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The Common Good and the Free Market

By Rev. Michael C. McFarland, S.J.

Rev. Michael C. McFarland, S.J.I was living in Washington state when riots rocked the city of Seattle during the meeting of the World Trade Organization two years ago. I was a safe 300 miles and a mountain range away in Spokane, but we noted with considerable interest—and for some a certain perverse satisfaction—the travails of our larger and wealthier neighbor. Seattle had been caught completely off guard. Like the rest of the country, the city was stunned by the size and intensity of the protests. The protesters represented a wild variety of issues and points of view, which seemed to have little coherence. But what appeared to unite them and fuel their fury was a deep distrust of private business (especially multinational corporations), a sense that the interests of ordinary people were being neglected and abused, and a conviction that government was unable or unwilling to control those corporations and defend the interests of the people. The protesters saw that dynamic at work in environmental exploitation, sweatshops and other labor abuses, third world poverty and debt and so on.

The scene has been repeated several times now, most recently in Genoa. Personally I think that the protesters’ analyses of many of the issues have been simplistic. I don’t think business, even when it operates on a global scale, is inherently evil. But I do think the widespread perception that corporate interests have become far more powerful vis-à-vis government and the individual is worth examining. I think that there has been a shift in power and influence away from government and other public institutions toward private corporations. I mean no disrespect toward government officials when I say this. After all, it has been the stated goal of Governor Swift and her party to “shrink government,” and in fact most Clinton-era Democrats have gone along with that. And this program has been successful over the last 20 years.

We can see many indications of this shift in influence in our own country. Certainly the economy dominates domestic policy and national news. We have witnessed the deregulation of many industries that had operated in a quasi-public manner—from the airlines to energy companies to telecoms—and the privatization of functions that had been dominated by government and nonprofits, most notably health care and now, increasingly, education. The opening of many public lands to private use for lumbering, grazing, mining, the shift from welfare to work, and the dramatic loss of influence and membership by the unions are further signs of the growing power of corporate interests in relation to the rest of society.

Technology, my own area of expertise, has helped bring about that shift. Years ago the fear was that technology would give government the power to intrude on and control our lives. For the most part, that has not happened. It is really business—always more enterprising, efficient and forward looking—that has found ways to use technology to extend its influence, as recent controversies over privacy, including consumer privacy, privacy of medical records, and so on, have shown.

I am not saying this development is good or bad. It simply is. I taught in a business school for 10 years, and I have a great appreciation for the virtues of the free market, the benefits it can bring, and even its power as a democratizing force. However, the increased power and influence of corporate interests also mean increased power and influence of those who guide those interests. As Jesus said, “Of those to whom more is given, more will be expected.”

The interesting question is: what does it mean to be a good, i.e., moral, CEO or manager in this environment? In the past, it was pretty clear what it meant to be a good business leader: dealing honestly and fairly with others, taking care of your employees, paying your share of taxes, doing some pro bono or charity work, and so on. More recently we have learned to do stakeholder analysis, which gives us a better view of the many complex relationships that exist in the corporate world and a way of defining our obligations in each case. Both approaches are still very important, of course. But I would suggest that there is another dimension that somehow needs to be considered. It is what we often refer to as the “common good.”

The common good means the interests of the community as a whole, not just as a group of individuals, but as that complex network of institutions, relationships, values and supports that human beings need to flourish. It is this network of church, family, civic association, and so on, that has suffered as the free market ideology, with its ethic of extreme individualism and competition, has come to dominate not just our economic lives but our consciousness and most of our activities.

There are two areas where this has become especially problematical. One is the increasingly aggressive encroachment on what has traditionally been known as “the commons,” that is, those resources that are meant to benefit society as a whole and therefore are held in common, not under the control of any private interest. For example, as people come to realize the centrality of  “intellectual property” in the new economy, businesses and individuals are engaged in a huge scramble to tie up every possible idea, every spoken or written word or melody, and every little tidbit of personal information. Companies have been patenting business plans, procedures, algorithms, and other very broad concepts in hopes of controlling whole industries, to the detriment of scientific and cultural progress. There has been tremendous political pressure, much of it from the entertainment, publishing and software industries, to broaden copyright and get rid of the principle of fair use, on which education and many other segments of the community have always depended for open access to information. Even common facts are seen as subject to ownership. The NBA recently sued Stats, Inc., a sports information service, claiming it owns the scores to its games. So far the NBA has won.

