Friday, June 22, 2007

Corporate Globalization

From Wal-Mart to Microsoft to McDonald's, the trend of corporate globalization has been exploding. There are good and bad side effects from these trends. I feel the negative side effects outweigh the positive side effects, but I am interested in seeing a legitimate argument for or against corporate globalization. Is it immoral, unethical, or wrong in any other way? Or is it just bad for the consumers, but otherwise permissible? Is it just "good business"?

I suspect a majority of the readers will find corporate globalization to be negative in some respects, and if so, what can or should an individual do?


Mia said...

It seems to me that globalization is not necessarily immoral or unethical as a phenomenon. Social and political globalization, to some extent, are inevitable. So, we need global politics need to be in place in order to regulate these exchanges and interactions. It seems that the moral and ethical questions will arise in the ways that globalization is regulated. I believe it is possible to keep the rights/interests of citizens intact admist globalization.

For instance, I believe that many women in Afghanistan will benefit from (or in some cases, may survive because of) globalization. We don't even need to go into all of the intricacies of history and culture and religion. We just need to realize that women and other minorities are being enslaved and tortured there. They need asylum. With globalization, they can get it. And with globalization AND time, perhaps they can one day return to a civilized homeland, where they can thrive.

Of course, corruption accompanies all of these exchanges and transactions. But, I think world with a wider diversity of ideas and goods and technologies is something worth working for.

In short, I think there needs to be a balance between freedom and regulation.

forrest said...

tcd, I have a question for you: are you thinking of a specific definition or umbrella for the word "globalization." After quickly browsing the Internet, I've found many ideas and aspects and definitions of the word. Are you referring specifically to economic? Or all political? or informational? or governmental? social, ecological, etc. etc,? Maybe all of the above?

thecrazydreamer said...

Sorry, that's a good question forrest, and I did not adequately define my topic. Or perhaps I've even mislabeled it. I am referring primarily to corporate globalization. As Mia correctly pointed out, social and political globalization is amoral and inevitable. The consolidation of business power may also be inevitable, but I am much more concerned about the trend and the consequences of that trend.

thecrazydreamer said...

Ok, this topic is just too broad and unclear. Sorry for the terrible topic. If anyone else is ready to post another, feel free to go ahead at any time.

Sweet Jane said...

Maybe you could just post a little essay for clarification. I just wasn't sure what you meant by globalization. Are you against rampant consumerism? Global corporations? I didn't how to should respond, because I didn't understand what your take was on the topic, other than that you were against it. I think this could be a fun topic if the question were a little more specific--don't give up on it yet, please!

forrest said...

ditto to sweet jane's comment. I've been doing a little research but it's going to take time. I found one interesting fact: of the 100 largest economic entities in the world, 51 are coporations and 49 are countries. Pretty crazy. Don't give up yet...

thecrazydreamer said...

Well, I don't really have an answer to my questions, but I'll try to give some examples of what I'm referring to: Wal-Mart's strategy to run local shops out of business and replace them with Super Centers, Microsoft's business strategy of assimilating new technologies (be it by buying out the innovative companies or bankrupting them), McDonald's supporting factory farms and putting local farmers out of business.

I guess what I was trying to say is that if this trend towards globalization continues, everyone will be working for one of the mega-corporations or will be unemployed. There's even efforts amongst right-wing politicians to push for privatization of all sorts of government services.

On the surface there doesn't seem to be anything wrong with Wal-Mart coming into a new community and opening a store. But its simply not a level playing field. Strictly speaking, Wal-Mart is doing precisely what it is required by law to do (which is to do whatever profits their shareholders the most). There is nothing illegal about Wal-Mart coming into a town and selling their services at or below cost until they've bankrupt all of their competition (and then of course ballooning the prices once they've established their monopoly). In capitalistic terms, it's simply good business strategy. But the whole process just seems wrong to me.

Microsoft has a consistent track record of assimilating or crushing innovative technology to keep people locked into a Windows-centric world.

Regular farmers are unable to sell their wares for profits to mega-corporations like McDonald's because McDonald's can buy the same wares from factory farms for so cheap that it would destroy the whole profit margin for the regular farmer.

What am I supposed to do about all this? Does there need to be laws? Even if there should be laws, that'll probably never happen so what else can be done? I eat at McDonald's, I shop at Wal-Mart, and I run Windows on my work and home computers, so am I to blame? Will this trend continue the way it is going? Is this just business, just an unfortunate side effect, the result of poor ethics, or just flat out immoral?

I don't really have any answers, but the questions frustrate me.

MIA said...

I think there are ethical and social problems with this corporate 'globalization'. It's a little like corporate colonialism. The big western companies realize there are goods and wealth at stake in these smaller, less developed countries.

(I'm realizing now that it seems like you're referring to the phenomenon of mega-corporations. Or just corporations in general. The above, then, is only indirectly relevant.)

The ethical problems, I think, are the same for the monopolization of certain markets by corporate giants. Companies need to be held responsible. Within a capitalist system, this usually is taken care of through market pressure. If the market is unsatisfied with the performance of the company, then it is forced to change or else go out of business. However, when the competition dwindles toward nothing, as happens with monopolies, then there is no responsibility to the consumer.

So yes, it is unethical the rights of consumers (read:citizens) are not protected (they are not afforded access to the quality of goods and services that the market is able to provide).

