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Shareholders Pressure Internet Companies on Rights
whamett writes "A group of investment firms is putting their shareholder weight behind asking high-tech companies that deal with repressive regimes to pay more attention to rights violations. Meanwhile, two of the firms have drafted a separate resolution for Cisco shareholders that's up for vote on Tuesday. All this comes not long after Yahoo's involvement in the jailing of a Chinese journalist left a bad taste in everyone's mouth." This isn't the first time that investment firms have stepped up to the plate on human rights violations.
The only way most firms will push to respect human rights is if we make serious domestic penalties for companies that break human rights laws overseas or use companies that break codes.
We can't even get Walmart to stop hiring illegal immigrants and hiding them in the backs of stores in America, how are we going to stop The Gap from using sweatshops or whatever it is they do to get clothing made?
Saskboy's blog is good. 9 out of 10 dentists agree.
...but the almighty dollar will still end up ruling all. If ethics mattered, there wouldn't be any US company at all dealing with China.
As someone who trades stocks, I don't really see this the same way. Generally, I don't buy a stock because I want to own that company, I buy it because I think later I call sell it for more. I wouldn't buy Yahoo because I think they are overvalued, and they are facing increasing pressure from Google which they aren't handling very well. In my opinion, the stock does not have very much upside potential.
Generally, making people mad is costly for a stock. Bad news is bad, but uncertainty is much much worse. Will all of their customers leave? What effect will this have? There's thousands of publicly traded companies out there, so there's no reason to buy stock in one which has an uncertain future.
While i'm glad to see there are some responsible investors out there, they don't amount to a very large portion. When you look at the ownership of Cisco, you see that the two investors mentioned in the article aren't even listed. They each own less than 1% of the company's outstanding shares.
Recently, I was amused by something that happened to Intel. They received an award for corporate social responsibility. The stock traded down that day.
I'm not really a political or litigious person by nature, but as I've aged, I've come to this somewhat depressing conclusion; occasionally, the only way to effect change in this world is to exact some kind of financial cost on those who disregard the rights of their fellow human beings.
David Brancaccio (from public radio's Marketplace) wrote a quite entertaining book that deals with the concept of socially responsible investing, and asks the question of whether or not applying fuzzy concepts of "good " and "evil" to publicly traded companies makes any kind of sense.
He was sort of sarcastic about it, and had a tendency to make fun of new-age hippies showing at the annual shareholder's meeting in Montana with their 100% natural non-bleached cotton moccasins, and painfully detailed dietary requirements, but overall it was funny, and it made an otherwise dry subject a lot more palatable. Check it out if you're sick of O'Reilly books - it was a good companion on the road last summer.
Hopefully, we will continue to develop more accurate and effective ways to evaluate companies and maybe even their corresponding Good:Evil ratios in the future; maybe then companies guilty of human rights violations or severe pollution disasters will feel a direct effect on their bottom line.
Free music from Jack Merlot.
As long as our own government continues to breech their responsibilities, I honestly can't focus on other countries.
Great. If everyone in America felt that way you would become irrelevant in the world wide community when it comes to human rights. You can't wait for America to reach perfection, because it will never happen (and the fact everyone disagrees on what perfection is doesn't help).
It's not the same. Cisco is actively helping them to set up the firewalling to prevent freedom of speech. While the gun companies sells guns to a licensed dealer, who then sells it to an individual who later has it stolen by a crackhead who kills someone with it.
On the other hand, if the gun company sold large quantities of guns and ammo to a repressive government and sent over a bunch of buys to train government thugs on the most efficient means to kill large numbers of peaceful protestors, then we might have a reasonable comparison.
-- Will program for bandwidth
Well, it is rather hypocritical to tell other nations how they should behave, when our own govenment is violating fundamental rights on a massive scale. The best way to influence other countries is to set an example for them to follow, and we're not doing that very well right now. Even if we could force our ideology on other countries (and we can't), we have no right to do so. "Relevance" is far less important than integrity, whether on a personal level or as a nation.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Life is not about equality, it is about equal rights to our bodies and the property we worked hard for.
Today, no one but the ultra-wealthy have a vote. Your ballot choices means zilch -- everyone you vote into office just extends the future power of that office.
In a true free market, every ollar is vote, but being a billionaire isn't total control of the poor.
How much can a billionaire buy in respect to need? Only so many bananas, eggs and gallons of milk. Overbuying leads to waste and loss of wealth.
Maybe the wealthy will buy all the land? How will they maint in it? How will they build on it? How will they clean it, paint it, power it?
Hording doesn't make wealth, hard work does. Many children of the wealthy lose the family fortunes. I know of 3 100-year old contractors in the Midwest that went bankrupt at the hands of the third generation.
Money in the hands of the majority middle class has more power than the minority, except with regards to government. Don't be fooled by what is mostly class hatred. The poor have more opportunities to become rich in a free market than in a regulated one.
