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Chapter 4. Critics of Business. This chapter:. Explores the origins and evolution of critical attitudes toward business. Mary “Mother” Jones Opening Case. Suffered through the death of her family from yellow fever, and the death of her business from the Great Chicago Fire.

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Chapter 4

Critics of Business

This chapter:

  • Explores the origins and evolution of critical attitudes toward business.
mary mother jones opening case
Mary “Mother” Jones Opening Case
  • Suffered through the death of her family from yellow fever, and the death of her business from the Great Chicago Fire.
  • Rose to prominence as an organizer for the United Mine Workers.
  • Fell out with the United Mine Workers and became a lecturer for the Socialist Party.
  • In 1905 helped launch the International Workers of the World.
  • Eventually became disillusioned with unions, but continued to speak out.

We may forget Mother Jones, but we hear her in today’s business critics.

origins of critical attitudes toward business
Origins of Critical Attitudes Toward Business
  • Two underlying sources of criticism of business:
    • The belief that people in business place profit before more worthy values such as honesty, truth, justice, love, and piety.
    • The strain placed on societies by economic development.
the greeks and romans
The Greeks and Romans
  • The civilizations of ancient Greece and Rome were agrarian societies where most people worked the land for subsistence.
  • There was a popular belief that the amount of wealth was fixed.
  • Philosophers reasoned that profit seeking was an inferior motive and that commercial activity led to excess, corruption, and misery.
    • Plato believed that insatiable appetites existed in every person, but could be controlled by acquiring inner virtues.
    • Aristotle believed there was a benign form of acquisition that consisted of getting the things needed for subsistence.
    • Epictetus and Marcus Aurelius taught that the truly rich person possessed inner peace rather than capital or property.
the medieval world
The Medieval World
  • The prevailing theology of the Roman Catholic Church was intolerant of profit seeking.
  • Accepted the idea that amount of wealth was fixed.
  • According to Church cannon, merchants should charge a just price for their wares, opposed to our modern idea of market price.
  • Catholicism condemned usury.
  • By the twelfth and thirteenth centuries, “Commercial activity proved stronger than the fear of prison or hell.”
the modern world
The Modern World
  • The Protestant ethic – work was a means of serving God and if a person earned great wealth through hard work it was a sign of God’s approval.
  • Capitalism – free markets harnessed greed for the public good and protected consumers from abuse.
  • The wealth creation in expanding economies countered the notion that societal wealth was fixed.
  • The industrial revolution created new tensions that reinforced critical attitudes about business.
the american critique of business the colonial era
The American Critique of Business:The Colonial Era
  • The colonists who landed at Jamestown, Virginia, in 1606 were sponsored by investors who hoped to make a fortune by discovering gold in the New World.
  • The Pilgrims who came in 1620 were financed by the Plymouth Company, whose backers sought to make a profit.
  • Trade in coastal regions expanded; inland farmers created a broad agrarian base for the economy.
  • Benjamin Franklin taught that God would approve the pursuit of self-interest and wealth.
the american critique of business the young nation
The American Critique of Business: The Young Nation
  • In the late 1700s the economy was 90 percent agricultural.
  • Alexander Hamilton believed that industrial growth would increase national power.
  • Thomas Jefferson believed than an agrarian economy of landowning farmers was the ideal social order.
  • With the support of business leaders, Hamilton’s bold actions and ideals prevailed.
the american critique of business 1800 1865
The American Critique of Business 1800-1865
  • The first half of the century saw steady industrial growth.
  • Many rejected capitalism and tried to create alternative worlds.
    • New Harmony
    • The Oneida Community
  • The agrarian and socialist communes failed in practice because they were based on romantic thinking, not on sustaining social forces.
  • A farmers’ protest movement that began in the 1870s and lasted through the 1890s led to formation of the Populist Party.
  • The populists:
    • Advocated government ownership of railroad, telegraph, and telephone companies and banks.
    • Demanded direct election of U.S. senators.
    • Sought to abandon the gold standard and expand the money supply.
    • Succeeded in electing many state and local officials, but ultimately failed to forge an effective political coalition.
    • Refined the logic and lexicon for attacking business.
  • Lasted from about 1900 until the end of World War I in 1918.
  • Mainstream political doctrine.
  • Sought to cure social ills by using government to control perceived abuses of big business.
  • Progressives:
    • Used the courts to break up trusts and monopolies
    • Outlawed campaign contributions by corporations
    • Restricted child labor
    • Passed a corporate income tax
    • Regulated food and drug companies and public utilities
  • The originator of the modern socialist doctrine is Francois-Noël Babeuf (1764-97)
    • Advocated seizing the possessions of the wealthy and giving them to the masses.
    • Pushed for a violent overthrow of the French regime, but was imprisoned and then beheaded.
  • 1848 – Karl Marx and Friedrich Engels published The Communist Manifesto.
    • Argued that the basis for socialism was an inevitable process of class struggle underlying and explaining the history of human society.
    • Under capitalism the working class is exploited.
socialists continued
Socialists (continued)
  • Marx and Engels envisioned an equalitarian society that abolished private ownership of capital and instituted wealth sharing among all members.
  • Discovered historical theory that class warfare was the underlying dynamic that changed society.
socialists continued1
Socialists (continued)
  • United States of 1850-1900:
    • Child labor was widespread
    • Factories injured and wore down workers
    • Wealth and power were concentrated in great banks, trusts, and railway systems
    • Inequality between rich and poor seemed obscene
    • The masses suffered through financial panics and unemployment
    • Industrial growth created a new social working class
socialists continued2
Socialists (continued)
  • Unionization
    • Early unions tied to single companies or locations
    • 1869 - Knights of Labor set up
    • 1886 – American Federation of Labor formed
    • 1877 – beginning of violent union strikes
    • 1905 – Industrial Workers of the World (IWW) formed
    • 1912 – Peak of socialism in the United States
the great depression and world war ii
The Great Depression and World War II
  • There was a period of high confidence in big business during the 1920s, ending with the stock market crash of 1929.
  • As the depression deepened, anger at business grew.
  • Huey Long introduced a plan to redistribute wealth, but was assassinated before it could be enacted.
  • The war years washed away the populist/socialist/depression era image of the corporation as a bloated plutocracy.
the collapse of confidence
The Collapse of Confidence
  • Strong public support for business collapsed in the mid-1960s.
  • Four strong social movements attacked big business:
    • Civil rights
    • Consumer rights
    • Environmental rights
    • Vietnam war opposition
percentage of american public expressing great confidence in leaders of major companies
Percentage of American Public Expressing “Great Confidence” in Leaders of Major Companies

