Big businesses, through their veils of incorporation, are designed to do one thing and one thing only: make a profit. Every activity performed by the corporate organization is geared toward maximizing this manna. Assigning human attributes to a corporation such as altruism, ethics or morality are erroneous. Although conceived by humans and composed of humans, corporations are not human and can not be assigned these uniquely human characteristics. Government regulatory policies that do not recognize this are likely to be flawed and ineffective.
This seems to be a relatively simple observation and yet it is not difficult to here corporations personified in news broadcasts and conversations. The danger is that by personifying big business there is a temptation to transfer the expectation of human morality and ethics to the decisions made by the corporation. This is wrong. There are no such moral imperatives in the corporate decision making process. Big business is a moth and profits are their flame. They will stop at nothing in their attempt to immolate themselves.
Before their incineration on the torch of profits, the Objectivists would argue that rationality would intervene and the corporation would act to prevent its own demise. But isn’t Objectivism one of those human traits? It behooves us to remember that the driving force in Rearden Steel was a single man and not a board of directors reacting to minute by minute market conditions. Things have changed since Ayn Rand gave us Hank Rearden in Atlas Shrugged. Big business does not have a moral compass that guides their actions. All they have is the flame.
In his testimony before the House of Representatives, former Fed Chairman Alan Greenspan, himself an Objectivist, recognized the flaw in assuming that corporate decisions are rationale and driven by a common ethos. In a prepared statement Greenspan stated, “Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity (myself especially) are in a state of shocked disbelief.”
Greenspan would not be in disbelief if he had recognized that corporations are not human and do not act in their own self interest. Because they lack a “self”, a corporation can not have a self interest.
Because big business is incapable of making ethics based decisions it is up to the Federal government to supply that framework through appropriate regulations. Regulations are a necessary foil to the inevitable directions big business would purse when left to their own devices. Isn’t that an appropriate role for government, to protect the citizens it represents against all threats both external and internal? If ever there were an internal threat it is unbridled corporate profit making.
Those who choose to deny recent history and maintain that regulations are bad and capitalism is a self leveling institution should spend a few minutes watching a moth interact with a flame.