The problem with this is that information is what binds communities together. After all, an important element of intimacy is the sharing of information about oneself. A big part of friendship and community is sharing news, telling stories, trading sports statistics and facts. We love to talk about Pedro’s ERA and Manny’s batting average, and what the score of last night’s Red Sox game was. If knowledge becomes something to be bought and sold exclusively, it makes our society much less open.

Access to ideas, information and techniques is essential for economic participation and growth. Richard Stallman, the legendary programmer, tabbed by the writer Stephen Levy as “the Last True Hacker,” and winner of a MacArthur genius grant, argues passionately that information, and especially software, must be free. Besides citing what he sees as the greed of those who try to exclude others in the software community from using their work, Stallman gives two positive arguments for making computer programs public domain. One is the need to have a free exchange of ideas to promote scientific progress. It is simply too wasteful and inefficient to keep good ideas away from those who could develop and use them.

The other argument is more interesting. It is the notion of friendship. Friendship means sharing. If the information and ideas that are most valuable to us are too encumbered by ownership, it harms friendship and community. For Stallman that means software. He lives to write code. For us it might be something else, but the principle is the same.

Now Stallman is an honorable man, so he is not advocating that we go around passing out copies of Microsoft Office to all our friends. Rather what he has been trying to do for the last 15 years is to create a whole software environment that is free to the public, so that we have something to pass around without violating any laws or property rights.

As Stallman realizes, the answer is not simply to take away all claims to ownership of information or intellectual property. Fairness dictates that those who worked and invested to create artifacts of commercial or aesthetic value ought to have some say in how they are used and, if they choose, be compensated for it. But they should also be willing to share it for the enrichment of society.

The other area where the common good is under attack is on access to society’s goods among those on the margins. What is great about our economy is that so many have been able to share in it and benefit from it. But not everyone is included. Those who cannot work, those with minimal skills, those who cannot care for themselves are more and more being left out. In the past there has been a network of family, church, other nonprofit charitable organizations and government agencies that have been able to look out for them. Now, with more power and resources shifting to the for-profit sector, that network is less effective. From a business standpoint, the marginalized are not stakeholders. They do not count in any economic calculus.

A good example is in health care. As more and more of the responsibility for health care moves to the private sector, especially the for-profit sector, there is perhaps more efficiency and accountability in the system, but there is also more pressure to cut loose the non-payers, and even those on Medicare, who represent a loss to the system. And it is happening, not because the executives who run those institutions are evil or uncaring, but because they have to answer to their shareholders and the brutal law of the marketplace. In modern times health care has been defined as a basic human right. Now, however, it is being treated as a commodity.

So there is a need to reassert two values that are at the very center of the Judaeo-Christian moral tradition: sharing, that is, holding in common what is most important to the community and its life; and special care for those who are most vulnerable in society. And I think that those who are the most influential people in what is by far the most influential segment of society have a special obligation to take a leadership role in that.

How to do this is tricky. Executives still have an obligation to run efficient, profit-making businesses if they are in the for-profit sector and not to spend themselves out of existence if they are a nonprofit. Nor is it enough to act individually, however well-intentioned. The issues are society-wide and require society-wide responses.

In the absence of government regulation there at least has to be some self-restraint, some curb on the appetite of business to control everything in sight. And if business is going to dominate society, then it needs to take more of an interest in the common good, especially for those who are most vulnerable. We do, in fact, see more corporate-community partnerships, which I suspect some of you are involved in, working to improve neighborhoods, provide low-income housing, build neighborhood clinics, and improve education in under-served areas. The “Ten Point Coalition” is a wonderful example. It is that kind of investment in the community that seems to be a growing model of enlightened business practice.

Robert N. Bellah, the great sociologist at Harvard and UC Berkeley, author of the classic Habits of the Heart, in a recent article, wrote about the need for a greater awareness of and commitment to the common good to balance the individualism and competitiveness in American culture. He talks about “our deep cultural code” that “combines privatized piety with economic freedom in a way that leads to loose connections and porous institutions and has inundated us with the incessant language of freedom and responsibility but is virtually inarticulate about the common good.”

I would suggest that today’s business leaders must see their work as a vocation. I would argue we must all live out our faith publicly by making a commitment to build up that community that is one of the most powerful signs of God’s presence among us.

This is an excerpt from Fr. McFarland’s address to the Massachusetts Governor’s Prayer Breakfast, held in Boston on May 3, 2001.

 

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