Update chart with new version of Figure 4.2

the collapse of confidence continued
The Collapse of Confidence (continued)
  • Theoretical “confidence gap” created in the 1960s.
  • Rising popular distrust of business gave reformers the support they needed to increase government regulation dramatically.
  • By the mid-1970s corporations had organized to fight.
  • Early 1980s – “new” progressive movement born.
    • Corporations have too much power.
    • Corporations have excessive legal rights.
    • Corporations are inherently immoral.
progressive left
Progressive Left
  • The progressive left:
    • Is highly articulated and specialized
    • Has a network structure that includes foundations, research institutes; publications; mutual funds pension funds; unions; and groups of environmental, human rights, and labor advocates
    • Together the network structure creates an organizational symbiosis.
global critics
Global Critics
  • Corporate power increasingly challenges its antagonists on the world stage as transnational corporations have grown in size and number.
  • A reaction to that growth is a substantial increase in the number of nongovernmental organizations (NGOs), which now number more than 40,000.
  • NGOs animate civil society, which is a zone of ideas, discourse, and action that transcends national societies and focuses on global issues
  • In the 1990s an antiglobalism movement evolved within civil society.
  • Antiglobalism is united against neoliberalism
global critics continued
Global Critics (continued)
  • Neoliberalism – a term denoting both the ideology of using markets to organize society and a set of policies to free markets from state intrusion.
  • Liberalism – the philosophy of an open society in which government does not interfere with rights of individuals.
  • Economic Liberalism – the philosophy that social progress comes when individuals freely pursue their self-interests in unregulated markets.
global activism
Global Activism
  • Activists attack corporations using a range of devices:
    • Consumer boycotts
    • Shareholder proposals
    • Harassment
    • Codes of conduct
    • Corporate campaign
concluding observations
Concluding Observations
  • Each era brings new personalities, new targets, and some new issues, but the fundamental language and substance of criticism remains the same.
  • Industrial capitalism is a historical force for continuous, turbulent social change.
  • Capitalism, for the most part, brings changes that represent progress, a condition of improvement for humanity.
  • A broad spectrum of criticism is an important check on business power.