It’s worthwhile to check out the February 13, 2012 issue of Time magazine, particularly Rana Foroohar’s column titled, “Companies are the new countries.”
The main point of the column is straightforward: Companies are becoming more important than countries. While countries like Greece and the US are awash in debt that looks hopelessly permanent, she says “the top companies of the world seem to exist in a world apart: they are booming…they are operating in a space that is increasingly supranational – disconnected from local concerns and problems in their home markets.”
That sentence set off alarm bells in my head, as it should for all Americans. Remember not so long ago when there were a lot of local and regional companies? I do. I banked at the local bank that was based in my city. I shopped at a small grocery chain that was headquartered in my state. I went to the local hardware store for my home repair needs. The stuff I bought there was manufactured in Chicago, or New York, or maybe Texas. As a college student, I worked summers in a factory that made aluminum furniture parts. Sometimes I would bump into the owner of the company as he walked around the factory, which employed about 500 people.
The local business owners supported the city where I lived. They worked hard in their businesses and if they were fortunate, they made a lot of money and became wealthy. But they also thought long and hard about laying people off when business was slow. They knew the folks that worked for them: their kids went to school together, they often attended the same church, and many times they bumped into employees and their families when they went to the grocery store. As a result, they felt a deep loyalty to their employees and the city and state of which they and their families were a part.
Contrast that to modern day America. The company you work for is more likely to be a major corporation, or if it is a “local” business, it could very well be owned by a “private equity group.” The people who make the decisions are thousands of miles away, in New York, Saudi Arabia or China. All these executives care about is the price of the stock and this month’s quarterly return-on-investment. If firing five hundred people will boost their ROI a percentage point, they’ll fire them in the blink of an eye. They see it as just another day at the office and another day closer to their million dollar bonus at year end.
An executive at Apple was recently quoted as saying, “We don’t have an obligation to solve America’s problems.” Apple certainly demonstrates that attitude in how they conduct business – they are perfectly happy to sell tens of millions of their product in the US, but they employ only about fifty thousand people here (mostly low paying retail jobs) versus over one million factory workers in China. Apple also has about $60 billion in overseas bank accounts, keeping the money sequestered offshore to avoid paying taxes in the US.
You might be thinking that Apple has every right to turn their back on the US and treat it as any other market. However, Apple also expects the United States and its taxpayers to exercise its political clout to protect their intellectual property rights in foreign countries. And they rely on the US Navy to keep shipping lanes secure so they can ship their products to the US from China. They are perfectly willing to use the resources of their “home” country, but not nearly as willing to give back.
I’m picking on Apple because everyone knows them. But there are tens of thousands of small and mid-sized companies all over the US that are owned and controlled by ultra-wealthy private equity investors, many of whom are in the Middle East and other foreign countries. These days there is a very strong possibility that, even if you work for a company that looks All-American to outsiders, your ultimate boss does not speak English as a first language.
My new thriller American Epitaph, came about because I started thinking out into the future about what could happen if the trend of the past twenty years continues. What would happen if companies became even more powerful and in essence became one and the same as the government? What would life be like if the one-percent (to use the current term) really took over? It’s a scary story based on a scary idea. But unfortunately, there is an all-too-real possibility that it could happen.