"the property we worked hard for"
Hard work often results in very different outcomes, especially when someone lacks the means to overcome a barrier to entry. A rich person with a good idea can develop and implement it, and reap many rewards. A poor person with the same good idea needs to attract investors to overcome the barriers, and then once they do, they have to share the profits with the investors, whose only required skills are having money and being able to tell a good idea from a bad one (not trivial, sure, but it's still infinitely preferable to being the poor guy).
"Hording doesn't make wealth, hard work does."
Investing is an opportunity the poor don't have.
"The poor have more opportunities to become rich in a free market than in a regulated one."
Depends how it's regulated.
"Here's a solution. Smuggle guns and ammo into countries with no respect for private property."
WTF? Repressive regimes and respect for private party are not really mutually exclusive. The West is so eager to deal with China today because they abandoned Socialism for Authoritarian capitalism(a.k.a. Fascism) in the last 20 years. They do have private property as a result and it hasn't stopped them from being a repressive regime. Repressive regimes trample private property rights when it suits them, but as a rule they don't because they want capitalists to invest there so they respect private property, especially of foreigners, to get investment. China really isn't very different from the U.S now. Since a recent Supreme Court ruling government entities in the U.S. can seize your property, reimburse you what suits them, and turn it over to a private developer to profit on.
Western countries are pouring capital into China, and transferring IP there because they think there is a buck to be made there, more so than in any of the aging economies in the U.S. Europe or Japan. When there is a buck to be made Westerners could care less if they are dealing with repressive regimes. Americans were enthusiastic investors in Nazi Germany in the 30's including the Bush family who were the American bankers for the Thyssen family who helped put Hitler in power. The U.S. went out its way to install the Shah of Iran who was one of the Middle East's most repressive rulers, right up there with Saddam. The U.S. installed countless right wing dictators in the Western Hemisphere who "respected private property" of U.S. corporations and the wealthy and ruthlessly killed, kidnapped and tortured everyone else.
"Get the U.N. involved and completely stop technology from getting there."
That is pretty out of touch with reality. Many of the electronics you buy today are MADE IN CHINA, the U.S. or U.N. couldn't boycott them if you tried. I guess you boycott buying stuff them which would have an impact but you would quickly realize the U.S. economy is totally dependent on China. Stop buying there and Walmart's shelves would empty and many smaller towns would realize they have no place to shop without Walmart and its Chinese goods.
The main thing China is importing are raw materials. In the case of oil, for example, they are securing their own oil fields and supplies so they will be largely immune to an oil boycott, which has been a weapon of choice by the U.S. in the past. Pearl Harbor was precipitated by a U.S, British and Dutch oil embargo against Japan. The Chinese are securing oil from Venezuela in particular because Chavez would never follow a U.S. lead boycott against China without the U.S. parking warships next to their oil terminals.
Chinese technological and manufacturing prowess is rapidly eclipsing the U.S. partially thanks to Western companies transferring their manufacturing base and technology R&D centers to China. Cisco gear can't be boycotted from China. Much of it is developed and manufactured there. Cisco's CEO Chambers routinely broadcasts the fact that Cisco is a "Chinese company" now.
Bottomline is the West has more to fear from China boycotting them than the other way around.
@de_machina
Here's a solution. Smuggle guns and ammo into countries with no respect for private property. Let the inner hope of revolution make real change. Rights won't be protected with sanctions. Only by blood do we truly stop those who dare to take our lives, our properties and our natural right to both.
One needs to be careful with this. For two reasons:
1. If you fail to time things correctly, the revolutionists will be caught (one by one) with the guns in their homes and charged with a crime.
2. Violence tends to begat violence.
Of all the revolutions that come to my mind at the moment, only two stand out as only going as far as necessary, and no farther. The first was the American Revolution. They only shed blood after they declared independence from England, and carried the war only to the extent necessary to defend the new nation. Note that the American situation was rather unique in that American were normally well armed, and that their forces were vastly inferior to those of the enemy.
The only other situation I can think of was the transition from the Communist Russian government to the psuedo-democratic government. It was largely a bloodless affair, as the remaining people in power just wanted to make their problems someone else's.
Every other coup that I can think of was a bloody mess with a questionable outcome. The French Revolution was a particularly good example of things going from bad to worse. France eventually recovered, but not until after a series of civil wars, exectutions, and other unpleasentries. From a lot of the feedback I've been getting, it sounds like the Chinese are not really there yet.
So, I guess what I'm saying is that you have to be careful in supporting revolutionaries. Sometimes they're in it for the right reasons, but sometimes they're just looking to seize power themselves.
Javascript + Nintendo DSi = DSiCade
"They would provide for all of your needs and you would work for them as long as you live (or until another corporation paid your corporation to take you from them... or just took over your corporation)."
