I’m not sure what to think about this (from AP via IHT):
Employees at the Chinese headquarters of Wal-Mart have set up a Communist Party branch, the company and the party said Monday, as part of a campaign by the party to expand at foreign companies.
The state-sanctioned labor body in China set up unions this year at Wal-Marts in the country.
On the one hand, I think it’s funny (and ironic perhaps) that a stalwart of the American hegemony is playing host to the Communist Party, like they’re somehow going to subvert Sam Walton’s behemoth. On the other hand, it sort of frightens me to think of the largest employer in America, which is frequently accused of mistreating its employees, teaming up with an entity that is often characterized as faceless, conformist, and dehumanizing and is, in a very real sense, guilty of some very serious human rights violations.
I also see it as a triumph of globalization as the rampant comsumerism and profiteering of Wal-Mart has to get along with the managed economy and “new communism” of China. But if the damned Red Chinese can have unionized Wal-Mart employees, why can’t the good ol’ U. S. of A.?
Forbes.com this week has a special section on corporate citizenship. I was particularly interested in the article about corporate philanthropy entitled “Can Corporations Save The World?” Considering the source, I was expecting it to be all about enlightened self-interest and up-with-capitalism, but it actually resonated with a lot of my own thoughts. I’ll avoid going on about the rise of corporate rule and instead focus on something simpler and a bit more relevant to the Forbes article: how corporations are valued.
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Forbes.com recently ran a list of the biggest private companies in the country, and it was with some pride that I saw my favorite local grocer, HEB, come in at number 11, with 2005 revenues of $12.4 billion. Consider that Hollywood’s domestic box office is projected to pass $9 billion this year. Not too shabby.
I happened across this randomly today. Unsurprisingly, Mansanto is pulling research and all kinds of business from the EU, where there is adamant consumer and farmer opposition to GM foods. Not the like U.S. where we don’t really care about anything except how much it costs to fill the gas tank on the Suburban.
Wired’s current coverstory is about so-called “superorganic” foods, which the article sells as the next generation of genetically modified (GM) foods, frequently referred to as “frankenfoods.” The current crop of GM foods has genes inserted from other species to give them improved functions, such as drought resistance or added nutrients. Superorganics do this one better and activate dormant genes or insert genes from different strains of the same species.
First off, let’s not mince words the way Wired does. Superorganics are still genetically modified. But so are dogs and wheat. Dogs and wheat are the product of controlled breeding whereas “frankenfoods” come out of a lab and, more importantly, contain genes from other species, usually bacteria or some equally foreign donor. Superorganics get sold in the article as being equivalent to the breeding process, just one that has been accelerated by lab techniques. The fact of the matter is that superorganics probably spend more time in the lab than GM foods and achieve results that no breeder in a thousand years could do.
That’s not to knock them at all. Much to the contrary, I think these “superorganic” foods are the way to go. They solve two of the biggest problems of GM foods. The scariest is the idea of “genetic pollution,” which can be thought of as artificially changing the wild gene pool. If a gene that produces beta-carotene is transferred from a GM crop to some native species, who knows what the effect of that would be. Or if a crop contains a bacterial gene that makes it naturally resistant to insects, we run the risk of breeding hardier insects the same way that antibiotics have resulted in many strains of antibiotic-resistant bacteria. By using only genes native to a species, superorganics avoid this problem. Indeed, many strains currently under development simply reactivate genes that have been shut off by generations of controlled breeding.
The second problem is intellectual property rights. Most of the GM strains were developed by Monsanto, and they have patents on not only the crops but the techniques used to create them. This makes it difficult to feed hungry people in developing countries. Superorganics instead rely on public domain techniques that are free from intellectual property issues.
Superorganics also overcome a number of other issues associated with both modern and traditional techniques of genetic modification. Inbreeding, for example, is a big problem for dog breeders but not superorganics. I’ve long thought that the solution to humanity’s current food crisis — malnutrition is responsible for something like 30 million cases of blindness annually — lies in modifying our crops to better accommodate our needs. As the population grows over the coming century, the food crisis will only worsen. Superorganic foods are part of the solution.
I saw a story about this on CNN this morning. In short, Citigroup — one of the world’s largest financial services companies — has set corporate policies in regard to issues such as endangered ecosystems and climate change. Hopefully this policy will set the standard for the financial services industry and actually have a positive impact. The cynic in me fears that less scrupulous companies will simply rush in to fill the void that Citigroup has created.
But regardless of the actual effect, this is still a victory for environmentalists. A major transnational corporation is betting that it can increase profits by acting in a “green” manner. The traditional wisdom has been that respecting the environment and acting responsibly will drive profits down. We are starting to see a change in the attitude of corporate America, and that is more powerful than all the hippies in the world planting trees and holding hands.
This change needs to go further, of course. We need to fundamentally alter the way we evaluate companies and purchase shares of their stock. Dividends are a thing of the past, so there’s really no motivation for profit-at-all-costs. But that is exactly what Wall Street continues to value: short-term gains and rising profits, quarter over quarter and year over year. We need to evaluate companies differently. Yes, they must be profitable, as any company in a capitalist system should be. But no longer should more profits be better.
Instead, once a company is in the black, let’s evaluate corporations based on their citizenship. Stock prices should rise when a company gives back to the community, cleans up the environment, or adopts an underperforming school. CEOs and middle managers should receive bonuses for exceeding federally mandated pollution targets. The government already offers tax breaks for some of these items, but the real motivation will come when Wall Street and the stockholders reward good behavior.
As any financial advisor will tell you, we need to focus on long-term returns, not short-term payoffs. Corporations in the last 100 years have gained many of the rights of flesh-and-blood citizens. It’s time they assume the responsibilities of citizenship and, just as we expect our most powerful and respected citizens to set a standard for the rest of us, behave as model citizens.
I read a lot of Wired. This month’s issue has a cover story about the exportation of tech jobs to India. I haven’t gotten to it yet, but this topic has been in the news a lot lately. It got me thinking about whether biotech jobs would ever be sent overseas to cheaper labor markets. I worry about this because since I decided to go back to school, I have fully expected and planned to get a job in the private sector rather than trying for an academic position.
Moving tech support or programmers to another location is a fairly straightforward proposition. All you need is a desk, a computer, a telephone, and then just route the calls. Moving a lab is a very different beast. In addition to the physical space, there’s a lot of specialized equipment, stocks, samples, chemicals, and chemical waste. Not to mention that the scientific community in this country is much stronger and more respected. The brain-drain historically is from India to the U.S.
However, the research climate in this country is changing. Politico-religious pressures are dampening stem cell research. The intellectual property laws are stifling innovation. We’ve already seen this situation drive prominent researchers to other countries. It seems likely that, without a major reversal in policy, this American brain-drain will continue. The United States will not be a leader in biotech.
It’s a conclusion that seems preposterous to us. The U.S. has been number one for so long that we can’t imagine being anything else. The Russians couldn’t either and certainly now are having hard a time not being a superpower. But the historical fact is that all empires fall. Maybe biotech is the beginning of the end for the U.S.