Further, if Joe Worker only has an option between working for Company A or being unemployed, then Company A will most likely treat him poorly they are not worried about him leaving.

As far as dealing with this, I think it's important to put your dollar where you mouth is. (hmm...) And with big business, that often means your dollar doesn't go as far.

And honestly, TCD, you live in chicago and shop at wal-mart. What, do you bus it all the way out the burbs for super-store shopping?? or have they put one in next to the art museum downtown?:)

thecrazydreamer said...

Ok, you got me. I don't shop at Wal-Mart anymore.

I guess your answer is similar to mine in that somehow the government should protect the citizens from these conglomerations forming monopolies. What I can't imagine, though is how or why that would ever occur.

First, there's no secret about the amount of corporate money in the pockets of politicians anywhere from the national to the local level. Politicians have almost universally been convinced that what is best for the largest corporation in their state is what's best for the people of their state. It's all some perversion of trickle down economics, I think. And in a sense, they're right. Any nation, state, or city that doesn't embrace the mega corporations faces major problems.

But even assuming we were to elect a whole new political regime free from the constraints of corporate lobbyists and noble in their pursuits of justice... what could they even regulate? Do they put a cap on the amount of money a company can make? Or how big it can grow? That doesn't seem to make sense. Do they it dictate to Wal-Mart that it may not undercut the prices of their competition? What can it do about someone like Microsoft who already has a monopoly? Insist that they give up some of their market share?

It seems to me like the best hope right now is where mega-corporations are doing battle with each other. Since Google has taken on Microsoft, the entire technology sector has benefit. A quick glance at the history of software would show how lazy Microsoft became once they solidified their domination of the software market; Three new operating systems in four years: Windows 98, Windows 2000, and Windows XP (2001) and then nothing for six years until this year when they release Vista. Now that they are threatened by a mega-corporation with the assets and innovation of Google, they've returned to developing again. This competition is obviously good for the consumer, but it seems to be a fragile situation at best. If Google manages to best Microsoft and win out majority of the market share, there's little to stop them from hitting the same pitfalls that accompany Microsoft.

Sweet Jane said...

This is something that I've been thinking about since I was in high school, and I'm still struggling to find an answer. Like most high-minded teenagers I it was as simple as, "Corporations are evil, and I will try as hard as I can not to support them. I will also try to get others to do the same thing." I still, to some extent, adhere to the same line of thinking, minus the last part.

I try as hard as I can (not all the time, it must be admitted) to shop local, eat local, etc. For the most part, it's fairly easy because I live in a city. While I know McDonald's doesn't really miss the twenty or so dollars I might spend there every month, I know for a fact that that twenty dollars or so a month from regular customers like me is a big deal to the guy I buy falafel from down the street.

I'm certain that if I were to debate some pro-corporation economist on this matter, she would win, fair and square. My reasons for supporting local businesses are fairly simple, and frankly not very well thought out. At the end of the day, I'd much rather give my hard-earned cash to someone I know (someone who lives a few blocks away from me) rather than to some mythical giant like Ray Crock, about whom I know nothing. At the end of the day, I'd rather buy
a t-shirt made in the US, where I can bet with reasonable certainty that it was made by someone able to make a decent living than a shirt made by an exploited worker in China.

The thing I don't like thinking about is this: say we're right about corporations being generally bad for the world. How in god's name do we stop Joe Middleclass from buying the cheap, plentiful goods that come from a corporate, global economy, when someone like me still buys her toilet paper from Target? Further, who the hell am I to tell someone like Jane Poverty that she should buy the local, organic apples that cost double the supermarket ones? I think the global situation is going to have to get a lot worse before people wake up and realize the true cost of the inexpensive widgets companies have been throwing our way.

Now let's say we're wrong, that global corporations are, in the long run, actually good for society at large. I'm still going to try my hardest to continue supporting local businesses because even if I'm wrong, I still don't want to spend my money on a shirt made by a ten-year old in Bangladesh. There's got to be a better way to do business.

By the way, I just want to say that I am by no means perfect when it comes to shopping. I have skirts from the Gap, sponges from Target, butter from Land O' Lakes, etc. I've actually just gone through a bit of a bad spell of simply not caring lately. I stink.

MIA said...

I'd just like to add, by way of clarification, that I *don't* actually think that big corporations are bad, in and of themselves, for municipalities or for individuals. It's the practices that they sometimes adopt that are bad.

I think that Jane worker *could* be treated just as fairly if she worked at wal-mart as she would be working at mom-and-pop-mart. This is clearly not always the case. But, it is possible.

We need corporations that are responsible. The good thing about climate change (if that's possible) is that the new environmental responsibility being enforced might be accompanied by some social responsibility. (maybe, in a more perfect world)

Sweet Jane said...

I don't think powerful corporations are all bad (Kellogg's is an example of a pretty stellar company with a fantastic track record), just like I don't think powerful governments are all bad. The problem with companies, as with governments, is that you run the enormous risk of having an evil dictator or an evil CEO take control. While governments exist (in theory) to serve society, corporations (and this is the frightening part, in theory), exist to serve the bottom line. The problem with our current system is that CEOs and board members have to actually choose to do the right thing, even if it means sacrificing profit. Corporate powers aren't (yet) held to any standards but market ones. An evil dictator is considered an outrage, while an evil CEO usually isn't considered as such until he or she stops making money (Enron, etc.)