Corporations aren’t going to save America

Starbucks is sort of America’s bathroom. In cities like New York, where public restrooms are hard to come by, it’s the de facto spot to stop and pee. Mike Bloomberg, who tried to set up a network of public toilets when he was mayor, once reportedly shrugged that perhaps “there’s enough Starbucks” to address the city’s bathroom needs anyway.

But Starbucks is an imperfect public toilet because providing a public toilet is not the point of Starbucks. It has tried in the past to limit its facilities to employees, or, at the very least, to require people using those facilities to buy something first. That proved to be a problematic system after employees at a Philadelphia Starbucks in 2018 called the police on two Black men who asked to use the bathroom while waiting for a business associate. And so, the coffee giant has begrudgingly accepted its fate as many passersby’s emergency loo.

The solution is far from ideal. But in many places in the US, there aren’t many immediate alternatives. The government has failed to meet a very basic biological need, and so a private company fills part of the gap.

Across various segments of American life, the private sector has begun to take on tasks big and small that one might think should be tackled by the public sector. Domino’s filled in potholes. Dawn’s dish soap saved ducks. American Express pitched in on historic preservation. Walmart started selling low-priced insulin. A slew of companies help workers pay for school. Much of America’s health care system is still handled through private insurers and your job. As people lose faith in government to act on sweeping issues such as climate change and guns, they’re increasingly looking to corporate America and asking whether there’s something they can do about it. If Congress won’t tackle gun violence, maybe Dick’s Sporting Goods can try.

Callaghan O’Hare/Bloomberg via Getty Images

It’s not a bad thing for brands and companies to try to make the world better. Starting a business often involves identifying a problem to solve, and it’s much better for companies to help than to do harm. Corporate social responsibility is fine. There are, however, limits.

“Of course we want businesses to be responsible,” said Suzanne Kahn, managing director of research and policy at the Roosevelt Institute. But she emphasized that this does not constitute a plan for how to organize society. “Private companies don’t, can’t, or won’t plan with the same values that we demand and expect the government to.”

Companies have a profit motive and are ultimately accountable to shareholders. Doing what’s lucrative often doesn’t align with what’s best for most people, and when they do nice things, it’s often because they know it will play well with consumers and workers. Domino’s helped fill some potholes because it was good advertising for pizza pickup customers, not because it’s overly concerned about the future of America’s bridges and roads. The issue is, the entity that should be driving the bus on America’s bridges is kind of asleep at the wheel.

The private sector is increasingly encroaching on the government’s space because the government is leaving so much space to begin with. Corporations are swooping in with solutions because the solutions coming from public officials and entities aren’t working or are nonexistent.

“I don’t think it’s bad for a company to say we’re going to do the Paris climate accord,” Kahn said. “It’s bad when we as a country say we’re going to let companies do what should be a public responsibility.”

Corporate America wants to be here for you … to a point

At the start of the pandemic, the airwaves were filled with commercials from brands promising solidarity and support. Corporate America was eager to reassure us “we’re all in this together” and highlight the myriad ways they were supporting their customers and workers. Insurers paused policy cancellations. Telecom companies gave away extra data. Retailers started calling their workers “heroes” and, in some cases, giving them hazard pay.

But many companies were here for us on Covid-19 until about the summer of 2020, after which many of those pandemic-related perks and benefits expired. Stores halted hazard pay for workers even though the hazard was far from over. Creditors wound down debt deferrals. We were all in this together for a limited time only. Ultimately, it was big government programs, such as stimulus checks, unemployment insurance, and eviction moratoriums, that would make the biggest difference in people’s pandemic lives.

It’s illustrative of the greater landscape: The private sector can and should play a role in addressing society’s issues, but it will only do so to a point. Kroger just isn’t going to pay its workers an extra couple of dollars an hour forever if it doesn’t have to. The airlines started laying off workers the minute government funding dried up. Operation Warp Speed for the vaccines wasn’t going to be undertaken by pharmaceutical companies on their own.

Companies are under increasing pressure from their workers and consumers to do the right thing. According to a report from Kantar Monitor, more than two-thirds of consumers expect brands to be clear about their values, and nearly half of millennials and Gen Z expect brands to be brave and speak out. Research suggests that when companies do a good deed, their products are perceived as safer and consumers are drawn in. Employees also have high expectations of their workplaces — being on the “right side” of issues such as climate and race can be a useful recruiting tool. But what matters more than companies talking a big game on helping their communities is whether they’re backing that up, or what else they’re doing in the background.

Saul Loeb/AFP via Getty Images

Companies have money and power, and major multinational corporations are often the only entities besides government with the clout to influence societal forces, said Jerry Davis, a professor of management at the University of Michigan’s Ross School of Business. “It’s very clear that some of the problems that we want to have solved are going to take scale, and that’s the kind of scale that only a government or a really big business can pull off. And if we don’t trust the government to do it, that just leaves Walmart and Amazon,” Davis said.

Alice Korngold, a corporate governance consultant, echoed the idea that companies are often the ones with the weight to tackle major global issues — though sometimes, once you dig deeper, the situation becomes much more muddled. “I’d never say, ‘This company is doing a particular thing, then this company is great!’ And it’s really industries that are often culpable for creating situations that need to be addressed,” she said. She explains that, far from alleviating collective problems, some industries are complicit in creating them, pointing to the fossil fuel industry, a notorious driver of pollution and waste.

If Walmart were to decide to stop selling factory-farmed meat or were to commit to selling only LED lighting, it could have a real impact on the environment. But companies can’t always, or even often, be trusted to wield all of their powers for good.

