Business myths (2020)

Book Review from the January 2020 issue of the Socialist Standard

The Mythology of Business. David Whyte. IER in association with CLASS.

This short 40-page pamphlet, aimed at activist trade unionists, sets out to deal with some of the arguments put forward by pro-business lobbies and economists for allowing private enterprises as much freedom as possible to pursue their profit-making as they think fit. Arguments such as the laughable ‘trickle down’ theory, that red tape hinders business activity, and that health and safety legislation has gone mad, are discussed and the facts presented.

The best part deals with the claim that ‘businesses can be trusted to be responsible’ where Whyte makes the point that the directors of a company have a legal obligation to the shareholders who own it. So ‘even if Directors would rather be responsible, they are bound by law to pursue the success of the company and its members’. In any event, whatever the law says, ‘the narrowly competitive and profit-oriented nature of business organisations means they can never prioritise broader social goals.’

Where the pamphlet falls down is in the conclusion that politicians do not have to ‘put the interest of business first’ but that they can choose to pursue policies ‘to create a better, fairer and more sustainable society’. The fact is that, as long as production is in the hands of competing profit-seeking enterprises (state as well as private), politicians have to pursue a general pro-business policy.

This does not preclude governments introducing regulations that are in the longer term overall interest of the capitalist class as a whole and which do restrict the activity of individual businesses. This is still putting ‘the interest of business first’, but the interest of business in general, not necessarily that of particular businesses, in fact even against “such interests”. Politicians in charge if governments are in the same sort of position as Whyte points out that directors in charge of companies are: their ‘obligations always translate[s] as the long-term profitability and/or economic viability of the company [or, in the case of politicians, of the capitalist economy]’.

For instance, even in the nineteenth-century laws were enacted limiting the hours of work that employers could impose on employees as overworking them risked the physical deterioration of the working class, so making it less efficient and productive of profit. Factory-owning capitalists opposed these laws (and used similar invalid and laughable arguments such as profits being made in the last hour of work) and so had to be forced by the state to act in the general capitalist interest.

Whyte’s pamphlet shows that there are still business leaders and their apologists who put their particular immediate short-term interest before that of the capitalist class as a whole. But what else can be expected when production is in the hands of competing profit-seeking enterprises, each seeking to maximise their profits? Capitalism without the state to hold the ring just wouldn’t work.

Adam Buick