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Because Businesses Don't Care Enough About Profits
April 8, 2005 1:26 PM   Subscribe

A Pro-Evil Mutual Fund? For centuries, the argument in favor of laissez-faire capitalism has been simple. If you step back and let businesses pursue profit without restraint, legitimate needs and desires will be taken care of in an efficient manner. Moral concerns, the argument goes, are better handled by consumers and investors voting with dollars than governments coercing with legislation. Now, Cato Institute scholar and Fox News columnist Steven Milloy is worried ideologically motivated investors might be putting business profits in danger. He's forming a new mutual fund to fight their leftist influence.
posted by verb (33 comments total)

 
KUDLOW: Now the Rainforest Network hoodwinked a bunch of seven-year-old grammar-school kids from Fairfield County, Connecticut, to go down there and allegedly march. Now this to me is a new low and is really kind of a form of child abuse.

I agree. Anyone who does this to kids (cough Schiavo cough) is guilty of child abuse.
posted by Slothrup at 1:55 PM on April 8, 2005


So, essentially, Milloy is saying that the owners of companies should not be able to act the way they want to act, only the way he wants them to act.

Right. Moving on...
posted by Ptrin at 1:58 PM on April 8, 2005


Now the Rainforest Network hoodwinked a bunch of seven-year-old grammar-school kids from Fairfield County, Connecticut, to go down there and allegedly march. Now this to me is a new low and is really kind of a form of child abuse.

Jesus H. Chrysler Corporation, what a dickhead.
posted by Scoo at 1:58 PM on April 8, 2005


From the text:
Arthur Laffer did a study that came out in January that found just the opposite. He looked at the most successful corporate socially responsible companies or the top corporate citizens, and he found absolutely no relationship between corporate social responsibility and profits.

So (assuming the above is true), if there is no relationship between corporate social responsibility and profits,why not just be social responsible? If the profits are essentially the same, no matter what a company does, then doesn't it mean that the energy required to be social responsible is negligible?
posted by Boydrop at 2:20 PM on April 8, 2005


Excellent -- if I had money to invest, I'd plunk down some cash for this fund. 'Bout damn time.
posted by davidmsc at 2:25 PM on April 8, 2005


Meet the portfolio manager:


posted by pmurray63 at 2:25 PM on April 8, 2005


I like this idea... it's like a reverse boycott. Instead of not patronizing a company to pressure it to change it's ways you actively invest in it and, through shared ownership, co-opt it.

Of course... how long before money and profits start to co-opt the co-opters?
posted by gambit at 2:26 PM on April 8, 2005


if I had money to invest, I'd plunk down some cash for this fund

Maybe if you had a Democratic president, you'd have some cash to invest.
posted by pmurray63 at 2:28 PM on April 8, 2005


See also, the Vice Fund, which may look like a joke, but is in fact a mutual fund (Ticker: VICEX).

The question of whether the "corporate responsibility" movement accomplishes anything socially useful, or just a bunch of feelgood pandering, presents an interesting debate. For some non-vapid coverage that doesn't randomly slander liberals ("anti-food" activists? Hello, straw man; who the hell is anti-food?), The Economist covered it pretty well in the January 20th issue (I think; give or take a week -- it was the cover story), although they predictably came down on the libertarian side.

"Vapid" comment not about you, verb, rather about Kudlow et al.
posted by rkent at 2:33 PM on April 8, 2005


I think this needs to be looked at in a literal manner.

Corporations want human rights.

They wish to be recognized as persons.

Persons are obligated to follow certain laws with certain penalties if they break those laws.

Corporations have broken several laws in the past causing death of hundreds to thousands of living human beings. This is mass murder. Yet they have been let off despite clear inarguable evidence that they are guilty (Bhopal, Union Carbide as one example).

Executives have broken several laws over the years with little fear of prosecution or imprisonment, despite the large amounts of money involved in fraudulent activities (Enron, Global Crossing, etc.)

There needs to be more vigorous prosecution of these entities and individuals and much more done to hold them to the same morals and standards as any middle class individual in today's society. Perhaps we should also restrict their access to funds to defend themselves to whatever any middle class individual could afford instead of the bottomless pit of funds they can expend in defending their clearly indefensible actions.

Just a thought . . .
posted by mk1gti at 2:35 PM on April 8, 2005


Excellent -- if I had money to invest, I'd plunk down some cash for this fund. 'Bout damn time.

