Thursday, February 2, 2012

"Greed" is a Two-Way Street

A 1/15/12 article in the NJ Star-Ledger played the "corporate greed" card against a company for its decision to move its operations to Connecticut. In Corporate greed cost N.J. 250 jobs and business with deep roots, Carol Freedman condemns New Brunswick Scientific of Edison for shutting down 250 jobs in order to relocate based on tax considerations:

In late 2007, when my father was elderly and infirm, NBS was sold to Eppendorf, a German life sciences company. As difficult as it was for him to let go of his life’s work, my father was comforted by Eppendorf’s promise to keep the company in central New Jersey, supporting hundreds of workers’ families.

On Nov. 30, 2011, Eppendorf closed the doors of NBS and moved what was left of the operation to Connecticut. The state of Connecticut had lured the new owners with tax breaks, and the result was the loss of 250 jobs in Central Jersey. On the last day of work, a banner was hung on the front of the building: CORP. GREED! 250 JOBS LEAVE NJ.

What Eppendorf did to the New Brunswick Scientific company goes well beyond legitimate and reasonable corporate decision-making; it sadly illustrates the reasons so many Americans have lost faith with big business and Wall Street. There is a reason the Occupy Wall Street protests captured the imagination of this country.

Freedman doesn't define "legitimate and reasonable corporate decision-making." Nor does she tell us whether other considerations were relevant to NBS's decision. One thing is sure: considering the enormous role that government's tax grab plays in the economy, tax considerations would certainly qualify as "legitimate and reasonable" by any - well - reasonable standard.

But Freedman, consistent with OWS premises, implicitly accepts tax policy-induced distortion of corporate decision-making as the given: government can do no wrong. But not so for NBS, which "showed no consideration [and] no thanks or gratitude ... to the people who had worked for NBS for years." "Eager to take a tax break in a different state," Freedman writes, "Eppendorf [the foreign-owned parent company] broke the social compact that was supposed to typify labor-management relations for the past century — a commitment to the workers that goes beyond just a paycheck at the end of the week." Instead, this "foreign-based company" exhibited "an indifference to the lives of workers abroad, a commitment to the bottom [line]."

What about the commitment of workers to the company that goes beyond a commitment to their bottom line - their paycheck? "Social Compact" is the concept that denotes the basic rules of conduct the people of a given society mutually agree to abide by. The term originated with Thomas Hobbes, a proponent of state supremacy. It has since taken on a more generic meaning, to be defined by each given culture. The original American version upheld the supremacy of reason and its political corollary; a free nation of individuals possessing unalienable individual rights to govern his/her own life, each in pursuit of his/her own personal happiness and fulfillment, under a regime of free mutually beneficial trade. America's social compact can be boiled down to these few words; mutual respect for each other's moral right to live his/her own life.

Freedman dismisses, by omission, America's original social compact; the compact of individual freedom that led to the unprecedented, near miraculous explosion of living standards of the 19th and early 20th centuries, and the simultaneous eradication of such ancient horrors as 50% pre-industrial child mortality rates, child labor, and slavery. Instead, she refers to the social compact that has gradually been replacing the original over the past one hundred years; the compact of the socialist/fascist/statist forces; the compact of the sacrificing of the interests of some for the unearned benefit of others that gave this nation accelerating government control, diminishing freedom, and the entitlement state of America we have today.

In response, and in line with the premise I hold that capitalists must take the moral high ground that is rightfully theirs, I submitted a letter to the Star-Ledger, which was published in the print addition on 1/21/12. In the on-line version, the S-L titled it What about worker greed?. Here is my LTE (notice the accompanying picture, which creates a nice contrast:

In response to Carol Freedman’s charge of “corporate greed” against the owner of the NBS company for its move to Connecticut that cost 250 New Jersey jobs (“When business turns its back on its employees,” Jan. 15), I ask: What about worker greed?

