The Markets

I would like to address a comment from yesterday. In response to whether FC Now readers trusted corporate America, Chris said, "Yes, because markets generally work, and the companies that survive and thrive are the organizations that generally do right for their customers."

Yes & no. Markets and the regulatory environment often have built in incentives that drive companies to do the wrong thing. Does McDonalds do the right thing for their customers by selling them food that contributes to an epidemic of obesity (even if that is what their consumers want to buy)?

Why does the government spend $1 billion a year to subsidize virgin timber that artificially raises the cost of recycled fiber?

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4 Comments

  • david

    Paul makes a good point. Broaden it a bit - when shareholders demand McDonalds stop marketing to children... when we all as consumer stop looking elsewhere (the government, the courts, etc.) to tell McDonalds to stop supersizing the extra breaded fat...

    That's what I meant earlier about market forces - when we vote with our feet and with our wallets, only then will there be an economic incentive for companies to act in a socially responsible manner.

  • Peter Rees

    Paul's comment brings the issue of 'social responsibility' to the individual and the choices we make. And stimulated the following stream ...

    My family purchases Seventh Generation products. Our choice has been more 'political' than anything else. For my part, I hold my nose and pay the premium. Unlike food stuffs ... where I feel an organic standard can be measured and assessed.

    One thing that irks is the suggestion that if I pay the premium to be socially responsible today then I'll be rewarded with lower prices later ... I still need convincing that day will ever arrive.

    Public companies and companies reliate on the public purse may be more easily directed. But as the people behind The Corporation suggest ... corporate entities exist in one part to exploit resources, i.e. labour, commodities, etc ... and like computers are 'dumb machines' ... sometimes brutal but dumb.

  • Paul from Brand Autopsy

    The term 'socially responsible' should be broadened to include both the company AND the consumer. Today we talk about mostly about socially responsible companies. What about socially responsible customers? I don't visit McDonald's that often because I know I need to balance my diet. If I visit McDonald's 5x a week why should they be to blame for being convenient and having a late-night drive thru?

    While the term "vote with your wallet" is a bit played... McDonald's (and most other companies) will change their practice when folks stop buying their product. They've been in business since 1940. Until we stop ordering it, seems there still is a want for Combo Meal #3.

  • Chris

    re: McDonalds. Maybe a burger and fries aren't the heathiest meal around, but are you suggesting that we'd be better off if we were all still foraging daily for our meals? McDonald's has no long term interest in killing its customers. Anyway, it's the corn syrup in Coke that is making us fat, not the grease at McDonalds. Let's keep the obesity urban legands straight around here :)

    Government subsidizes timber in a misguided effort to buy votes and "protect" jobs. I thought we were talking about business though?