David, I'm really baffled by that. I mean... it doesn't seem like there's any dearth of funds geared towards, y'know, profit. What makes this fund unique other than its members ideological opposition to other funds?

Simply investing for profit is possible with the vast majority of funds. Are you hoping that the fund actively promotes deforestation and child labor? Not trying to be snarky, just confused.
posted by verb at 2:35 PM on April 8, 2005


mk1gti--

I agree that if corporations want to be treated like individuals they ought to be held to the same standards of behavior, but why should they be treated like individuals in the first place? They are obviously not people, though they are composed of people; perhaps a serious revision of corporate law is required to create a legal environment in which actual individuals can be held responsible for their actions, and organizations can be penalized for sanctioning illicit activities.
posted by clockzero at 2:49 PM on April 8, 2005


Here's a link to my prior post about the Vice Fund.

Investing is about money, not ideology, for most people. If investing in "evil" companies makes money, of course somebody will jump on it, whether it purports to be Right-leaning or not.
posted by me3dia at 2:55 PM on April 8, 2005


So (assuming the above is true), if there is no relationship between corporate social responsibility and profits,why not just be social responsible? If the profits are essentially the same, no matter what a company does, then doesn't it mean that the energy required to be social responsible is negligible?

Right on. If the socially responsible corporations are indistinguishable from others, revenue-wise, and there are external benefits to being socially responsible (and you obviously think there are, if you're the one who successfully framed this debate in terms of "responsibility"), then why on earth NOT do it? It's a shoe-in!

And perhaps Milloy doesn't understand the concept of a mutual fund; people who participate ARE "shareholders" of the target companies, and thus as fully entitled as any other shareholder to demand whatever kind of behavior.
posted by rkent at 3:03 PM on April 8, 2005


Only after the last tree has been cut down
Only after the last river has been poisoned
Only after the last fish has been caught
Only then will you find you cannot eat money
-- Cree prophecy
posted by Smedleyman at 3:07 PM on April 8, 2005


And perhaps Milloy doesn't understand the concept of a mutual fund; people who participate ARE "shareholders" of the target companies, and thus as fully entitled as any other shareholder to demand whatever kind of behavior.

This is the part that leaves me scratching my head. I guess I can't help but read it as "If I invest based on my priorities, The Market is working. If you invest based on your priorities, you're cheating and gaming the system."

My first front page post. Wheeee!
posted by verb at 3:10 PM on April 8, 2005


Laissez-faire economics, like Biblical prophecy, needs to be helped along. Never mind that both God and the market are assumed to be omnipotent. I can certainly see not wishing to invest in a company that uses its money to do things you dislike. The weird part is feeling the need to make a mirror image of the "socially responsible investing" trend.

One big difference between old school conservatives and these wacky new neocons is that the newer brand requires a kind of ideological purity in which everything ever associated with liberalism must be scorched clean, even if it otherwise might be neutral or helpful.

The Invisible Hand is wanking.
posted by ignatz at 3:36 PM on April 8, 2005 [1 favorite]


The Invisible Hand is wanking.

Best.Line.Ever. !!
posted by Boydrop at 3:46 PM on April 8, 2005


Let's take a look at corporate personhood. The decision to give corporations the same rights as persons is flawed in itself and should be ruled as invalid, therefore any decisions affecting corporations favorably should be ruled invalid from the late 1860's forward. Seems reasonable to me . .
posted by mk1gti at 3:50 PM on April 8, 2005


As is this nonsense about laissez-faire capitalism in a country where big business is subsidized as heavily as it is. laissez-faire my ass. Why don't they practice laissez-faire citizenship? government pays all of us to sit on our asses collecting big paychecks doled out by corporations as back taxes that are justly owed.
posted by mk1gti at 4:04 PM on April 8, 2005


The liberal activists(sock puppets) "do the dirty work," Milloy said, while "the socially responsible investors ... are politically aligned with these people, and they say, you know, JP Morgan ... you're harming the environment and somehow that's going to come back to hurt you."

Fear the sock puppets, fear the sock puppets. There are monsters under the bed. Fear the monsters under the bed. Them and that gosh-darned liberal media (waving another sock-puppet).
posted by mk1gti at 4:15 PM on April 8, 2005


This is all about marketing. Mutual funds need to market themselves in order to attract dollars, and do this in various ways. Some emphasize past earnings, and others the security of their company. This particular fund is marketing to the currently popular neo-con movement, and hoping to reel in emotional investors like davidmsc.
posted by Eekacat at 4:49 PM on April 8, 2005


I think this is a positive thing.

