Thursday, January 14, 2010

Google, China, and Market Morality

Yesterday's news that Google might pull out of China didn't come as a major surprise. Though America's corporate leadership has happily handed our industrial might to the Chinese in exchange for all that cheap crap we can buy at WalMart, China remains stolidly socialist. Not socialist in the "we provide affordable health care to our citizens" way. Socialist in the old school way, meaning repressing speech and imprisoning dissidents.

A series of recent cyberattacks targeting the gmail accounts of Chinese human rights activists appear to have come from proxies of the Chinese Communist party, and were part of an ongoing and aggressive campaign. It was enough to make Google decide that perhaps their corporate ethics..which are all about openness and freedom..might preclude their being able to operate in such an intensely repressive centralized state.

The response of Wall Street was also not surprising. Shares of Baidu, the search engine that is officially approved by the Chinese government, soared over 13% yesterday at the opening bell. Shares of google dropped, although they clawed back a bit by the end of the trading day. The reasons behind this are obvious. Google may be giving up potential profits and a major market. Baidu, which already has a majority of Chinese market share, stands to materially gain. If your interest is in both short-term and mid-term profit and shareholder return in the next several quarters, then it makes total sense to divest from google and buy up Baidu. That is, in point of fact, the ethic that governs our marketplace. Though the argument is often made that the movement of capital in the free market is amoral, it moves and acts according to a clear set of norms. Profit maximization is a moral framework.

This market morality is, unfortunately, often directly opposed to the values that shaped our free and democratic republic. When the pursuit of profit-maximization is allowed to stomp on the pursuit of life and liberty, then we should recognize there are often radical and irreconcilable differences between the ethic of the market and the ethic of universal human liberty. Human beings who are part of the marketplace need to be aware that when they choose market over liberty, they are not just making a business decision. They are making a moral choice, one that defines them.

They have to choose which set of values will govern their decisions.

One cannot, as a dear friend once told me, serve two masters.

3 comments:

  1. I'm a big fan of free-markets and regularly read the Cato institutes various reports and studies on how the free-market works best. However, the majority of the time I disagree with them on global markets and doing business with whoever. Problem is they are thoroughly secular and I am thoroughly Christian (or at least I like to think I am). I got that Jesus chip implanted in my brain the same day I got my bible and thus I think economics, free-market or otherwise, should be crafted within a Christian ethos.

    It is troubling to me as a Christian and as an American that we have sold so much of our economic future to a thoroughly immoral and repressive nation such as China.

    The founding fathers would be quite perturbed, I might add.

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  2. I agree, but the more salient point is that all government contracts are paid with 'revenue' that has been: raised through taxation [taken by threat of force], borrowed [a promise to take money by threat of force in the future], or printed [thereby debasing the currency's value]. Thus government contracts constitute a human rights violation from the start. The stock market reaction was merely nihilistic opportunism.

    Eat, drink, and shaft the stock holders, for we are dead already.

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  3. @ Newworld: You're as strong a proponent of government by the people, for the people and of the people as ever. ;)

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