Corporate Profits Amid Communal Decay

The Corporate Obligations Debate: Home

The exchange with Andy Puzder has been engaging and clarifying. I discern that we share many common concerns about the decrepit state of the nation, the corruption that is rife in our education system, and the need for strong civil society, voluntary associations, and family.  Andy has been exemplary in his commitment to the protection of unborn life, an issue about which we vehemently agree. Thus, our areas of disagreement are all the more interesting and revealing, given many shared concerns and commitments.

Andy represents the viewpoint of classical liberalism, what has been labeled as “conservatism” for roughly the past half-century. In the view of such “conservative liberal” thinkers – who share a lineage to John Locke and F.A. Hayek, aligned strongly with the Reagan administration, and include such contemporaries as (the more recent) George F. Will, Samuel Gregg, and Jonah Goldberg – one can successfully combine an economic order dedicated solely to pursuit of profit with a social order in which families, schools, associations, churches, and communities flourish.  By this theory, the logic of a capitalist and utilitarian economy can be limited to the economic sphere, leaving untouched the strong social, duty-bound, obligation-rich, and self-sacrificial ethos required for those other spheres to flourish. Any evidence to the contrary is ultimately attributable to the baleful interventions of government, which undermines freedom in both spheres, skewing at once our ability to pursue profits unmolested while undermining the more social ethos necessarily for the flourishing of the civic, familial, and religious spheres.

It was Andy’s first question to me that revealed these views most fully:

To what extent are your concerns about corporations really an expression of concern about other parts of our society?  In other words, is it possible you are holding business, and the corporate form, responsible for what is really the result of educational, family, and religious decline in the society at large?

The question revealed a hidden premise: the health of “educational, family, and religious” institutions can and should flourish separately from any corporate activities; their measurable decline is separable from any activities in the economic realm.

Yet, in response to one of my questions regarding the duties of corporations to these institutions, Andy replied:

Profit-focused businesses already support “primary agents” and “secondary” or “communal” goods. In fact, they produce 100% of the necessary financial support. Businesses create the jobs that generate incomes enabling employees to support themselves and their families, support charities, pay taxes, and purchase homes.

Thus, if corporations are simply allowed solely to pursue profit as their exclusive undertaking, assuming they are profitable, the wealth and prosperity generated should translate into a vibrant and healthy civil society.

According to the Federal Reserve, after-tax corporate profits rose from approximately $22 billion in the first quarter of 1947 to 1.6 trillion in the first quarter of 2020 – or an increase of 525 percent after adjusting for inflation. If one smooths some of the peaks and valleys during economic crises, one observes a relentless upward trajectory of national wealth generated by corporate profits. Even with taxation and regulation, these after-tax profits indicate incredible success on the measure most important to Andy. If his supposition holds, that “secondary goods” are extensively supported when corporations are allowed to pursue profits, then this tremendous economic success should translate into concomitant strengthening of “secondary goods” secured by civil society.

Yet – as Andy is doubtless aware – during this exact same time frame, there has been a relentless decrease in measures of health among the institutions of civil society, family, and religious institutions. Indeed, if the chart tracking corporate profits were turned upside down, it would capture almost exactly the trajectory of declining social capital documented by such scholars as Robert Putnam, Christian Smith, Charles Murray, Sherry Turkle, and Jean Twenge, a trajectory that has accelerated in recent decades when corporate profits hit astronomical levels.

Correlation is not causation, but these inverse trajectories challenge the deepest presupposition of Andy and fellow “conservative liberals”: that economic logic and motivation can be sequestered to the economic sphere. As my last response underlined, the demands, power, and logic that animate contemporary corporations have exercised a transformative influence on education, particularly on universities, where the liberal arts and their training in the “arts of liberty” have been abandoned in favor of, on the one hand, the rise of STEM and economistic disciplines, and, on the other, liberationist ideologies that are informed by the spirit of capitalism and its belief in constant self-realization and re-creation. The social stability and traditional values central for family formation and ongoing communal life have been undermined both by the insecurities of the globalized economy as well as the relentless demands for “successful” individuals to remain unattached, deracinated, mobile, and capable of altering life-paths in accordance with the relentlessly changing demands of capital. Transcendent values that inform and inspire religious institutions have been crowded out by a culture saturated in materialism, consumerism, and valuation of all goods based upon money. While these trends are not the “fault” of corporations, they are nevertheless one primary consequence of a society that promotes the view that the economic realm is distinct from, and opposite to, the social, familial, and religious realms that can somehow be cordoned off. In fact, the former has come to define the latter, rather than vice-versa.

Moreover, during this time of accelerating profit growth and increasing social influence, the power of corporations has not been merely limited to subtle and implicit influence over other social realms, but through participation in the “culture wars,” has taken sides explicitly and directly against social, familial, and religious institutions. A growing list of major multi-national corporations has loudly sided with progressives on sexual identity and family issues, and even weighed in by opposing democratic legislative processes that would protect religious liberty in states such as Indiana, Arizona, Arkansas, and North Carolina. Corporations are already not limiting themselves “merely” to profit motive, but advancing in explicit and powerful ways their commitment to the ideal of the unencumbered self, the ideal of childlessness and individualistic self-realization, the malleability of human biology, causes that are closely aligned with the pro-abortion lobby, and, most recently, associating themselves with a movement that has criticized the “nuclear family.” A deep irony is that corporations and their supporters, having defeated economic communism, increasingly align themselves with the form of Marxism that Italian philosopher Augusto del Noce described as perfectly compatible with “the affluent society” – those aspects of Marx’s thought that are deeply antagonistic toward family, tradition, and faith, in the name of radical forms of individual liberation. What have heretofore been largely subterranean influences relentlessly remaking human society have become more explicit and directly political in recent years.

In summary, “conservative liberals” like Andy have been mistaken about the ability of large-scale economic actors to “sequester” their activities solely to the economic realm. The motivation at the heart of the currently-constituted corporation – self-interested profit-motive, constrained only by limits imposed by positivisitic legal restrictions, based on the liberal view of the human person – is a philosophical frame that is ultimately not containable, and has instead pervaded every aspect of life, and as a consequence, has corrupted the institutions that are vital to social and human flourishing. The fact that advanced liberal democracies are wealthier has not translated into greater social health, but accelerated the decline of family, education, and religion. And as the institutions of civil society have decayed, the remaining organization that has retained its strength and vitality – the modern corporation – is revealing its antipathy to those institutions by explicitly advancing political causes that will accelerate their destruction.

The alternative is not the elimination or socialist takeover of corporations, however, but – as I argued in my opening statement – to reconceptualize the corporation as embedded within a broadly “corporate” society, in which nations are understood to be constituted not by self-interested individuals, but, rather, are formed more organically as “a community of communities.” Embedded corporations, like a family business, rightly pursue profitability, but they also consider the ways that they can support the communities of which they are a constitutive part, cultivate a good society through their treatment of workers and consumers and the planet, and invest part of their profits for the benefit of the common good. Especially necessary are conscious efforts to support strong family and communal forms and norms, rather – as increasingly seems the case in corporate culture – to emphasize an ethos of “just do it.”

Andy and I share many concerns about the baleful trajectory of the American republic.  However, I lament that Andy’s commitment to the unfettered profit-oriented corporation is actually undermining many of the institutions that he deeply values, a tragic stance that should be discarded in light of the gathering evidence that the theory of “conservative liberals” has never aligned with reality.

Next entry: Andy Puzder on Three Cheers for Capitalism