I know that here in Australia, over the past few years, "ethical" investment funds have on average performed significantly better on average than standard investment funds.

If childish nutters like davidmsc want to throw their money away in investments that won't offer any return...more power to them. Suits me just fine.
posted by Jimbob at 5:57 PM on April 8, 2005


"Corporations have no business acting as the U.N. or government or charity. They are engines of economic vitality," Milloy said. "If we want to change the laws to improve human rights, or animal rights, or environmental protection, that's fine, but that is not a business' job."

And this is from the same guys that fight corporate regulation, tooth and nail.
posted by curtm at 6:00 PM on April 8, 2005


This guy doesn't seem to be a very good capitalist.

He disapproves of people freely investing their capital in the manner of their choosing, and attempting to exert influence over the companies in which they invest.

What -- companies should not be accountable to their shareholders? That would be the Enron/Tyco model.

This goes to show that the GOP is not actually interested in promoting capitalism. They are acting on behalf of the managerial class that runs most corporations, and that does not want to be accountable to those who actually own them.
posted by Artifice_Eternity at 6:38 PM on April 8, 2005


Steven Milloy ?

Does anybody here know Steve Milloy's resume ?
posted by troutfishing at 8:35 PM on April 8, 2005


Excellent -- if I had money to invest, I'd plunk down some cash for this fund. 'Bout damn time.
posted by davidmsc at 2:25 PM PST on April 8 [!]


Tell ya what, I'd GIVE you money to invest so long as you move to any of the many places where profits come first.

Like Love Canal. Or bhopol. Or downwind from the 'clean coal' plants. Or how about parts of Iraq where the DU weapons are used.
posted by rough ashlar at 8:45 PM on April 8, 2005


Steven Milloy's resume:

http://www.trwnews.net/Documents/Dow/junkscicom.htm
posted by Seth Finkelstein at 5:14 AM on April 9, 2005


If you step back and let businesses pursue profit without restraint, legitimate needs and desires will be taken care of in an efficient manner.

I can accept that phrase if you cut out "without restraint", but I can't understand how the kind of total cretin who accepts in its totality even exists.

Because that acceptance requires the idea that "*anything* anyone is willing to pay for is good," and accepting that requires, at minimum, a partial intellectual and total moral lobotomy. Hit men. 'nuff said.

Although sometimes I'm really, really tempted to treat strict laissez-faire advocates by their own moral code. Maybe we all should. Ultimate market democracy -- for those who demand it.
posted by namespan at 1:52 PM on April 9, 2005


And ignatz's post -- might fine work there.
posted by namespan at 1:53 PM on April 9, 2005


Corporations want human rights.

They wish to be recognized as persons.


How? In the law, the "citizenship" of a corporation refers only to where it can be sued. A corporation does not have the other legal rights of persons - it cannot vote, it cannot request habeus corpus, it can be eliminated at the will of the legislature by revoking the corporate charter, it cannot be charged with a criminal charge (exept through the officers who caused the violation), nor can a corporation be held in jail.

Now, how precisely, are "coproations" (as if they were independent entities from the men and women who run them) seeking personhood?
posted by thedevildancedlightly at 4:57 PM on April 9, 2005


You can't say you're laissez-faire, then throw a tantrum when non-governmental, market processes like socially responsible investing lead to left-wing results you don't like. Crybabies, I tell ya!
posted by jonp72 at 5:44 PM on April 9, 2005


A corporation does not have the other legal rights of persons - it cannot vote, it cannot request habeus corpus, it can be eliminated at the will of the legislature by revoking the corporate charter, it cannot be charged with a criminal charge (exept through the officers who caused the violation), nor can a corporation be held in jail.

Well, it has "free speech" rights, for one: the Supreme Court has ruled that you cannot prevent corporations from making contributions to political campaigns. And it does have severable criminal liability. It can enter into contracts, it has rights to use the judiciary system, it has due process and equal protection rights, it enjoys 5th amendment "due process" protections against taking of property.

These are pretty substantial rights, all granted by the judicial system with a constitutional basis, and all stemming from a 19th century Supreme Court decision ruling that a corporation has legal "personhood" with respect to many rights.
posted by curtm at 10:27 PM on April 28, 2005


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