April 14, Michael Davis, economics professor at SMU Dallas Cox School of Business, for a piece examining the effectiveness and role of the “corporate we” communications from companies that decide to take sides on political issues. Published in the Orange County Register: https://bit.ly/3tk9Ejo
What does it mean when a corporation takes a stand on some divisive political issue? If a corporation comes out and says “this is what we think,” who is this we?
It’s an important question.
There was a time when drinking a coke on a Delta airlines flight while traveling to the All Star Game was not a political act. No more. Corporations like Coca-Cola, Delta Airlines and Major League baseball now think it important to let you know the corporate view on some of the most complex and divisive issues of the day. Most recently, of course, a number of corporations have made loud and confident statements condemning changes to voting rules in several states.
By Michael L. Davis
What does it mean when a corporation takes a stand on some divisive political issue? If a corporation comes out and says “this is what we think,” who is this we?
It’s an important question.
There was a time when drinking a coke on a Delta airlines flight while traveling to the All Star Game was not a political act. No more. Corporations like Coca-Cola, Delta Airlines and Major League baseball now think it important to let you know the corporate view on some of the most complex and divisive issues of the day. Most recently, of course, a number of corporations have made loud and confident statements condemning changes to voting rules in several states.
Why should we care what they think?
They’re obviously not claiming to have special expertise on the technical details of the law. If Georgia wanted to regulate sweeteners in soft drinks, I’d like to know Coca-Cola’s views on the matter. But I doubt that Coca-Cola knows more than I do about, say, the value of no-excuse absentee voting (something, by the way, that Georgia, unlike many other states, allows).
Nor is it true that these technical voting rules have much impact on the operations of the business. The safety of a Delta flight from Paris to Atlanta does not depend on whether Georgia voters can request an absentee ballot within three months or six months before the election.
The statement from Major League Baseball announcing their decision to pull the All Star Game from Atlanta is notable as an example of unserious thought in service of shameless hypocrisy. But it’s also a useful example of the problem of the corporate “we.”
Commissioner Rob Manfred proclaimed — seriously, one assumes — that “Major League Baseball fundamentally supports voting rights for all Americans and opposes restrictions to the ballot box.” That makes as much sense as a Yankee fan saying he “supports competitive baseball and opposes restrictions on the actions of players during a game.” Ballot restrictions, like restrictions on players, have another name: rules. One can debate the rules. Should the strike zone be extended? Should absentee ballots be verified by signature or some other method? But without rules, baseball and voting become meaningless contests of ruthless strength.
Manfred — or more likely a publicist — gave the game away when he wrote “the best way to demonstrate our values as a sport is by relocating this year’s All-Star Game.” It is not, you see, really about the tradeoffs memorialized by the voting rules. MLB, Delta, Coca-Cola and the other virtue signaling corporations want to “demonstrate our values.”
But again, what to make of this “our.” Exactly whose values must be demonstrated? Corporations are just big collections of people. Delta airlines has over 90.000 employees. Their biggest stockholder, Vanguard, represents over 30 million investors. When Delta engages in the sort of virtue signaling that they seem to think necessary, are they speaking for all those people — including the many stakeholders who voted for the politicians who approved the rules?
All this corporate posturing is especially annoying to economists like me who for years have been taking the side of corporations in the debate about corporate taxes. It’s not that we’re especially fond of corporations, it’s just that we don’t think government should raise taxes without knowing who exactly is going to pay those taxes. If the government taxes the profits of Delta, they’re not taxing some flesh and blood person with DAL on the vanity plates of his Ferrari. They’re taxing Delta’s stockholders, the customers and the worker. Exactly how much of the tax is paid by each of those groups remains a mystery.
Despite the legal fictions surrounding corporate identity, a corporation is not a person. Because it’s hard to know the “we” behind the corporate name, corporate taxes are a bad idea. And so is the idea that corporate statements about matters not directly involving the corporations are anything more than self-aggrandizing blather.
Michael L. Davis is an economics professor at the SMU Dallas Cox School of Business.