Corporate Greed Found in Automakers and IBM Alike

Corporate Greed Found in Automakers and IBM Alike

October 16, 2003

"Corporate greed." There's a term that's enough to infuriate many Americans. It's not unlike saying "police brutality," "frivolous lawsuit," or "lying politician" in its ability to arouse the ire of many people. In addition, all of these terms are similar in that many members of the general public automatically assume their universal application. A person needs only to turn on TV news or open a magazine to find flagrant abuses of American capitalism. This visible minority of businesses easily overshadows the less obvious majority of firms that conduct business fairly on a daily basis and thereby generate no news. That having been stated, corporate greed does exist, and examples are provided for your investigation.

The first example comes from an unusual source, conservative political commentator Patrick Buchanan. While he may share many views with Rush Limbaugh, William F. Buckley, Jr., and a score of other conservatives, Buchanan has a major distinction. His views on foreign policy and border control are rather isolationist. He favors stringent immigration controls and opposes free trade. In 1998, he wrote an article regarding automakers shipping jobs to Mexico. According to Buchanan, General Motors was the largest private sector employer in 1950's United States. Now, GM is the largest employer in Mexico. GM has opened more than 50 Mexican plants, Ford has 11 plants in Mexico, and DaimlerChrysler has plans (as of 1998) to set up shop there, also. Volkswagen had opened a plant in Westmoreland, PA in the late 70s, but the German automaker closed the plant a few years later and moved much of its production to Mexico. The motivation for this migration? Money. For example, VW pays its Mexican workforce about $13.50 per day; that translates to only $1.69 per hour. Buchanan criticizes NAFTA (the North American Free Trade Agreement) as the enabling force which allows this job exportation to take place.

Example # 2 is provided by the progressive (read: radical leftist) US Representative Bernie Sanders who is also a correspondent at commondreams.org. Sanders's article on the site indicts computer manufacturer IBM of cheating workers out of salaries, benefits, and even their own jobs. According to Sanders, IBM cut over 5,000 jobs in the US while opening two plants in China. In addition, the computer giant cut retirement benefits and salaries for 1999 and 2000 even though the pension fund was experiencing a surplus of over $10 billion and the company was earning record profits. In those same two years, IBM CEO Louis Gerstner grossed over $176 million in salary and other compensation and set up a personal pension of over $1.1 million per year for himself.

Do the two of these cases indicate corporate greed? Most people would likely agree that this is the case. An interesting perspective on this question is given at the website of the Classic Liberal Quaker from its Principal Editor Jack Powelson. In an open letter on the site, Powelson discusses the relationship between wages and profits and the notion of corporate greed. He states that greed is not a product of large corporations; it is the sum of individuals' actions in our society. Powelson argues that both corporations and individual people seek to maximize profits from their assets, but he also asserts that strong laws are needed to "protect the common property of many."

No sane person would ever argue that corporate greed is nonexistant, even if people unfairly assume that greed is inherant in large companies. News coverage of greed and scandal in corporations may exaggerate the appearance of corruption, but that just increases the importance of propreity in protecting American capitalism.

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