Almost every major problem facing society these days—financial reform, unemployment, environmental disasters, the energy crisis, climate change, etc.—seems to be framed as a choice between free markets and “big government.” What it really comes down to is trust: do you trust government bureaucrats more than corporate executives? Frankly, I don’t trust either group without reservation, and it seems to me a good argument can be made that both too much regulation and too little regulation can cause problems. But, the way things have gone in recent years makes it perfectly plain that the burden of proof is on the conservatives.
Liberals who want solid governmental oversight over investment bankers and giant conglomerates are not, for the most part, leftist ideologues; they’re pragmatists acting out of self defense. Face it, no one would have dreamed up the EPA if manufacturers didn’t insist on polluting our air and water. We wouldn’t need the FDA if food and drug producers didn’t put contaminated products on the market. We wouldn’t bother with an SEC if brokerage firms didn’t try to pull the wool over the eyes of investors.
Meanwhile, libertarians and other free marketeers try to convince us that we’d all be better off if the government would only get out of the way so the good people running corporations can do their thing. I suggest they save their breath. Instead of trying to win an ideological argument, they should focus on their own allies and make corporate leaders prove that they’re worthy of our trust. Let them demonstrate that they’re capable of consistently acting with honesty, integrity, and a sense of public virtue. After all, virtue is supposed to be a conservative value, and so is accountability. And right now the evidence is against the free market argument. Given the events of the past two years—not to mention most of modern history—we’d be idiots to trust any CEO who runs something bigger than a clothing shop.
Here’s my modest proposal: corporate big shots should create a self-policing body with real teeth. Many professions have organizations that hold their members accountable. Doctors have the AMA; lawyers have the Bar Association; and psychologists, social workers, and others have their equivalents. Of course, these associations do not eliminate the need for laws and public oversight, but they keep the need for regulation to a minimum by exacting a heavy price on members who violate their ethical and behavioral standards. Their penalties are effective deterrents; revoking someone’s membership can seriously damage his or her career.
I would urge responsible corporate executives to create a legitimate professional organization across their many industries. Offer membership to anyone at the level of, say, vice president and higher, and sign up some big-name CEOs right off the bat, so the association starts out with credibility. Set the bar high with a rigorous behavioral code, not just regarding obvious ethical violations, but also issues like how employees should be treated, remuneration policies, non-deceptive advertising and marketing, the impact of corporate decisions on communities and the environment, and so forth. Maybe even steal an idea from physicians, and start the code with “First do no harm.” Then show us you’re capable of enforcing the standards, so violators feel the pain, with financial loss, shame-inducing exposure and career-threatening ostracism. In short, make it really a bad idea to act against the common good.
In other words, corporate leaders have to do what parents expect their misbehaving teenagers to do: prove they can be trusted. If, in due time—say a decade or two—the public is satisfied that corporate executives can be counted on to act more like virtuous citizens than greedy, selfish scoundrels, liberals will have no excuse to spend our tax dollars on excessive regulation. Until then, we have no choice but to ask our government to protect us.
I’m not holding my breath, but just in case some corporate honchos are paying attention, here’s my final suggestion. Name the organization the Association of Business Executives—ABE, in honor of the president whose name is synonymous with honesty. Live up to that acronym, and even the staunchest lefties might agree to a looser grip on your free market.