Saturday, February 05, 2011

Economic Growth and Corporate Responsibilities

Jonathan Adler objects to the President's statement on business,
Supporting businesses with this kind of 21st century infrastructure and cutting-edge innovation is our responsibility. But businesses have a responsibility, too. If we make America the best place to do business, businesses should make their mark in America. They should set up shop here, and hire our workers, and pay decent wages, and invest in the future of this nation. That’s their obligation. And that’s the message I’ll be bringing to American business leaders at the Chamber of Commerce on Monday – that government and businesses have mutual responsibilities; and that if we fulfill these obligations together, it benefits us all. Our workers will succeed. Our nation will prosper. And America will win the future in this century just like we did in the last.
If the government fulfills its “obligation” to provide a favorable business climate, there’s no need to talk about “obligation,” as business will grow and hire as they pursue profit opportunities. There are arguments to be had over the extent to which businesses have responsibilities beyond their obligation to maximize shareholder value (e.g. social and environmental obligations), but the obligation to maximize shareholder value — and incentive to seek profit — is enough for economic growth.
Adler here completely misses the issue, which is that it's possible for most or all of that economic growth to occur outside of the United States. It's difficult to believe that this needs to be explained: It's possible for a U.S. business to focus on its overseas operations, with hiring and expansion occurring overseas, and most or all of the associated economic growth occurring overseas.

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