The Irrational Cry Against Corporations

The Federal Reserve was founded because of poor business conduct and regulatory oversight. Its primary interest is to protect the wellbeing of US currency and the economy at large. So what went wrong?

McDonalds is pretty good and innocent example. Following its humble beginnings the company went public in 1965 and brought the world a million jobs, from the potato farmers to the logistical jobs, to all things remotely related to the Golden Arch. So why is there so much hatred against McD, or against corporations in general?

One thing worth considering before we move on is that any sane entity will be thinking of one thing and one thing only – self-preservation. A corporate entity is no different.

Business entities answer to market demands, investors, and must perform what is most profitable even if it means using lobbyist to alter policies to stay competitive or simply expand.

If McD did not do it Burger King or another fast food chain would, essentially all companies should. Businesses, by doing so protect their own interests, the interests of investors and — in a vague sense — also the interests of their employees and their families; everything is interconnected in the economy and everyone takes a bite.

From a voting standpoint, we should ask ourselves if there is a conflict of interest in an ordinary voter who is also a stock holder of McD, or any other corporation? The answer: absolutely. That person will more likely vote for someone who will support or directly vote for deregulation, the primary goals being more profit, more dividends, more pay off, self-preservation, etc… everything else is secondary.

The Fed may also be wise to let businesses have their way, because many people — or in economic terms, many jobs — are chained together, meaning that the nearly infinite amount of things which theses jobs touch are at stake. Among other things, panic is a primary enemy of the Federal Reserve and the economy at large.

Deregulation is demanded by businesses, not because it is in the best interest of the product, service, or business unit, but because businesses essentially have a gun to the back of their heads.

That gun is held by the very voters who cry when the company they invested in goes belly up.

As an example, support for deregulation of banking practices could in theory stimulate lending, job growth, and general economic wellness, but deregulation has also lead to irresponsible risk taking and consolidation. Risks are always prevalent, but the fewer entities there are, the more that risk then rests on fewer and larger entities; meaning if one mega corporation goes down it will set off a chain reaction the equivalent of an economic atom bomb.

Maybe this is when it all went wrong. We allowed ever-hungry survivalist entities to thrive and devour one another. But isn’t that the essence of capitalism? In the free market, the fittest survives, and it was this very same system that made all of these modern marvels we take for granted both ubiquitous and affordable.

Now even if one is not a stockholder, it doesn’t mean he or she is not part of the problem or solution for that matter.

In the end, it is consumer behavior that shapes business decisions and government policies. So before jumping to the conclusion that corporations or policy makers are solely responsible for our downfall, we might re-evaluate our position and the decisions we make each day in society.

We need to maintain an open mind and allow for serious consideration as to how our individual behavior can shape the course of our economic future.

See Also:

The Inside Job