Framing the Argument
January 31, 2011In a response to an article I shared on here last week, Prof. Nancy Folbre disagrees with Prof. Glaeser and asserts that economists do not unanimously revere freedom above all else. In fact, writes Folbre, there are a great many economists who believe that private entities — she focuses on corporations — have a responsibility to give back to society, even if this infringes on their freedom.
I do not disagree with Prof. Folbre. I do, however, think that the information she wishes to convey is not being framed properly and, thus, is not realizing its full potential. Of course corporations must dedicate some percentage of their earnings to the country/state/municipality in which they operate, whether through mandates for corporate giving or through the imposition of a corporate tax.
There are two arguments that immediately come to mind as to why this should be. The first will appeal to my lawyer friends, and that is precedent. Private citizens pay an income tax that has been challenged in many courts and has been overturned each time. Private citizens must pay taxes to pay for services which private citizens enjoy, such as law enforcement, road maintenance, public education, and national defense (to name only a few). The courts have largely agreed with these decisions.
Our legal system has decreed that corporations enjoy the same rights and considerations as private citizens. If that is true, it is certainly easily argued that corporations also enjoy services which are provided by a government agency: a functioning judiciary system to resolve disputes, road maintenance (how are workers supposed to arrive safely at the office if no roads are maintained), and a financial system regulatory structure that allows for the guarantee of deposits, loans, and money value vis-a-vis the Federal Reserve Bank. If these are services enjoyed largely by corporations, who but corporations should pay for them?
The second argument is a little more touchy-feely, yet more direct as well, and that is dependence. A successful company benefits from an employed consumer base that earns enough money to purchase its goods. It also relies on an infrastructure system that facilitates consumers to view, compare, and purchase those goods, either on the internet or in the real world. Finally, it needs a well-educated workforce from which to recruit talent that will keep the company competitive and profitable. In that sense, corporations rely on society as much as, if not more than, society relies on corporations.
Prof. Folbre’s piece is a wonderful example of a good idea requiring the right context and framework — the right information, if you will — to make it a convincing argument.
