A Catholic Critique of Corporate America

In the recent presidential campaign we observed the strongly critical reaction of business and economic commentators, surely representing the views of many corporate leaders, to President-elect Donald Trump’s tough talk on trade and especially his zeroing in on China. In the last couple of years, we have witnessed the willingness of many big companies to put economic pressure on states that have tried to resist the homosexualist agenda, such as in the public restroom controversy in North Carolina and protecting religious liberty of people in Indiana who in conscience can’t provide services for same-sex “weddings.” Then, there are such long-term trends as CEO compensation exponentially outstripping that of other employees and the readiness of companies to pick up stakes and move long-time facilities out of areas irrespective of resulting unemployment crises and strains on families and communities. Too often, people associate well-deserved criticism of Corporate America with leftism and think that it’s always conservatives who instinctively rally to its support no matter what. The reality is quite different.

We can readily acknowledge the economic benefits, including a rising standard of living, which economies of scale have made possible. That doesn’t mean, however, that we have to anoint large business enterprises as the universally best arrangement for economic life or ignore troublesome attitudes and practices of their leading decision-makers. While one can appreciate why corporate CEOs should be compensated at a level higher than others in the organization, it’s hard to justify gross disparities in corporate compensation. It’s not leftist or socialistic to criticize this. After all, didn’t Aristotle suggest that there was an appropriate range for property and wealth and that too little and too much would likely cause problems? It’s harder still to accept the not infrequent phenomenon where a CEO performs poorly and is let go and then latches onto another big corporation where he’s paid even more. It’s even harder to justify disadvantaging lower-level employees because of poor decisions by management. That was something Pope Pius XI’s Quadragesimo Anno specifically singled out for criticism (#72).

We can rightly question how well central points of Catholic social teaching are upheld by what seems to be the prevailing mentality in Corporate America today. We can start with the need to keep people employed and insuring a just wage—or what Pope St. John Paul II came to call the family wage. Will most big companies go out of their way to provide this when employees lack bargaining power? While companies certainly need to make a reasonable profit, how many see their employment costs as simply a factor of production that they should be prepared trim in the interest of an unduly high profit margin? Just picking up and moving to another part of the country or overseas or just outsourcing production to China, southeast Asia, or India in the interest of lower labor costs doesn’t sound like corporate decision-makers are too concerned about either the employment situation or the income needs of their fellow citizens.

While it’s true that Catholic social teaching has insisted that well-off nations assist poorer nations, as Blessed Pope Paul VI said in Populorum Progressio they should be prepared to share their superfluous wealth (#49). In other words, the needs of their own citizens would always come first. It is reasonable to conclude that this statement in the encyclical isn’t directed just to political leaders, but to economic ones as well. Pope Paul also emphasized that free trade cannot be a dogma, but has to be “subject to the demands of social justice” and “kept within limits which make it just and moral” (#59, 61). Are the corporate leaders whose companies are inordinately benefitting from current trade arrangements with China concerned about the moral issues involved with unfair Chinese trade practices, hemorrhaging of American jobs, a diminished quality of goods for American consumers, and resulting strains on the U.S. economy?

Even apart from Catholic social teaching, people have questioned if profits are crowding out patriotism. In Caritas in Veritate, Pope Benedict XVI cautioned about the deleterious effects of corporate outsourcing to boost their shareholders when “the workers, the suppliers, the consumers, the natural environment and broader society” are hurt (#40). We should also recall that such a leading light in Catholic economics as Heinrich Pesch, S.J., who was said to have inspired Quadragesimo Anno, argued that there is no problem, economically or morally, with some measure of protectionism.

Then there is subsidiarity. Even while conceding the value in some contexts to economies of scale, it applies as much to the private economic sector as to government. The overwhelming trend to merge and consolidate makes one think that corporate decision-makers are oblivious to it. How much of the corporate world embraces the participatory norm that Pius XI and John Paul II stressed when it comes to workplace decision-making? In Laborem Exercens, John Paul stressed that workers have a “right to rest,” comprising Sundays and some vacation time (#19). We can hardly say that corporate leadership, especially in the retail and restaurant sectors, thinks much about this. Most apparently believe that this will hurt their profit margins—indicating that, contrary to what the Church says, profit (as important as it is) cannot override peoples’ good. Small local family enterprises are the most likely ones to close on Sundays, even though their bottom-lines suffer more for it than a big company’s would. The corporate defenders, from the ranks of liberal economics, will say that people should be free to choose if they want a job that requires Sunday work. That indeed conforms to the central tenet of liberalism in all its historical manifestations: man is his own sovereign, the shaper of his own moral compass.

This latter point underscores the amorality that afflicts much of contemporary corporate culture. Amorality easily results in openness to the outright immorality of the broader secular culture and is spawned by the fact that the corporate ranks are populated with members of the “knowledge class,” the beneficiaries of instrumentalist, ideologically charged education in a post-liberal arts era. So, many big companies eagerly embrace the homosexualist agenda. Many are also big givers to Planned Parenthood. Even if corporate decision-makers aren’t inclined to jump aboard the leftist cultural agenda, they often don’t have the courage to resist the interest groups. It seems that many in Corporate America not only need a heavy dose of business ethics, but of sound ethics and virtue in general.

Many falsely believe that Corporate America is a hotbed of arch-conservatism. Besides being an engine of cultural leftism, its elites probably mostly range from “moderate” Republican to enthusiastic Democrat. They have not only made their peace with the regimen of heavy governmental regulation that has long been pushed by the left, but have learned to turn it to their advantage. So, we have “crony capitalism.” Traditionalist conservatism, as Mark C. Henrie writes, sees a parallel between the cultures spawned by the corporate-oriented economy and the welfare state and socialism: both involve a weakening of sound morality, personal responsibility, commitment, human dignity, and the common good.

Corporate America, on trade and other issues, seems to be insufficiently attentive to the imperative of the social use of private property—stressed by Aristotle, Catholic social teaching, and the American Founding Era—as it was in a different context in the late nineteenth and early twentieth centuries. It also seems impervious to the fact that a sound economy—and politics—requires a sound culture, and that it ultimately hurts itself by encouraging cultural corruption.

(Photo credit: Associated Press)

Stephen M. Krason

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Stephen M. Krason's "Neither Left nor Right, but Catholic" column appears monthly (sometimes bi-monthly) in Crisis Magazine. He is Professor of Political Science and Legal Studies and associate director of the Veritas Center for Ethics in Public Life at Franciscan University of Steubenville. He is also co-founder and president of the Society of Catholic Social Scientists. He is the author, most recently, of The Transformation of the American Democratic Republic (Transaction Publishers, 2012), and editor of three volumes: Child Abuse, Family Rights, and the Child Protective System (Scarecrow Press, 2013) and The Crisis of Religious Liberty (Rowman and Littlefield, 2014); and most recently, Challenging the Secular Culture: A Call to Christians (Franciscan University Press). His next book is Catholicism and American Political Ideologies (forthcoming this fall from Hamilton Books).

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