A Beef with Unregulated Business

As I mentioned in my last post, I'm reading Fast Food Nation (Eric Schlosser). Last night I finished the chapter that effectively updates Upton Sinclair's The Jungle to document the meatpacking workplace in the late twentieth century. This chapter ends with the story of Kenny Dobbins, a man of incredible strength and company loyalty who worked in Monfort meat processing plants for almost 16 years. After surviving many horrific injuries on the job, saving another employee from being crushed by a pulverizing machine, and supporting the company in its stand against unionization, he was fired without notification and without a pension.

"They used me to the point where I had no body parts left to give," Kenny said, struggling to maintain his composure. "Then they just tossed me into the trash can." Once strong and powerfully built, he now walks with difficulty, tires easily, and feels useless, as though his life were over. He is forty-five years old." (Fast Food Nation, 2001, p. 190)

Monfort may not have broken any laws in their employment practices; their industry has influenced the dilution of workplace safety regulation over the past twenty years. 

This weekend, the front page headlines are dominated by the SEC civil suit charging Goldman Sachs of fraud. Were Goldman Sachs's actions in fact legal as they claim, it would be a condemnation of the shabby state of our regulatory system rather than a defense of their integrity. Predatory business practices across industries integral to our economy (food, health, finance, real estate) cause  incalculable real, ongoing harm to employees, customers, other businesses and the overall economy -- affecting not just our nation's stability but that of the broader global community as well. The far-reaching impact of these practices should not, however, imply a far-reaching use of these practices.

In my experience, businesses large and small are run with an emphasis on ethics, making decisions based not on what they can get away with, but rather on what is the right thing to do. They require their employees to use safety equipment and procedures not just because the business doesn't want to be caught by OSHA, or in fear of a large worker's comp claim, but because they don't want their employees to suffer the pain and loss of an injury. Having a strong agency overseeing workplace safety is, however, important to not only the nation's workers but also to the nation's businesses. OSHA and insurance companies provide the valuable service of educating businesses about potential workplace safety risks and how to avoid them. The regulatory system also functions to level the playing field: if company A incurs expenses in training and equipment to protect their workers (because it's the right thing to do), but their competitor company B does not, company A and the market as a whole have to bear the costs resulting from B's irresponsible behaviors. A regulatory system, therefore, is not an enemy of business: it functions to reduce and eliminate negative outcomes and therefore supports a vibrant and competitive marketplace.

And yet, it seems that many ethically-run, good companies sometimes fail to recognize that their interests and values are not aligned with those businesses with predatory practices that seek to influence the market, business journals, and policy makers. I am sometimes perplexed these days by the term 'pro-business,' when it is used in the context of protecting corporations that have abused the public trust. We hear a lot of talk of free markets from many who have demonstrated a willingness to act without regard to basic ethical constraints that the rest of us find binding even in the absence of a regulatory scheme. Markets without ethical boundaries become dominated by a few reckless, unethical actors. Totally unregulated markets are anything but free and competitive.

Most business people I've had the good fortune to work with want to make a positive impact on the world they inhabit. They enjoy fair competition, and like to win. But they want to win knowing that the game wasn't rigged, and that success is a function of their company's efforts, creativity, and hard work. They like to give back to the community. They take pride in and feel humbled by the success stories of their employees. I suspect that this description of business owners and managers is a portrait of legions, and depicts the majority of people who run companies not only here but around the world. Those legions must oppose the practices and influence of businesses who use the profit imperative to rationalize any unethical action.

It is vital that we understand the divisive intent behind the use of the term 'pro-business' when it is used to imply government meddling in business affairs. The real antagonism is not government against business, but between businesses whose predatory tactics destroy value and those businesses that create value.  We must acknowledge that some who have been touted as business leaders are not representative of the business community when their profits are the result of taking advantage of lax regulation rather than creating advantage through ethical and humane business practices. We, as business people, must call these others out when they seek to tilt the game in their own favor by instilling fear and outrage over what they characterize as regulatory burdens. And we must point out at every opportunity that predatory business practices create even more burdens for other businesses, communities, and markets at large.

If you run your business responsibly, and trust that other businesses do the same, you must take a stand against those businesses that abuse that trust.