There is an obvious problem with this approach which is why modern corporations probably wouldn't adopt it even if it was viable. The old IBM did for the most part have indentured life time servants. Unfortunately they are expensive when they get older, and productivity often declines. Skyrocketing health care costs alone speak to disposing of them when they reach middle age. No other corporation is going to buy them at that point, unless there is a corporation in the market for marginal slaves. When there is an abundance of 20-30 year old slaves in Asia who wants a 40 or 50 year old. I guess since they are in indentured servitude you could just deprive them of health care but then their productivity just declines even further. Pretty sure slave holders in the South couldn't just kick them off the plantation when they were no longer useful and no one else would buy them. Killing them outright probably happened but was kind of frowned on even in slave owning circles.
Modern corporations might prefer indentured servitude since they could discard benefits etc, but they would still need a quick, cheap mechanism for discarding the unproductive ones. In fact the system they have now really works a lot better. You are pretty much an indentured servant, as long as you work there and especially if the job market is tight but they can dispose of you when you outlive your usefulness with relative ease and with no concern if you land on the streets and starve.
Thanks to globalization they can buy new indentured servants in China or Burma for pennies an hour and throw them away too in favor of others elsewhere whenever they get bothersome.
All in all advocating that corporations give up the sweet deal they have for the responsibilities of slaving owning looks like kind of step backward.
@de_machina
I have read many post here where people have been criticizing this article,and the place to where it links.
I don't undertsand how this article is anti-chinese people, unless everyone bashing this post equates the chinese government and chinese party members to chinese people.
Yahoo, and the Chinese government did something bad (and is doing) to an ordinary Chinese citizen (took away his rights).
And as people with conscience, we need to stop them from doing this in the future. And so the shareholders have taken the right step.
But how does this translates to an activity against the Chinese people, as far as I understand this is being done to help Chinese people and their rights.
So, please stop being cynical and thinking of western morality conscience people as dissimulators.
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Thanks for the Martin Luther King, Jr. quote. I hadn't seen it before, and it's quite on the mark. I think the crux of my view on the matter lies in the last sentence of your post, though: "Wouldn't it be convenient for us, and our interests and agendas, if that were actually the case?"
I believe that it is the case. From my own experiences.
You see... whereas things in the US in the 1960s were not getting better for black people very quickly at all, and MLK was lamenting the complacency of moderate whites, a group not directly affected by racism and therefore relatively unable to relate to it (a problem that persists with most white Americans today, sadly), in China we have a completely different situation. The Chinese themselves -- the ones directly affected by the government's lack of respect for human rights -- are for the most part supportive of the government, extremely nationalistic, and hopeful about the future.
Of course you can write this off to propaganda, but when you grow up as a kid listening to stories from your dad how when he was a kid, people were allowed one (!) mantou per day and that his grandfather used to give him his and eat treebark instead -- true story -- you start thinking, shit, things are pretty good at the moment. I hear a lot of, "I don't know much about politics, but I want the reform to continue. It's good for China" from the youth of today.
The situation in the 1960s was markedly different. Most whites who knew no black people were completely detached from the situation. "So people don't treat you the way they ought to. That sucks, but they'll get better in time, and right now, I don't want to cause a ruckus," says Whitey. Easy for him to say, he's not the one who has to move to the back of the bus.
A much better analogy (and I'm rather convinced you won't be able to find one) would be a majority of blacks saying, "Hey, these Jim Crow laws aren't half bad! Hell, I don't mind sitting on the back of the bus, because I'm sure things'll get better any day now." That is, the person affected by the "regime" complaining.
Don't get me wrong, the PRC government has at times been quite the bully, and is not respectful of human rights by any stretch. And the Chinese are not unaware of this, nor are they uncritical. But they see improvement -- much improvement -- and are hopeful it will continue. It shows no signs of stopping. Why rock the boat? If things appeared to stagnate, if the government said, "Hell, fuck this capitalism shit, it's back to piao and lining up at the co-op for rice", there would be a revolt, no question. But at the moment, things are stable, and getting better, and not at all slowly.
As for the Cisco/Google/Yahoo BS, I agree completely, it's despicable. We Americans, who are from the "land of the free", have an obligation to hold ourselves to a higher moral standard than the PRC government. The Cisco routers thing in particular is bad, because, had Cisco refused to do it, no one in the PRC would have been worse for wear. The government would have developed its own solution or found someone else to do it, certainly, but at least Cisco wouldn't have been pricks. The Yahoo/Google situation is a little more difficult to judge. If Google had for example done the right thing and refused the PRC's terms, they would have been unable to operate in China. Yahoo is the same. As I mentioned in my post, the vast majority of things blocked by the Chinese internet censorship system are completely irrelevant, outdated, and stupid. The really juicy stuff is all in Chinese and most of it is not blocked. Google and Yahoo make finding this information easy, until some lazy government official notices and orders them to block it. During that period of time, which may be months, ordinary Chinese people are able to find the info using Google and Yahoo's services.
Had they "done the right thing", that would not be the case. People would have to use sohu or baidu which are