The Standard-Bearer

My former business partner once made a wisecrack that’s stayed with me. I think of it as the “reverse Voltaire”: “I may agree with what you say but I’ll reject to the death your right to say it.” That’s what occurred to me when I read GE CEO Jeffrey Immelt’s rejection of Bernie Sanders’s critique of American business in his op-ed in the Washington Post:

We at GE were interested to read comments Monday by Sen. Bernie Sanders (I-Vt.), who told the New York Daily News editorial board that GE is among the companies that are supposedly “destroying the moral fabric” of America. The senator had been asked to cite examples of corporate greed at its worst. Somehow that got him to talking about us.

GE has been in business for 124 years, and we’ve never been a big hit with socialists. We create wealth and jobs, instead of just calling for them in speeches. We take risks, invest, innovate and produce in ways that today sustain 125,000 U.S. jobs. Our engineers innovate every day to build hardware and software solutions that meet real-world challenges. Our employees are proud of our company. I meet second- and third-generation employees whenever I travel across the country. I am one myself. Our suppliers and partners are proud of our company. Our communities are proud of our company. Our pride, history and hard work are real — the moral fabric of America.

I think he’s conflating “moral fabric” with “economic fabric”. Once upon a time there was something called “political economy”, the study of the conditions of consumption and production within a country. Political economy was practically inseparable from ethics. Adam Smith was a moral philosopher.

Those days are gone. They don’t teach political economy in business school.

I utterly reject Jeffrey Immelt’s lecturing me on the moral fabric of the United States. He should remove the beam from his eye before admonishing me to remove the mote from my own. I see nothing in Mr. Immelt’s education or background that suggests that he’s had any formal training in ethics or morality after he was 12 years old. He’s no more an authority on ethics or morality than the average guy on the street.

GE excels at making money but it has never been a particularly good U. S. citizen or citizen of the world. The company has been involved in shady schemes, cover-ups, and sharp business practices for longer than I’ve been alive.

GE is cagey about where it earns its money but by every indication it still earns half of its revenues in the United States. About a third of its employees are in the U. S.—its U. S. employee base has been shrinking for generations, even as the company’s revenues grew.

We really should start taking a page out of the rulebooks that other countries use. Most developed (and many developing) countries require companies to have local partners or establish certain levels of employment in their countries if they want to do business in those countries. GE doesn’t have large foreign footprints through the goodness of its heart. It’s a strategy for expanding its customer base. We might think about imposing some of the same requirements on international companies like GE that France, Germany, and China do.

There may be companies that can make a good case for how they contribute to the moral fabric of the United States but GE isn’t one of them and Mr. Immelt is a lousy standard-bearer for that cause.