Corporations are motivated by a desire to maximize profit. But too often in America today, the profit motive doesn't coincide with values that we know we want our corporations to have. What you have to do to make the most profit almost never lines up with what you have to do to treat customers well, compensate employees fairly, or minimize negative impact on the environment.
Bad Customer Service
Fifty years ago, if you ran a small store and you mistreated a customer, that customer would complain to his friends and you'd lose a significant amount of patronage. The customer was "always right" because positive word of mouth was essential to the success of most businesses.
But when you're a 21st century nationwide conglomerate, you'll often find that a more effective business strategy is to get the customers in and out as quickly as possible, with minimum effort from your paid labor. So when a dissatisfied customer disrupts the quick and steady flow of things, all you want to do is get him out of the way and make room for the majority of customers, the ones your product or service successfully satisfies.
Bad Employee Compensation
It's profitable to pay your low-skilled employees their market value of $6 an hour instead of a realistic living wage of $15.
This news story talks about Wal-Mart as a textbook case. From the article:
Wal-Mart brags about how its low prices help poor Americans, but its low wages are helping increase the number of Americans in poverty.
Bad Environmental Policy
If you're a corporation, it's profitable to screw over the environment. For example, think about the packaging a corporation decides to use for its products. The decision is made based on what is attractive to the customer, and what is low-cost. It doesn't affect the bottom line if the packaging isn't bio-degradable. It certainly affects the communities where landfills are built, but that is not the corporation's concern.
What's Good for America
Many people will agree with a statement like this one:
What's good for business is good for America.
But now you can see why that's wrong. What's good for corporations is increasing their bottom line. The actions that cause corporations' bottom lines to increase may or may not be good for America. They might be good if:
Corporations increase their bottom lines by being more productive, and selling more goods for the same production costs. If the trend is that more goods become affordable to the average American, then it could be good for America by increasing the quality of life.
Corporations are able to increase their bottom line through a process that also requires the hiring of well-compensated employees. That way, something that's good for corporations will create more jobs.
It could be good for America by a coincidence. For example, a tax break for one business might enable them to expand, and in the process they tear down their old factory and build a better, modern one, and its newer technology emits fewer pollutants, ozone-depleting agents, and/or greenhouse gases.
Likewise, what's good for corporations could be bad for society if:
A tax break to a corporation lowers its costs and increases its profit margin. The board of directors votes to use this new profit to increase the CEO's salary, and buy a round of private jets for other executives. This doesn't help America at all. This kind of thing is actually a growing trend in the 21st-century economy, and it is creating an obscene concentration of wealth. You can say that it helps the companies that sell the jets, but that isn't necessarily good for America either.
A corporation might find a way to cut costs by using a new technology, such as a new type of robot. As a result, it will fire its workers by the thousand. This is also a huge trend that contributes to the increasing concentration of wealth, and the increasingly robotic nation.
It could be bad for America by a coincidence. For example, a corporation might use money from a tax break to lobby for deregulation of its industry, which is bad for American consumers. (The corporation might also use the money to lobby for more tax breaks.)
The Government's Role
The government's role should not be to simply promote whatever is good for business. The government's role in regulating business is to create policies that cause corporations' profit incentives to line up with positive social goals. For example:
The government can aggressively investigate incidents of treating customers unfairly, and fine guilty corporations. That way, customer service will be more linked to profit margins.
The government can raise the minimum wage. That way, companies that can afford to pay employees a living wage can no longer use part of that money to increase a few executives' already high salaries.
The government can make the air a finite commodity, like land, that belongs to the people. It can charge corporations for the privilege of dumping waste into the air, which can only hold so much pollution before it poisons us all to death. The government can also create a law that forces corporations to take responsibility for their products' end-cycle costs, and eliminate all landfills.
Corporations don't benefit society by making profit, they benefit society when they improve the average American's quality of life. But corporations are designed to only strive for the former, so it is the government's role to line it up with the latter.
