Why are people so suspicious of Big Business in the Western world ?

[chequita guevara]

Originally posted by aneeshm
Half the question remains unanswered - why are we in India so trusting ?

You make the classic mistake of equating what you think with what everyone else thinks. If India was so trusting of big corporations, Congress wouldn't have been re-elected.

[aneeshm]

What ? I mean that seriously - I cannot understand what the Congress being re-elected has to do with big business . The Congress was the one that first liberalised the Indian economy - not exactly anti-big-business , is it ?

And as I said - the people with whom I come in contact all share this trust of the family-owned businesses ( I should have made that more clear - not all big business , but family-owned big business ) , irrespective of economic status . The common hatred is towards the politicians who indulge in corruption , steal public money , and abuse power in a number of other ways . And this hatred is universal .

[Fake Boris]

Yet the whole of India trusts them to behave properly , and behave they do

And we've seen how representative of India your ideas are...

[DAVOUT]

Just an example of the Indian faith ... in Europe :

The world leader in the tyres industry is Michelin named from the founder. This company is still managed by a family member (Edouard Michelin who incidentally prepared with my son a well knowned engineering school).

The family is now owning a small percentage of the shares, but has retained all power through a special juridical organization (commandite par action), which is per se a demonstration of faith by the shareholders.

[Dr Strangelove]

You have to understand also that at the time when "big business" began developing in the US business ethics to govern the behavior of these entities didn't exist. Thus when the first wave of railroad construction began there were actual acts of sabotage carried out against competitors. In those early days there would sometimes be different railroad companies building rail lines to the same destination at the same time. I believe that "Commodore" Vanderbilt used to have his crews visit the worksites of the other companies and destroy tracks and equipment and intimidate the workers. Early railroads also used intimidation tactics to persuade land owners to sell land to them. As another example, consider the case of John D. Rockefeller. He drove his competitors out of business by bribing railroad owners into giving him special discount rates to ship his oil and having them set penalty rates for his competitors' business.

In the 19th century mining companies often essentially owned the towns where their workers lived. They not only set wages but also set rents and prices at the local stores. They could set the cost of living so high that workers were reduced to near slavery. Remember that in those days a person could actually be put in prison for failure to pay a debt. The mining company often also owned the local law enforcement and often even had enough influence to name the local judiciary. They even often owned the local doctor. If a worker got sick or hurt from conditions at the workplace the company doctor would disavow the worker's illness.

Even in more modern days there ar innumerable instances of big business embezzling stock holders' money, lying to the public, engaging in unfair business tactics, mistreating their workers and etc., etc. American big business also has a long history of magnanimous charity. The Rockerfellers, Vanderbilts, Carnegies, Melons, DuPonts and even good ol' Bill Gates have contributed billions to American education, arts and other charities. Where do you think that American Ivy League schools got their endowments? What is Harvard's endowment fund now? It's in the billions if I recall. Andrew Carnegie sold US Steel before he died and gave virtually his entire estate away. He built thousands of libraries all across the USA. The thing is that all this charity doesn't necessarily excuse bad behavior. I am that the families of workers killed by Pinkerton agents hired to break strikes at Carnegie's steel plants were less than thankful for his libraries. maybe the reason that American are more skeptical of big business is that our conciousness of the way that business gets big is a bit more evolved than that of the Indian public.

[Terra Nullius]

Actually, family owned companies still enjoy a high level of trust. -- insert arbitrary statistic here -- It's global corporatism that people tend to get upset about. These are Indian companies, operating out of India and employing Indian labour. There's a certain amount of national pride tied up in the local perception of these companies.

Now watch what happens if:
1. Tata decides to sell up it's auto-rickshaw business
2. A multinational corp. based in China buys a controlling interest.
3. They announce plans to shut down all Indian manufacturing because their analysis finds the business to be uncompetitive.
4. The gov't gets scared about all the lay-offs and negotiates a new plan to keep the workshops open.
5. As part of the plan, the gov't agrees to remove all pedal rickshaws from major cities.
6. Two years later, the corp. gets a new GM and decides to scrap all rickshaw plants anyway for 'operational reasons.'
7. The same corp. then sets up a brand new manufacturing plant in Burma and imports rickshaws from there.
8. All profits get moved offshore. The new plant is found to be releasing massive levels of pollutants into the atmosphere.

Now go and ask people about their loyalty to the new Tata brand.

[Patroklos]

People are paranoid.

And greedy.

And most of all jealous.

[Ecthy]

To put it brief, there's a general perception that companies haven't been taking on their social responsibility if they weren't forced to.

[Darius871]

Re: Why are people so suspicious of Big Business in the Western world ?

Originally posted by aneeshm
Over here in India , the buggest businesses are run and owned by the great business families ( the Tatas , the Birlas , the Godrejs , the Ambanis , etc. ) of India . The business always stays within family hands . All top managerial posts are , as far as I know , filled by family members .

There's your answer. If business x commits a certain unsavory act, people know they can point the finger at family y, making privately-owned companies more accountable and thus more responsible. The "owners" of publicly traded corporations are thousands of stockholders protected by limited liability, meaning they see no evil and hear no evil as long as their stock remains profitable.

[Patroklos]

I think the propblem is that for some ungodly reason people assume buisnesses have social responsibilites.

There sole purpose is to make profit within the confines of the law. Alot of distrust is because recently they haven't been doing so in many cases (like .0001% overall). Buisnesses are only beholden to workers for what an employment contract says. If you sign one with a pension, you should get it. If you sign one without it, how is that the companies fault.

But besides that, the real reason most people don't like them is because they see successful people and enterprises and are jealous.

[:) Smiley]

Originally posted by Terra Nullius
Actually, family owned companies still enjoy a high level of trust. -- insert arbitrary statistic here -- It's global corporatism that people tend to get upset about. These are Indian companies, operating out of India and employing Indian labour. There's a certain amount of national pride tied up in the local perception of these companies.

This may well be the main point. In most places, the nation's industries are viewed as key in the development process to catch up to the West. In the West, there's no one to catch up to.

[Dinner]

I suppose it is true that people trust family owned companies a bit more simply because there is a face and a person who can make moral choices instead of just doing what ever makes the quickest buck. As it turns out many of the best stocks to own are stocks which the founder or at least the founding family own a large share because they tend to act cautiously towards their/their family legency vs some CEO who just wants to show a good result next quarter, collect his bonus, then move on.

[KrazyHorse]

Originally posted by Sandman


I'm not about to trust a self-declared Randian libertarian from one of the poorest places on Earth on whether Indians are trusting of big business.

[Darius871]

Originally posted by Oerdin
I suppose it is true that people trust family owned companies a bit more simply because there is a face and a person who can make moral choices instead of just doing what ever makes the quickest buck. As it turns out many of the best stocks to own are stocks which the founder or at least the founding family own a large share because they tend to act cautiously towards their/their family legency vs some CEO who just wants to show a good result next quarter, collect his bonus, then move on.

Precisely.

[notyoueither]

Originally posted by aneeshm
The question remains - why ? Why do Indians trust , and not have that trust violated , and why do you not trust , and get behaviour in line with your expectations ?

Union Carbide was not an extraordinary company.

Does that help you understand why some people are suspicious of large corporations?