Thursday, April 28, 2011

Corporate give and take

A few years ago, I spoke with a man who lived in Sweden but owned a business with manufacturing in Thailand. He traveled to Bangkok regularly to check on production. Thinking about the low cost of living in Thailand for “westerners” or people with money in their pocket, I asked him why he didn’t live in Bangkok. Ugh! Too noisy and too dusty, he replied. He much preferred Sweden.

Although far away, it makes sense that his company located production where wages are low, raw materials cheap, and corporate taxes, I assume, correspondingly minimal. That’s what companies do – produce things as inexpensively as possible.

And although I’ve heard Thailand is a lovely country, I’m not sure I would want to live there full-time either. But there’s the rub: When I don’t live where I work, there’s not a lot of incentive for me to care what happens when I’m away as long as I get what I need to keep my business going.

I’m not implying my acquaintance was a heartless or uncaring person. But as they say, he “had no skin in the game” – literally. As long as he didn’t live in Thailand, I assume he had no direct interest in whether or not the community where he did business recouped its return on investment, and then some, in the roads, utilities, and other publicly funded infrastructure and services that benefited his company.

In this age of distant and diffuse corporate ownership, we need policies that reduce the disjuncture between absentee owners and local responsibility. We obviously can’t tell people where to live and work, but we can do a better job of creating tax and ownership policies that make companies behave as if they have a long-term vested interest in communities from which they derive their profits. (After all, in the United States, corporations are “persons.”) We need to reestablish the connection between where companies do business and what they give back to host communities.

Or think of it this way. We need to tax company owners and corporate shareholders for the privilege of not living in Bangkok.

See related post Age of selfishness (or getting my way - what I want, when I want, how I want).

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