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Corporations are Not Unitary Rational Actors

[ 0 ] July 3, 2008 |

Matt writes:

As you can perhaps tell from my dyspeptic response to some of our Ideas Festival sponsors’ efforts to brand themselves as “green,” (see also Boeing’s hilarious hand-crank powered flashlight) I don’t see the “corporate social responsibility” movement as having a ton of promise. I think large firms will more-or-less inevitably seek to maximize profits and the role of the state is to ensure that that profit maximizing behavior takes place in a larger framework such that its impacts are beneficial.

I’m not so sure. A few months ago I visited the Cincinnati headquarters of Proctor and Gamble as part of a departmental field trip, and one of the things that struck me was the apparent role that employee preferences played in terms of corporate environmental policy. The framework that Matt lays out above is the traditional “billiard ball” understanding of the corporation; it is a unitary, rational actor that seeks to maximize profits within the legal framework set forth by the state. It may also, of course, try to modify that legal framework to increase profit maximization opportunity. This is a framework that the discipline of international relations borrowed from economics to create Neorealism, the idea that states can be treated as unitary, rational actors seeking to maximize power (or security).

Of course, we all know that states are not, after all, unitary rational actors; they are instead fragmented actors that respond to a variety of different external and internal stimuli in a way that leaves their behavior “rational” only in a very technical sense. I think that corporations can probably be treated similarly; the CEO of Proctor and Gamble does try to maximize profits, but there are internal as well as external constraints on P&G’s behavior. If the employees strongly support a certain kind of environmental, recycling, or social program, then it becomes hard for P&G to ignore that concern in the pursuit of profit maximization. No corporation, after all, can simply fire all of its workers. As such, I think that Matt underestimates the prospect of some companies branding themselves as “green” in a meaningful ways. Such moves aren’t simply public relations, but rather can also be a response to “grassroots” demands from within the corporation, and from shifts in corporate culture.

Cross-posted to TAPPED.

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Presidential Statement of the Day

[ 6 ] July 3, 2008 |

Harry Truman, statement on the independence of the Philippines, 3 July 1946:

The independence achieved today by the Philippines comes after a period of forty-eight years of American sovereignty over the Islands. Throughout this period it has been the consistently expressed policy of this Government, as revealed in the instructions of President McKinley to the Philippine Commission, the Jones Law, and the Tydings-McDuffie Law, to prepare the people of the Philippines for independence. An ever increasing measure of self-government has been granted to the Filipino people as year after year they demonstrated their capacity for democratic self-government.

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Sonics Gone

[ 0 ] July 3, 2008 |

This is djw’s department, but the Sonics will officially be leaving Seattle. As an NBA nonfan, it’s especially easy for me to be happy that the city and state refused to sub,it to the usual extortion demands from plutocrats. But having lost a favorite team (in especially agonizing fashion) myself, it’s certainly not the time to gloat either.

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Holy Land Trivia of the Day

[ 28 ] July 3, 2008 |

Who killed whom here?

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What I’ve Been Doing…

[ 0 ] July 3, 2008 |

This is what I’ve been up to for two of the last three weeks:

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Everyone Hates Joe

[ 5 ] July 2, 2008 |

If only Senate elections were every two years:

The new Q-Poll has Obama has crushing McCain 56 to 35 in Connecticut. No real surprise there. The same poll also finds that even if McCain were to pick native son Joe Lieberman as his runningmate, only 14 percent of Connecticut voters say they’d be more likely to vote for McCain, while 32 percent say they’d be less likely to do. In other words, adding Lieberman to the ticket would cost McCain votes in Connecticut.

It would have been nice if more of the fine voters of Connecticut had figured this out a little sooner, but…

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Pregnancy Discrimination: It Just Won’t Die

Way back in 1978, Congress passed the Pregnancy Discrimination Act to undo the damage wrought by the Supreme Court in Geduldig v. Aiello, in which the Court infamously (foot)noted that:

The California insurance program does not exclude anyone from benefit eligibility because of gender but merely removes one physical condition – pregnancy – from the list of compensable disabilities. While it is true that only women can become pregnant, it does not follow that every legislative classification concerning pregnancy is a sex-based classification . . . . Normal pregnancy is an objectively identifiable physical condition with unique characteristics. Absent a showing that distinctions involving pregnancy are mere pretexts designed to effect an invidious discrimination against the members of one sex or the other, lawmakers are constitutionally free to include or exclude pregnancy from the coverage of legislation such as this on any reasonable basis, just as with respect to any other physical condition.

The lack of identity between the excluded disability and gender as such under this insurance program becomes clear upon the most cursory analysis. The program divides potential recipients into two groups – pregnant women and nonpregnant persons. While the first group is exclusively female, the second includes members of both sexes. The fiscal and actuarial benefits of the program thus accrue to members of both sexes.

That’s right, kids: under the Constitution pregnancy discrimination is not sex discrimination because there are some women who are not pregnant. Or something like that.

Anyway, Congress tried to change this in 1978. But the more things change with regard to pregnancy discrimination, the more they stay the same. The Supreme Court last week granted cert to hear a pregnancy discrimination case against AT&T. The case — AT&T v. Hulteen — presents the question of whether a corporation is free to count leave taken before the 1978 passage of the PDA against women who continued to work at the company after the PDA’s passage. A summary from Cara:

In the late 1960s/early 1970s, Noreen Hulteen, Eleanora Collet, Linda Porter and Elizabeth Snyder took maternity leave from their jobs at AT&T. Under AT&T rules during this time, pregnancy was considered personal leave, and counted against employees for promotions, vacation, and pensions. Other types of long term sick leave, taken by men or women, were not counted against the employees. This type of discrimination, against only pregnant people, is currently illegal under the Pregnancy Discrimination Act. Today, AT&T is counting the pregnancy leave against these women for purposes of their pensions.

