Two oft-repeated assumptions about big companies in market economies:

  1. Corporations pursue profit by all means without regard to concerns for ethics, the environment, diversity (racial/gender/socioeconomic), and community externalities.
  2. Corporations consistently underpay minorities and women for doing the same work that white men do.

I see these as contradictory. A vast amount of literature shows that diversity at a company is good for its bottom line. Having more women and people of color in an office is good for everyone’s productivity and increases the likelihood of good ideas that are essential for keeping a company strong. Furthermore, if a company¬†was only concerned about its bottom line, it’d only employ women and minorities (much cheaper!). The obvious reality is that companies do pursue profit, they do discriminate against women and minorities, but they engage in behavior that is not always profit-maximizing.

Consider an alternate proposition:

  • Corporations pursue profits in an environment that is constrained by the prevailing culture and ethical norms; sometimes that culture leads to discriminatory behavior and sometimes it means putting ethics over profits.

This means that if the higher-ups at a corporation come from a culture that gives them implicit bias towards men, white people, or those that went to their alma mater, hiring decisions will be made that reflect those biases even when it is against the self-interest of the company. At the same time, culture can also influence business decisions that put ethics over profits. Price-gouging during a natural disaster, for example, might not happen (even if profit-maximizing) because cultural norms shun such behavior.

Essentially, prudence is not the only thing guiding human behavior, even if economic models often suggest so. What’s interesting to me is the overlap of people who a) attack the utility-maximizing framework of mainstream economics as being oversimplified; and b) say that people in a “capitalist” economy are purely self-interested.

 

 

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No, I haven’t seen Capitalism: A Love Story yet, so I can’t give an honest review of it. But I have gathered a few things from the people who personally have seen the movie. First of all, Moore concludes it with:

Capitalism is an evil, and you can’t regulate an evil.

Woo, doggies. I really like capitalism.

One teaser for the movie is this video:

There, Mikey, is mistake #1. Capitalism’s passionate and true defenders were against bailouts. They also are against giving any specific private entities like corporations special preferences. There’s a huge difference between crony capitalism and the true capitalism that I and other libertarians argue for.

Honestly, I probably won’t see the movie. But I thought I should write about such a glaring mistake.

So, reports say that organic food isn’t healthier for you than other food. We hate to break it to the birkenstock crowd, but organic food is also, more often than not, owned by big huge evil corporations. Even if you’re pretty sure that’s not true for some products, guess again:

“The large companies go to great lengths to hide that they’re the owners,” Potter said from his company’s headquarters in Clinton, Mich. “There’s a great deal of effort that goes into shielding that from the public. There’s smoke and mirrors in the marketing of organic foods.

Even when it’s not General Mills or Kellog’s owning it, ¬†huge companies like Horizon usually control the market. 20% of organic food even comes from China, so the whole “local” argument doesn’t always stand up either.

People buy organic for many other reasons, though. But the idea that it’s better for the environment, promotes better employment practices, or tastes better are all wrong too. We’ll get to that later, though. In the meantime, check out a pretty good overview of some arguments against organic food here.