The case for spending your money with small to medium businesses rather than publicly traded corporations.

Seven months ago, May 2018, The New Republic ran a very well written and insightful opinion piece written by John Benjamin.

The article is written about MBA programs; what they are and are not teaching. But it pulls back the curtain on the publicly traded corporate world.  It is dog-eat-dog, zero-sum, winner-take-all capitalism.  Make no mistake, many private companies also behave this way, but publicly traded companies must behave like "Vikings".  Shareholders drive companies to dominate their markets, no matter how the employees feel about it.  Shareholders are the reason American jobs went to low-cost countries.  There is no altruistic concern for humankind in the corporate world, only EBIDTA, dividends, and stock prices.  The lower the overhead the better the return to the investor.

If you want to know that your money is not "raping and pillaging" in economically depressed towns and regions, pay a bit more for services and items. Buy local or choose companies that aren't publicly traded and do good in the world (think Toms, Patagonia, or ... DIFF Eyewear here).  You'll be helping your neighbors make a living and you'll be depriving corporate  raiders and shareholders of their ability to oppress the vulnerable.

The general public increasingly mistrusts big business and economic elites, and for good reason. For most of the country, the decade since 2008 has been a lost one; for us it’s been a moment for exponential growth—in new technologies, in the trappings of bourgeois life (from prestige TV to health crazes to artisan coffee), and finally in the market itself. A more dynamic approach to addressing society’s problems, one which challenges students’ assumptions and moral priorities, might propel business schools to a more credible status in the public square, and allow them to finally become incubators of principled economic leaders rather than managers. It could also show that the would-be well-off feel an obligation to the worse-off, and that we take seriously the role business decisions can play in improving their lots.

John Benjamin, MBA student and Dean’s Fellow,M.I.T. Sloan School of Management

 

Bottom-line of the article:

Current MBA programs are giving lip service to producing socially liberal, fiscally conservative graduates. In our stock market oriented world we easily forget that market-based capitalism will tolerate neither.  Shareholders rule in the publicly traded corporate world and they are in it for the money, not the betterment of society or humanity.

The best recent example of this is Knight-Ridder even though it is a personally painful story for me and my wife (we both worked there). The shareholders wanted a certain level of profit from the second largest newspaper chain in America. The papers couldn't produce that level, so the shareholders voted to sell the paper to get their profit.  Knight-Ridder went out of existence and was sold in pieces to Gannett and McClatchy.

Don't be deceived, "Doing the right thing" has no real place in market-based capitalism. Any MBA program that tells you they are going to educate you in how to be socially responsible in the real world is at best fooling itself.  If you want your life's work to be equality for women or fair/equal wages or restricting child labor in poor countries … find a different vehicle. Publicly traded companies exist to make money for their shareholders.

https://newrepublic.com/article/148368/ideology-business-school

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