Instead of dropping the case and giving these women the pensions they deserve after careers devoted to the company, AT&T is fighting their female employees all the way to the Supreme Court. And particularly given Ledbetter, I can’t say that I have any confidence in what SCOTUS will do.

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[ 6 ] July 2, 2008 |

Best wishes to Brian Beutler for a speedy recovery.

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Presidential Statement of the Day

[ 0 ] July 2, 2008 |

John F. Kennedy, statement on the death of Ernest Hemingway, 2 July 1961:

Few Americans have had a greater impact on the emotions and attitudes of the American people than Ernest Hemingway.

From his first emergence as one of the bright literary stars in Paris during the twenties–as a chronicler of the “Lost Generation,” which he was to immortalize–he almost single-handedly transformed the literature and the ways of thought of men and women in every country in the world. When he began to write, the American artist had to look for a home on the Left Bank of Paris. Today, the United States is one of the great centers of art. Although his journeys throughout the world–to France, to Spain and even to Africa–made him one of the great citizens of the world, he ended life as he began it–in the heartland of America to which he brought renown and from which he drew his art.

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You Are the Sucker: Roberts Court Edition

[ 15 ] July 2, 2008 |

Jeffrey Rosen continues to claim that liberals “dodged a bullet” when Roberts and Alito were appointed. I continue to find this as unpersuasive as it was a year ago. Some of what he mentions — such as the rhetoric in dissenting opinions becoming less acerbic — is completely irrelevant to the impact of the Court. The central problem with the more important arguments can be found here:

In particular, Roberts has been more willing than his predecessor to assign plurality (rather than majority) opinions. In these cases, Roberts begins with the three center-right conservatives (himself, Anthony Kennedy, and Samuel Alito) and tries to attract liberal justices to a narrowly reasoned decision, while letting the hard-line conservatives (Thomas and Antonin Scalia) write separate, more extreme concurrences.

To put Alito and Roberts on the “center right” with Kennedy rather than just on the “right” with Scalia and Thomas is, of course, just transparently erroneous. Kennedy is a legitimate moderate; on two of the three cases the term will be remembered for he cast decisive votes with the Court’s four more liberal members, and he has done this in many landmark cases. Rosen can’t cite any example of Alito and Roberts doing the same thing, for the obvious reason that there isn’t any example of this happening in a major case. Moreover, there are examples of Scalia and Thomas casting decisive votes with a more liberal majority. (Roberts and Alito did make 5-4 majorities 7-2 on a couple occasions, but so what?) Roberts and Alito are simply doctrinaire conservatives, not Kennedy-style moderates.

The key here is that Rosen mistakes some disagreements about how to characterize precedents and about what the rule will mean going forward as substantive disagreements. But most of these distinctions are without any substantive difference. (On this term’s Voter ID case, for example, the theoretical possibility of a future successful lawsuit is worth pretty much nothing, since the standards the case set for assessing the ban would make it almost impossible for the suit to succeed. Any any Court that would plausibly find a similar law unconstitutional could just overturn or distinguish a superficially less favorable precedent anyway.) The formal differences between Bush’s appointments and the Court’s two other conservatives are vastly less consequential than their overwhelming substantive agreement.

To exaggerate these differences, Rosen relies on a strawman:

Instead of siding with conservative extremists like Clarence Thomas, who are eager to press the limits of the so-called Constitution in Exile, resurrecting limits on federal power whenever possible, Roberts prefers narrow opinions that can attract support from the center. Liberals ought to applaud this instinct because, even if Barack Obama gets to appoint the next justice or two, it’s the only thing standing between them and a Court eager to roll back progressive reforms.

Fears of a “Constitution in Exile” reappearing are vastly, vastly overblown. Rosen is greatly underestimating the political constraints on the Court; an attempt to seriously challenge the New Deal regulatory state is highly unlikely, and if they tried it wouldn’t endure because it would work out about as well for the Republican Party as it did in 1935. The Court certainly could challenge a unified Democratic government on some marginal issues — but nothing in their records suggests that Alito and Roberts wouldn’t vote with Thomas and Scalia in such cases. More importantly, there’s no necessary connection between a justice’s “minimalism” and how far they’re willing to take the “new federalism”: Rehnquist and the arch-minimalist Sandra Day O’Connor showed considerably more enthusiasm for the project than the maximalist Scalia. We should remember as well Alito’s words from Rybar: “Was United States v. Lopez, a constitutional freak? Or did it signify that the Commerce Clause still imposes some meaningful limits on congressional power?” How Rosen can conclude that Alito is less likely to find limits on federal power than a justice who concurred in Raich is beyond me.

Liberals dodged nothing: Alito and Roberts were home runs for judicial conservatives, and nothing in the first terms of the Roberts Court suggests otherwise.

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Dumbest. Scandal. Ever.

[ 3 ] July 2, 2008 |

Pathetic. (See also.) Wealthy people with excellent financial prospects and little debt get favorable treatement from banks? Fetch me the smelling salts!

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Nothing New

[ 0 ] July 2, 2008 |

To add to a point made by a couple of commenters, there’s nothing remotely new about Democrats giving money to religious groups for secular purposes.

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