“We need big to do some good things, and yet big can be really bad,” Davis said. “Big in the hands of Mark Zuckerberg is a nightmare.”

If the government’s in the back seat, who do you expect to drive?

The cynical view of companies acting as a benevolent force in the world is that they’ll only do so to the extent that it somehow benefits their bottom line or is good marketing. That cynical view is sometimes borne out in reality.

Take the example of the internet. The government has given private companies billions of dollars to try to expand broadband internet access across the United States and often relied on going through telecom companies to expand urban and rural broadband alike. But some companies have taken the public cash without fulfilling their end of the bargain, or used public financial support to further their private financial interests. Still, millions of Americans don’t have fast, reliable internet because it’s just not lucrative for telecommunications companies to get it to them. Americans who live in remote or low-income areas won’t generate a return on investment.

And yet, we keep looking to private companies to help fix America’s broadband problem because the government isn’t there to do it. The government doesn’t think about the internet the way it does, say, electricity — as in something everyone should have. It’s hardly the only example of the public sector ceding territory or leaving to the private sector tasks reasonable minds might think it should take on.

The 1980s and ’90s saw a shift in political rhetoric to shrinking the reach of the government. Ronald Reagan told us, “Government is not the solution to our problem, government is the problem.” George H.W. Bush declared, “Read my lips, no new taxes.” Bill Clinton announced, “The era of big government is over.” The neoliberal idea took hold that the government should set the rules of the road and take on some challenges, but the private sector and marketplace are equipped to do much of the driving. Lower the taxes paid by the rich and by corporations, the thinking goes, and hopefully their money will trickle down and they’ll put it to good use.

“The premise of a kind of market-leaning libertarian is that the pursuit of private self-interest in the marketplace, aggregated across many actors, will turn out to be socially beneficial,” said Rob Reich, a professor of political science and philosophy at Stanford.

That’s not, in practice, how the market often works. The US has left health care up to private insurers in the Affordable Care Act, ultimately leaving a public option by the wayside. The result: a health care system that is still exorbitantly expensive. There are countless stories of GoFundMe drives that are supposed to be heartwarming, where people raise billions of dollars through a private internet platform to cover expenses for health costs or other financial setbacks in their personal lives. As to how heartwarming these stories actually are, well, your mileage may vary — it’s not ideal that a crowdfunding platform has taken the place of a more robust public system to cover health costs.

“Privatization, I think, is a very bad solution to certain problems. But I do think we have to recognize that sometimes privatization arises because other systems don’t work,” said Chiara Cordelli, a political philosopher at the University of Chicago and author of The Privatized State, which makes the case that privatization and government outsourcing weaken the legitimacy of the state.

Saul Loeb/AFP via Getty Images

Americans are also losing faith in the ability of government to act. According to Gallup, just 18 percent of Americans say they have a great deal or quite a lot of confidence in big business. Their faith in Congress, however, is somehow even lower, at just 13 percent.

It’s understandable, given so much of the gridlock in Washington, DC. In the current balance of power, Democrats hold the White House, the House of Representatives, and the Senate — and they’re still struggling to get major legislation passed. Republicans won’t go along with much of what Democrats want to accomplish, and Democrats are unwilling to make the changes (as in, abolishing the filibuster) necessary to push their agenda through. Capitol Hill has failed over and over to make real reforms on issues such as guns and immigration and climate. Many companies — which are subject to the pressures of their consumers and their employees — have at least tried. But, again, that trying has limits.

“We have these big, public, global and national problems that we need to address, and that’s not the length of time at which they think, it’s not the scale at which they think,” Kahn said. “And if they’re choosing to put some of these values front and center, we certainly cannot count on them to be thinking about how equitably their moves are affecting different communities.”

There’s a space for the private sector to fill public needs. But maybe not like this.

With threats as big and imminent as the Covid-19 outbreak or climate change, it’s important to have an all-hands-on-deck approach that draws in various players: the government, private companies, nonprofits, and philanthropy. And there are plenty of smart people who argue that while private entities are not the answer to the world’s problems, they need to play a role.

“You can look at almost every major issue of today ... and it requires, to solve it, going across all these sectors and aligning interests, whether it’s homelessness, whether it’s climate action, whether it’s racial equity, what have you. None of this is going to be solved by government alone or by the private sector,” said William Eggers, the executive director of Deloitte’s Center for Government Insights.

“The role of government absolutely should be to protect our public interest,” Korngold said. “The problem is that so many problems are global, and the governments are national.”

Pius Utomi EkpeiI/AFP via Getty Images

Still, finding a balance is tricky. Take the example of billionaire philanthropy, which is often an outgrowth of extraordinary success in the corporate world. It’s nice that rich guys are trying to have a positive influence on the world. It’s also hard not to wonder whether said rich guys shouldn’t just be taxed more, or why the US and the world are in a spot where private entities, whether it be Bill Gates’s charity or his company, are filling in such obvious public spaces.

The government is by no means a perfect actor. But it is leaving problems to the private sector to address what it feels like should be directly in its purview, whether it be providing citizens basic health care or filling in a pothole in the street.

Even decent outcomes, like Starbucks as a forced public bathroom, can feel pretty uneasy. The pandemic gave it a good reason to shut those restrooms down, meaning suddenly a solution many people had adopted was no longer available. And even in normal times, it’s a little awkward to sneak by the barista without buying a coffee or muffin or water first. That’s because it is, and a private coffee company shouldn’t be standing in as a public restroom in the first place.

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