So, should companies be voicing their perspective on political issues?
The conventional wisdom is that private sector companies should focus on the business of maximizing profits, i.e., both Republicans and Democrats drink Coke. Economics shows that corporations are highly efficient at selling “private goods”, goods and services that are excludable and rivalrous. Excludable means that Individuals can be effectively excluded from using them, and rivalrous means that the use by one individual reduces the good's availability to others. People cannot get a seat on a Delta flight without paying for it, and once that seat is taken, no one else can use it during the flight.
Government on the other hand are one of the few entities that can effectively provide “public goods”, goods and services that are non-excludable and non-rivalrous. Clean air, street lighting, military defense, laws, are all examples of items that can be consumed without purchase and my use of them does not prevent others usage. Preserving the ability to vote is a public good under the purvey of local, state and Federal legislation, companies typically should not get involved in the process.
Yet, private sector companies have been involved in the political process for some time, especially through financial lobbying. The impact of lobbying became more pronounced in 2008 with the Supreme Court ruling on Citizens United vs. Federal Election Committee, allowed corporations and other outside groups to spend unlimited money on campaign advertising as long as they are not formally “coordinating” with a candidate or political party.
The ruling reversed previous judicial precedent, and brought enormous spending by outside groups into political causes with money flowing through super-PACs. The Supreme Court decision bolstered the argument that corporations are essentially people. An argument that was espoused and jeered down the political spectrum.
Surprisingly over the past decade, companies have become more like people, or more precisely they are more willing to represent the voices of the people that they serve. Historically, companies only focused on their bottom-line profits to satisfy shareholders, but now they are including perspectives of their employees, customers, and the positions of their executives.
With millennials an increasing voice the workforce, this cohort is expecting companies to take a greater stance on social concerns. Whereas before companies may have been more tentative in expressing their opinions as they didn’t want to disenfranchise their core customer groups, now they realize that the core groups are expanding and customers are more diverse. For example, Hermes, a luxury fashion company, has progressed from barring entry to Oprah Winfrey to having non-white people prominently shown on their ads. The public is also more comfortable with companies speaking up on political issues.
Companies voicing their support for certain legislation is a logical and more transparent evolution from the practice of sending campaign financing to certain politicians. As teachers, we encourage students to express their perspective. We train them to make a strong argument and then voice it. The Democratic party might be happier now that companies are acting more like people and expressing their voices. But just as the Republicans have found, this could be a double-edged sword.
We should encourage companies to express their voices, and recognize just like people that their perspectives may change depending on their community and financial situation.
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