social ethics questions

2/11/22, 12:40 PMOpinion | Big Business Will Not Save Us From Itself - The New York Times

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G U E ST E S S AY

Feb. 1, 2022

By Kim Phillips-Fein Ms. Phillips-Fein is the author of “Invisible Hands: The Businessmen’s Crusade Against the New Deal.”

When Larry Fink, the chief executive of the asset management company BlackRock, wrote in his 2022

annual letter to corporate America that prioritizing environmental sustainability, racial justice and

other social goals is not “woke” and “not about politics,” he articulated anew a longstanding hope that

business can be a driver for social change.

Mr. Fink’s hymn to stakeholder capitalism — the idea that companies should engage the interests of

workers, the environment and local communities alongside shareholders — puts forward a vision in

which there is no necessary tension between private profit and collective progress.

In recent years, with traditional engines of progress so often in a state of dysfunction and gridlock, this

ideal has appealed to some liberals. After all, even with unified party control in Washington,

Democratic senators like Joseph Manchin of West Virginia and Kyrsten Sinema of Arizona have been

able to stymie legislation that would protect voting rights and take tentative steps toward addressing

climate change. And despite the increasingly favorable perceptions of unions, only about 6 percent of

private sector workers are members today — the lowest proportion in more than 100 years. Against

such a backdrop, it’s tempting to see hedge funds as a better bet.

But, however seductive it may be, stakeholder capitalism does not offer a real alternative. The ideal of

an easy symbiosis between public and private sectors would undermine the kinds of political

mobilizations, however difficult to organize and enact, that are needed for reform that benefits most

Americans.

I Wouldn’t Bet on the Kind of Democracy Big Business Is Selling Us

https://www.nytimes.com/2022/02/01/opinion/corporations-democracy.html

2/11/22, 12:40 PMOpinion | Big Business Will Not Save Us From Itself - The New York Times

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Historically, some private companies have occasionally supported goals like health and safety

legislation to protect workers or the expansion of the welfare state through unemployment insurance

and Social Security. But it has very often followed from focused, tireless efforts by unions and other

social movements to get them to take these positions — and only when the disruptions have become so

powerful that there appears to be no real choice and adoption offers companies a measure of control.

Mr. Fink’s vision is not new. At the close of the 19th century, after years of intense conflict with

workers who sought to organize unions to secure higher wages, shorter work hours and basic safety

provisions, a few business executives founded the National Civic Federation. It promoted negotiation

between executives and representatives of workers deemed politically reliable. But the federation

became increasingly focused on anti-socialist and anti-communist agitation, while the post-World War

I labor movement collapsed.

The disaster of the Great Depression prompted some companies to back greater government

regulation of economic life. Executives at firms like General Electric supported programs like Social

Security in part because they recognized that the mass movements of the era — marches of the

unemployed, sit-down strikes and other work disruptions — were potentially explosive if concessions

were not made to working-class Americans.

But this alliance proved fleeting: Companies that supported reforms in the depths of the Depression

no longer did once they saw other options. General Electric turned on its unions after a strike wave in

1946, relocating plants to the Southwest, where laws favored employers, and adopting hard-line

bargaining strategies to weaken the electrical workers’ union.

In the late 1960s, after the legal victories of the civil rights movement in the South, the rise of Black

power and uprisings of the decade in cities across the country, some corporate leaders suggested that

they would do more to try to fight urban poverty — committing to hiring and training the long-term

unemployed and to making philanthropic contributions. At the high point of protest against the

Vietnam War, some business leaders tried to rally support for ending the war; one organization,

Business Executives Move for Vietnam Peace, included almost 1,000 business leaders.

Today, some of the wealthiest Americans may be growing uncomfortable with the political

destabilization that can accompany extreme inequality, and some may be anxious about the impact of

climate change on their ability to generate profits. But this does not mean that they are eager to do the

kinds of things that might actually address inequality or provide a meaningful way forward to a world

less in danger of destroying itself. Mr. Fink’s letter may be partly born of good intentions, but the

2/11/22, 12:40 PMOpinion | Big Business Will Not Save Us From Itself - The New York Times

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opposition of the Business Roundtable (whose members lead many of the economy’s largest

corporations, including BlackRock) to potential corporate tax increases in Build Back Better played a

key role in squashing it — and its relatively limited climate proposals.

O P I N I O N C O N V E R S AT I O N

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What should our leaders be doing?

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As Andrew Perez and David Sirota have reported in Jacobin, the U.S. Chamber of Commerce has

strongly opposed any reform of the filibuster, in part because it would simplify the passage of laws

that, for example, could make it easier for workers to unionize.

A fantasy capitalism that magically balances the interests of workers, investors, communities and

shareholders has a strong allure, but pursuing it is a self-defeating strategy — and rooted in political

despair. Focusing political energy on securing the commitment of a group of business elites would

undermine the engagement of a broad democratic base that must be the real basis of substantial

reform. To address many of our deepest problems, nothing less than a redistribution of economic and

political power will be needed, and it will be achieved only over the opposition of business and the

wealthy.

The social responsibility trend in general undermines the idea of citizenship and of a public sphere as

the place where decisions and arguments over economic and social policy play out. The commitment

of business to democratic norms is pretty shallow, or at least it emphasizes a narrow understanding of

what those are.

You can see this dynamic even at BlackRock. Environmental activists have protested BlackRock for

2/11/22, 12:40 PMOpinion | Big Business Will Not Save Us From Itself - The New York Times

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years, calling on it to withdraw its investments in oil, gas and coal companies. But for all Mr. Fink’s

talk about the long-term problem of climate change, his company has been unwilling to divest from

these firms, despite his company’s 2020 pledge to halt investment in firms that earned more than 25

percent of their revenue from thermal coal. (Businesses, he wrote in defending his approach, “cannot

be the climate police,” and he called on governments to increase their efforts.)

The reality is that there is no way to bypass the arduous, contentious work of building a politics that

can sustain a more democratic culture. The only thing that brought elites to support such causes in the

past — however tentative such support may be — is the pressure of political and social movements.

Were these stronger today, the obstruction of Senators Manchin and Sinema would look like the

actions of reactionaries with nowhere else to turn rather than an intractable stranglehold on any

reform efforts. And while we might hear less about stakeholder capitalism, we would have a public

realm that could make real the idea of the common good.

Kim Phillips-Fein, a historian at the Gallatin School of Individualized Study at New York University, is the author, most recently, of “Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics” and “Invisible Hands: The Businessmen’s Crusade Against the New Deal.”

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A version of this article appears in print on , Section SR, Page 3 of the New York edition with the headline: Big Business Won’t Save Us From Itself