Why Blaming "Corporate Greed" Is Misplaced and Naive

Edvard Munch, Workers on their Way Home, via Wikimedia Commons

It always bugs me when I see references to "corporate greed" as part of an explanation for why some bad worker-related thing is happening. It especially bugs me when lefties and progressives refer to it. Because it seems to me that referring to "corporate greed" is basically buying in to the whole "individual responsibility" anti-legislation anti-labor rhetoric that lefties and progressives usually think of as "the other side."

I was reminded of this last week when the New York Times ran this story describing how Disney laid off all these tech workers and replaced them with people from other countries on H-1B visas who would be cheaper to pay. The kicker was that to receive their severance packages, the employees had spend three months training their replacements.

In the commentary on this story, people regularly mentioned corporate greed as part of the explanation for how something like this could happen (see, e. g., the comments to this blog post). The idea being, I guess, that an ethical corporation treats its labor force as people -- people they're in a certain relationship with, and to whom they owe consideration and obligations.

It's a nice idea, but I think it fails to grapple with the deeply competitive set-up of capitalism as it exists in our world -- where it's basically guaranteed that if you're not equally ruthless as your competition, you'll fail.

In fact, in the business section of papers like the Times, the rhetoric is all about how to be nimbler and more flexible than your competition, so you can increase profits, so you can make shareholders happy. Especially if your industry is competitive, if you can't do those things, you're over.

So now, faced with that situation, the reason corporations are supposed to treat their employees well even if it costs more is ... that the people in charge are somehow good inside? And who is supposed to say "the buck stops here," exactly? The middle manager who's been charged with cutting costs? Is that person supposed to say "Oh yes, I know I'll be fired, but it's OK." Or the president of the board? Is that person supposed to say "Oh yes, I know the competition will undercut us with such lower prices that our company will go under, but it's OK."


This seems to me the same kind of "individual responsibility" thinking that props up so many ideas I find offensive, that somehow each person is supposed to rise above the crazy social pressures they find themselves in, that somehow if you decide to do something because you find it's the best of a bunch of shitty options, that somehow "Oh, well you *chose* it so you're *stuck with it*."

The pressures of capitalism are long known. Adam Smith understood that businesses would have huge incentives to collude with one another and misbehave in various ways, leading to bad outcomes. Smith figured that with the right laws and institutional frameworks, you could prevent that misbehavior. 



I don't know if that's true or if the problem goes deeper than that. But I do think appealing to the inner moral compass of individual business persons is pretty much a non-starter.