From Peter Leithart’s summary of an article by Michael Naughton:
The same pressures [of maximizing profit for institutional investors] make it difficult to create a “community of work.” As Naughton says, “Current ownership patterns of publicly traded companies foster only one relationship between stockholder and company: stock price. This leads to a disconnected relationship between property holders (stockholders), on the one hand, and labor and the communities in which the property resides, on the other hand. The market’s relentless pressure for maximum investor returns leads corporations to unleash what The Wall Street Journal has called the ‘four horsemen of the workplace’: (1) downsizing; (2) moving operations to low-wage countries; (3) increased automation; and (4) the use of temporary workers. These horsemen can be legitimately used to meet unusual economic, productive, and even political challenges to any firm, but to use them as ordinary business practice undermines any attempt to build a community at work and a workplace presence in the community. Nevertheless, they have become staples of ‘disconnected’ capital’s search for ever-increasing returns, regardless of the social effects.” According to Catholic social teaching, work is a social activity, but the sociality of work gets fragmented when laborers are scattered all over the globe.
Naughton points to examples of companies that resist these pressures (e.g., Herman Miller, an office furniture manufacturer), but he recognizes that the problem is at bottom a spiritual one: “Only a spirituality of work that reminds us daily of why we are here and where we should hope to be going will have the capacity to help executives, and us, to see the vocational calling of work.”
I also appreciated Naughton’s critique of Tyco CEO Dennis Kozlowski’s claim to have produced $37 billion in shareholder wealth: “One wonders what the other employees at Tyco did to increase company wealth, and how they felt when they read Kozlowski’s words.”
I think that this is a good illustration that a market economy needs to be situated in a larger moral framework rather than simply in laws about what one can and can’t do. It makes more sense to me now than it did 5 or so years ago that the culture that surrounds a market economy should provide a lot of the necessary boundaries. If that’s not the case, then either profit maximization becomes the only and highest goal to the exclusion of other goods (as discussed above) or laws will overregulate the economy in order to prevent abuses. In other words, you have the problem of unaccountable capitalism (where the market is either exempt from morality or defines morality as profitability) or a state that oversteps it boundaries in order to manage and mandate the economy’s outcomes according to certain notions of the public good (the Democrats’ approach) or plan the economy from top to bottom (full-blown socialism).
The challenge seems to me to be differentiating between what immoral things should be illegal and what immoral things should simply be punished by the market. As Doug Wilson often says, we need to distinguish between sins and crimes. Here’s one example of him trying to do just that in a video discussion of laws against racial discrimination. Note that he sees the church and family (part of the broader culture outside the state) as the authorities best equipped to deal with discriminatory behavior rather than the state. I’m not sure that I completely agree, and I’m sure that there are many black Christians who feel that these laws have been important in securing their place in society after centuries of state-mandated and -sanctioned discrimination, but I think that the way that he approaches this is good.