • Steven Kippel

    Religious leaders should be speaking out against injustice, this is the call our faith has given us. When a MNC is acting against moral obligations, they should be called to answer.

    This is a terrible article, as has been said already. It doesn’t tell anything new and skews the facts abotu what religious leaders are doing. They’re not trying to enact socialism, they’re not forcing anyone to do anything, they’re just voicing their concerns over immoral business practices.

    You’re trying to make the MNCs look like victims when they’re the ones victimizing those who have no voice to speak for themselves. It takes those with a voice to speak for those without.

    My government philosophy is juris naturalis or minarchism, I’m against government fooling around in the affairs of business and religion. But I am first and foremost a Christian who has obligatiosn to speak for the poor and the oppressed. If a company is acting in an unjust manner, they should be called to answer for it by people of faith. It has nothing to do with globalism, economics, or politics, it has to do with justice, mercy and faith.

  • http://www.churchicago.org John Powers

    So Steven,

    If you have such insight into the market, what if you started a competitive business that pays living wages, and does not oppress its workers? Surely your application of “justice, mercy and faith” would be a marketing hit. Let it fly! What is stopping you?

    In WalMarts case, as you could research, or read my above comment, $10 Billion in profit is a trvial amount (3%) for a company that sells $330 Billion per year. Can you survive on a 3% profit margin? How about it…Steven, Rev. Jackson, and the 20 other religious leaders: Stop condemning others and take some responsibility yourself.

    JBP

  • Ben Teehankee

    I find the commentary quite balanced. Personally, I tend to be highly critical of big business treatment of employees, as a rule. Jabalayan gently reminds that the objective facts of each case may show that big business can do good things for people as much as small business can do bad. More importantly, he points out that work and business activity can be good for — in fact essential — for people’s development and , therefore, need not be demonized.

    My own worry is that big business tend not to do good by their people by design but often by accident or only instrumentally towards profit. While we must be fair to those who do good we must be ever vigilant to point out that the risk of big business harming people because of its preoccupation with profit (often short term) is real and all Christians and people of good will should confront such situations squarely as they arise.

  • http://www.churchicago.org John Powers

    Ben,

    As Fr. Sirico has mentioned, would Big Business then be considered less harmful to people if it became preoccupied with making losses rather than profits? Don’t profits typically follow good products, pleasant marketing, good distribution, and fair treatment of workers, while losses accompany bad products, strikes, and bad delivery to customers?

    JBP

  • Mike Mathea

    While writting an interseting overview of the issue Jayabalan never directly attacks the problem. Very simply the issue is the concept of Capital and the return to capital.
    Generally people in the religious community do not understand the importance of capital in increasing the living standards of people. The MNC can provide this capital to developing countries, but to accomplish this they must make a profit. My experience is that too many religious do not understand that increased living standards and profit are linked together.

  • Ben

    JBP,

    Profits are important for any business to achieve sustainability. However, it cannot be an overriding preoccupation.

    In a perfect information and lobby-free world, the promise of markets to give profits to only those who do things well would follow. The real world does not work this way. Thus, huge profits can be earned by companies who abuse workers (modern day sweatshops), sell poisonous products (cigarette companies), lie with their advertising, etc. Profits are not a positive proof that a business is well-run. Although I would concede that lack of profit is a fairly good indication that a business is not well-run.

    The key is to achieve the profits AND to achieve humane treatment of employees.

  • http://stbarbara.blogspot.com John Powers

    Hi Ben,

    I recommend that you read some of the white papers on this Acton site. It is loaded with information as to how individuals use their own good sense to make good decisions.

    I am not a fan of sweatshops, cigarettes, or lying in advertising, so in my business, I avoid them.

    However, perhaps sweatshops are a relatively decent place to work vs the alternatives, and an aging person gets some relief from migraines via a cigarette, or drinking Budweiser actually gives one increased appeal to the opposite sex.

    Who am I to judge what others think is a perfectly legitimate decision? The burden of proof in making regulation should be on the regulator, and the bar should be set very high on intruding on others property for the sake of one mans morality.

    JBP