Every year, especially in good times, millions of workers quit their jobs to pursue better life opportunities. Are they greedy for showing “no consideration” for the company that provided them with employment and a paycheck? A job is a two-way street — i.e., a voluntary contract. Both the employer and employee have a moral right to terminate that contract, consistent with its terms. In fact, neither should be condemned as greedy. Both the businessman and the employee have a fundamental right to pursue his/her own self-interest and happiness, and neither has an automatic moral claim on the other, beyond any mutually beneficial voluntary employment contract.

Michael A. LaFerrara, Flemington

I have one final point to make about the tax issue involved here. For that, I'll turn to a correspondent who calls himself eyesofsussex, who commented below my letter:

January 23, 2012 at 2:44PM

I agree with Mr. LaFerrara's view of mutual contractability between employee and company. However, that mutualness goes out the window when the company uses its profits to influence lawmakers to change the rules.

What's that you say? Employees have unions to amplify their voice? Not when the government takes that away too, e.g., Wisconsin and NJ.

Only when there's a level playing field, is there mutal[sic] bargaining power and mutual checks and balances.

I answered this way (under my S-L registered site screen name Zemack:

January 23, 2012 at 4:28PM

Excellent points, eyesofsussex, but wrong solution.

The practice of businesses, labor unions, and other special interests “influencing” lawmakers (i.e. lobbying) to attain some economic favoritism is a pervasive product of the mixed economy – the mixing of politics (government force) and economics (voluntary contract). The unsavory, beggar-thy-neighbor practice of states using tax favors to lure businesses away from other states, whether or not it is at the behest of a business using “its profits to influence lawmakers to change the rules,” argues for a legal end to politicians’ ability to manipulate the tax codes. It does not validate the granting of “collective bargaining rights,” which are not rights at all but a form of special economic favors.

Ultimately, the only answer to this kind of mixed economy shenanigans is laissez-faire capitalism – the separation of economics and state – the only system under which a true level playing field can exist because under capitalism government is restricted to the protection of everyone’s individual rights equally and at all times. Just as the separation of church and state has brought about the peaceful coexistence among people and factions in the area of religion and conscience, so the same would happen in economics, and the special interest pressure groups would disappear along with the power of politicians to dispense economic favoritism.

That said, within the current political/economic context, NBS should not be condemned. Short of constitutionally banning political manipulation of the economy, our best course of action is looking at what makes our state uncompetitive with other states, and change policies accordingly.

-Mike L.

It's time to stop demonizing modern civilization's unsung heros; businessmen. Far from being greedy exploiters, they are instead and in reality among our noblest - and most exploited - citizens. The inevitable quick-buck bad apples to the contrary notwithstanding - which exist in any field - business creates the values our lives and living standards depend upon; their self-interested pursuit of profit accomplished through the equally noble medium of trade - the mutually beneficial exchange of values. Instead of babbling about "corporate greed", think about what your life would be like without it, every time you pull out your wallet to exchange your dollars for the values that flood our markets - the very products of that very "greed."


Mike said...

two things I spotted here that I believe the writers cannot differentiate between:

1-Greed for earned and greed for the unearned

2- The right to bargain collectively is a derivative of a more fundamental right, the right to bargain individually.

Mike Kevitt said...

As for Mike's 1st. point: Since nothing's necessarily fair, earning doesn't necessarily require fairness, just choice of a person or group. The unearned is a violation of the choice any person or group, about the earned, by whatever somebody's motive, possibly "fairness". Such violation MIGHT be a crime, and that can be under cover of the guise of law and government. (Note: A determination, by any person or group, of who earns what, is, itself, a determination of who does and does not constitute a group. He who doesn't, thus, earn, is excluded. Such a person can, indeed, be better off excluded.

Mike's 2nd. point: One can gain the right to bargain collectively for a group by gaining each individual's agreement. Anybody can exclude himself from the group by not agreeing. This certainly derives from the right to bargain individually. But, bargaining collectively for a group by the recognition and physical power granted by a document which dictates what constitutes the group and disregards the choices of those thus lumped into the group, such document then legislated into position of law, is a crime, as is such document. The establishment and enforcement of that document is a crime, and that requires criminal action. Perhaps the actors don't know it's a crime and they might not think it's a crime; they might not really have criminal minds or intent, but it is still a crime and must be dealt with, considering the circumstances, accordingly.