Friday, January 10, 2020

Companies Don't Exist Solely for Profit

At Blizzard HQ in Irvine, California, both the “Think Globally” and “Every Voice Matters” value plaques have been covered by paper by employees who disagree with the decisions made by Blizzard over the past 48 hours. -Source

Yesterday, a streamer for HearthStone, a game published by Blizzard, announced during a stream that they support the Hong Kong people as they protest against China’s crackdown on their protests. Blizzard moved quickly and decisively… to punish the streamer by revoking money the streamer had earned during the season, as well as breaking a contract with two hosts of a show the streamer was on, though they weren’t aware of the streamer’s intentions and quickly cut to commercial after the streamer spoke.

Here’s a CNET article breaking down the history and story.

This isn’t the first time we’ve seen an American company kowtow to a censor-happy foreign power. The examples of this abhorrent behavior from companies, unfortunately, are coming more and more frequently.

Earlier this summer Nike pulled from sale a model of shoes after the shoe’s designer publicized their pro-Hong Kong views.

South Park earlier this week appears to have intentionally incited the ire of China by criticizing China’s censorship-first policies in an episode named “Band In China.”

Google backed down from building a censored search engine targeted at Chinese and other pro-censorship countries only after massive employee protests roiled over into public dissent in the media. Less publicized are other companies that quietly supplicate themselves to China’s policies (ahem, Microsoft) by filtering their searches to hide results unfavorable to the ruling powers in China.

It Hasn’t Always Been This Way

Though it seems like it sometimes, companies haven’t always put profit first, or chased profits at the expense of all else. In fact, it’s a relatively recent trend — one in the last 50 years.

In 1970, Milton Friedman, a popular and influential economist, made an argument that companies had no duty to serve their employees, or benefit the world they exist in. Their duty was solely to maximize their profit, and minimize their costs, in order to generate the most value. 

The name of this paper, “The Social Responsibility of Business is to Increase its Profits” made it clear that Friedman knew that this view would prove volatile, and potentially repugnant to those who felt the increased wealth, stability, and resources of large and profitable companies was to use their attributes as a force for good.

This view wasn’t immediately adopted. Many large companies continued spending some of their dollars to improve the world, or provide employees with more than the acceptable level of benefits, or pay. Shareholders in these companies rewarded those companies that behaved in this way.

However, this view gained traction, and in 1997 a group of influential CEOs calling themselves the “Business Roundtable” announced that the “principal objective of a business enterprise is to generate economic returns to its owners.”

Soon, this philosophy trickled down to companies around the world, as they pushed down labor costs, revoked or reduced benefits, and started to actively band together in washington to lobby lawmakers to also adopt this view, and begin to see companies in a simpler way — one which utilizes their resources to make money at the smallest expense possible.

What Can I Do?

It’s the responsibility of all of us to stand up to companies that behave in this way. We don’t have lobbyists in washington, but we can vote with our dollars. Stop spending money on companies and countries that behave in ways that are unethical.

There is now a strong push for companies to operate in an ethical way, and consumers are starting to take notice. Companies like Ethical Consumer have sprung up to help consumers find products and companies that behave in a more ethical way.

Also, companies are comprised of employees. Seek our companies that treat their employees well and abandon companies that don’t. That’s clearly harder than it seems — we all have to pay our rent and eat. But look for exits from companies which come to light and are doing unethical things.
Techies in particular don’t recognize their power. Technical folks are an incredibly powerful force for change — look at the protests at Google that led to real change at the company.

A card-sorting system IBM built for Nazi Germany, displayed in the United States Holocaust Museum in Washington, D.C.

These folks are also the most vulnerable — they rarely recognize the tangible consequences to their actions — an often repeated example is how IBM built a tracking computer system for the Nazis that was used to catalog and manage the Jewish prisoner populations as they were shuttled and kept at concentration camps.

Recognize your power. Speak up. Show your values with your dollars and your votes. Together we can do something.

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