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Critics of Business This chapter explores the birth and life of the enduring values first set forth by Mother Jones. Chapter 4 McGraw-Hill/Irwin© 2006.

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Presentation on theme: "Critics of Business This chapter explores the birth and life of the enduring values first set forth by Mother Jones. Chapter 4 McGraw-Hill/Irwin© 2006."— Presentation transcript:

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2 Critics of Business This chapter explores the birth and life of the enduring values first set forth by Mother Jones. Chapter 4 McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

3 Mary Mother Jones Opening Case Suffered through the death of her family from yellow fever, and the death of her business from the Great Chicago Fire. Rose to prominence as an organizer for the United Mine Workers. Fell out with the United Mine Workers and became a lecturer for the Socialist Party. In 1905 helped launch the International Workers of the World. Eventually became disillusioned with unions, but continued to speak out. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-3 We may forget Mother Jones, but we hear her in todays business critics.

4 Origins of Critical Attitudes Toward Business Two underlying sources of criticism of business: The belief that people in business place profit before more worthy values such as honesty, truth, justice, love, piety, etc. The strain placed on societies by economic development. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-4

5 The Greeks and Romans The civilizations of ancient Greece and Rome were agrarian societies. Philosophers reasoned that profit seeking was an inferior motive and that commercial activity led to excess, corruption, and misery. Plato believed that insatiable appetites existed in every person, but could be controlled by acquiring inner virtues. Aristotle believed there was a benign form of acquisition that consisted of getting the things needed for subsistence. Epictetus and Marcus Aurelius taught that the truly rich person possessed inner peace rather than capital or property. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-5

6 The Medieval World The prevailing theology of the Roman Catholic Church was intolerant of profit seeking. According to Church cannon, merchants should charge a just price for their wares, opposed to our modern idea of market price. Catholicism condemned usury. By the twelfth and thirteenth centuries, Commercial activity proved stronger than the fear of prison or hell. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-6

7 The Modern World The Protestant ethic – work was a means of serving God and if a person earned great wealth through hard work it was a sign of Gods approval. Capitalism – free markets harnessed greed for the public good and protected consumers from abuse. The industrial revolution created new tensions that reinforced critical attitudes about business. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-7

8 The American Critique of Business The Colonial Era The colonists who landed at Jamestown, Virginia, in 1606 were sponsored by investors who hoped to make a fortune by discovering gold in the New World. The Pilgrims who came in 1620 were financed by the Plymouth Company, whose backers sought to make a profit. Trade in coastal regions expanded; inland farmers created a broad agrarian base for the economy. Benjamin Franklin taught that God would approve the pursuit of self-interest and wealth. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-8

9 The American Critique of Business The Young Nation In the late 1700s the economy was 90 percent agricultural. Alexander Hamilton believed that industrial growth would increase national power. Thomas Jefferson believed than an agrarian economy of landowning farmers was the ideal social order. With the support of business leaders, Hamiltons bold actions and ideals prevailed. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-9

10 The American Critique of Business The first half of the century saw steady industrial growth. Many rejected capitalism and tried to create alternative worlds. New Harmony The Oneida Community The agrarian and socialist communes failed in practice because they were based on romantic thinking, not on sustaining social forces. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-10

11 Populists A farmers protest movement that began in the 1870s led to formation of the Populist Party, which essentially died in The populists: Advocated government ownership of railroad, telegraph, and telephone companies and banks. Demanded direct election of U.S. senators. Sought to abandon the gold standard and expand the money supply. Failed to forge an effective political coalition. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-11

12 Progressives Lasted from about 1900 until the end of World War II in Mainstream political doctrine. Sought to cure social ills by using government to control perceived abuses of big business. Progressives: Used the courts to break up trusts and monopolies Outlawed campaign contributions by corporations Restricted child labor Passed a corporate income tax Regulated food and drug companies and public utilities McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-12

13 Socialists The originator of the modern socialist doctrine is Francois-Noël Babeuf ( ) Advocated seizing the possessions of the wealthy and giving them to the masses. Pushed for a violent overthrow of the French regime, but was imprisoned and then beheaded – Karl Marx and Friedrich Engels published The Communist Manifesto. Argued that the basis for socialism was an inevitable process of class struggle underlying and explaining the history of human society. Under capitalism the working class is exploited. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-13

14 Socialists (continued) Marx and Engels envisioned an equalitarian society that abolished private ownership of capital and instituted wealth sharing among all members. Discovered historical theory that class warfare was the underlying dynamic that changed society. WORKING MEN OF ALL COUNTRIES UNITE! McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-14

15 Socialists (continued) United States of : Child labor was widespread Factories injured and wore down workers Wealth and power were concentrated in great banks, trusts, and railway systems Inequality between rich and poor seemed obscene The masses suffered through financial panics and unemployment Industrial growth created a new social working class McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-15

16 Socialists (continued) Unionization Early unions tied to single companies or locations Knights of Labor set up 1877 – beginning of violent union strikes 1905 – Industrial Workers of the World (IWW) formed 1912 – Peak of socialism in the United States McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-16

17 The Great Depression and World War II There was a period of high confidence in big business during the 1920s, ending with the stock market crash of As the depression deepened, anger at business grew. Howie Long introduced a plan to redistribute wealth, but was assassinated before it could be enacted. The war years washed away the populist/socialist/depression era image of the corporation as a bloated plutocracy. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-17

18 The Collapse of Confidence Strong public support for business collapsed in the mid-1960s. Four strong social movements attacked big business: Civil rights Consumer rights Environmental rights Vietnam war opposition McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-18

19 Percentage of American Public Expressing Great Confidence in Leaders of Major Companies McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-19

20 The Collapse of Confidence (continued) Theoretical confidence gap created in the 1960s. Rising popular distrust of business gave reformers the support they needed to increase government regulation dramatically. By the mid-1970s corporations had organized to fight. Early 1980s – new progressive movement born. Corporations have too much power. Corporations have excessive legal rights. Corporations are inherently immoral. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-20

21 The Collapse of Confidence (continued) Antiglobalism movement Perceives that transnational corporations place profit before other lofty and enduring values. Complaints center on problems generated by economic growth. Transnational corporations have too much power. Multilateral agencies such as the World Trade Organization, International Monetary Fund, and World Bank are undemocratic. Globalization creates inequality. Corporations spread a gospel of Western-style development around the world, erasing distinct local cultures. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-21

22 Progressive Activists Ralph Nader – consumer advocate, presidential candidate. Recent progressive elements have created networks of advocacy to correct perceived problems or abuses. 1800s – global antislavery campaign 1970s – campaign against infant formula makers 1980s – human rights coalition against apartheid in South Africa McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-22

23 Progressive Activists (continued) The progressive left has combined in the fight to impose corporate responsibility Consumer boycotts Shareholder proposals Harassment Codes of conduct Corporate campaign McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-23

24 How the Progressive Network Attacks a Corporation McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-24

25 Concluding Observations Each era brings new personalities, new targets, and some new issues, but the fundamental language and substance of criticism remains the same. Industrial capitalism is a historical force for continuous, turbulent social change. Capitalism, for the most part, brings changes that represent progress, a condition of improvement for humanity. A broad spectrum of criticism is an important check on business power. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-25


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