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Notes on the Fallacy of a Non-Political Business

Posted by Rebecca Kneen on

Everything is Political

Business measures its success by the amount of profit it generates – maximizing shareholder returns, in corporate-speak. Normal business practice is to do anything and everything to make as much money as possible. This business status quo is exploitative, individualist, and in political terms, rightwing and capitalist (since capitalism defines itself in economic terms). Although this is blindingly obvious, it needs to be stated out loud because too many business owners claim that they are “not political”. All this does is prop up the ubiquitous politics of the status quo and draw a curtain over the innate politics of capitalist enterprise.

The basis of this political ideology is that competition is the main human driver – all humans care about is their own individual benefit. Competition in business means driving everyone else out of business altogether, resulting in a complete monopoly. Winning is a zero-sum game: in order for my business to make money, you have to lose.

Normal business practice maximises profit by raising prices as high as possible while minimizing expenses. Expenses are reduced by using the cheapest possible labour, supplies, transportation and land prices. In real terms, this means paying wages that are as low as one can get away with – whether by using part-time labour or temporary workers to avoid minimum wage, lobbying for a minimum wage that is below the poverty line, or moving offshore where wages are lower. Shoddy goods and poor quality ingredients are shipped by truckers forced to drive 18 hours a day to make a living, while prices for those goods are driven lower and lower. Vertical integration, where a company owns the entire supply chain for its goods, allows businesses to profit from every stage of the production process, while also controlling the market and therefore driving prices lower.

The standard business model values profit over social responsibility and individual financial gain over community health.

This control of the economic environment goes along with control of the social environment. Like vertical integration, the goal is for a business to have enough ownership or influence to force their business plan on the rest of society (as in the case where it is possible to pay below minimum wage because either you are the only employer in town, or you have lobbied successfully for laws that allow you to skirt minimum wage requirements). The less overt this control is, the better, for it hides corruption behind the law.

The other great tool to minimize spending is to externalize social and environmental costs, by making the government take on the expense of maintaining infrastructure, health care, environmenal protection and cleanup, as well as subsidizing primary producers (ie. logging, farming, fishing) so they can continue to sell below the cost of production. Thus we have mining companies that continually dump toxic waste and leave it behind without paying the cost of remediation. On a smaller scale shipping by road offloads the cosat of maintenance to the public while rail is  private and the full cost is paid by the user.

At the same time, of course, business lobbies hard to ensure that corporate taxes are lowered, so there is less money to pay for the infrastructure from which they benefit. This results in the ongoing degradation of the public infrastructure, from roads to hospitals, schools to water systems. We see this most clearly in highway maintenance, which is contracted out to the lowest bidder who will, more or less, meet the lowest standard (and maybe not even that much).

The practice of minimizing expenses by lowering wages creates poverty for the community and wealth for the business. The ideological claim is that this is ameliorated by the “trickle down effect” in which the wealthy spend their money thereby enriching everyone else. Which is a lovely idea, except for the not being true part. The top 20% of earners spend a significantly smaller proportion of their income (and total dollars) than the remaining 80% - so there’s less money flowing around the economy as income disparity increases.

The standard business model values profit over social responsibility and individual financial gain over community health. This is a political value statement.

Politics encompasses our entire social structure: economics, social relationships  and governance. Business associations routinely express political views. The Chamber of Commerce in BC actively opposes raising the minimum wage, and couches its objections in language that encourages the class divide between owners and workers while it supports widening the economic divide. The Chamber also claims to have “no duty to consult with First Nations (sic)” on land use and resource extraction issues, on the stated assumption that ownership is already established and with the clear desire to avoid social and economic responsibility. Both of these policies do more than express an imaginary neutral status quo: they actively support economic exploitation and the right wing ideologies of individualism, social control, racism and classism.

Unfortunately, many business poeple don’t realize that their basic structure is political, and don’t see how it often runs counter to their actual personal socio-political views. This disjunction makes it very hard for people to do and say what they really feel, and creates some very strange adaptations. Often, businesses will simply avoid examining the issue at all – hence the “our business is not political” claim. Other people try to undo the damage they are causing by donating to charities – they try to make up for paying poor wages by donating to the food bank (yes, that’s WalMart) or have giant charitable fundraisers to pay for cancer wards resulting from the toxic waste from their own industry. Instead of expressing their values in their daily life and business structure, they continue to increase profits at the top while getting a tax break for helping alleviate the poverty for which they are responsible. (**** see next political rant in series)

Instead, why not change your business model so it reflects your real values? It is possible to be an entrepreneur without behaving like a capitalist. Turn the business into a co-op, or find a way for your workers to become owners, pay a living wage so your workers don’t have to use the food bank. Instead of buying cheap ingredients from export economies, buy well-made locally produced goods. Ultimately, make your business decisions based not only on how much profit you can squeeze out of the company, but on true sustainability: economic, environmental and social (aka the “triple bottom line”). Consider how much you actually need to earn personally, and share the rest so everyone does better. Perhaps a greater benefit would come from spending money on health and safety, or creating recreational spaces for workers, or (gasp) paying more for organic ingredients to reduce your toxic footprint. Instead of offloading responsibility for your waste, reduce packaging, prioritize local markets, use re-usable non-plastic containers, and switch cleaners and sanitizers to environmentally beneficial versions. These are little examples based on a small business – just think of how much more could be done if we actually all took responsibility for our social and environmental structures, and gave them equal value to economic gain.

Don’t hide behind the status quo and pretend to be apolitical. If you support capitalism, classism, racism and exploitation, say so proudly. If you don’t, think about how you can change your business to reflect your actual ideology. Then do it. Then say so out loud – we need more honesty.

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