Why Doesn't GM Sell Crack?

People in the business world like to say, "Profit is supreme." They like chanting that.

"Profit is king." That's another one they like to repeat. They don't like to say, "I'll pick up the check." That means less profit. Profit is what it's all about. When they say "the bottom line," they mean their profit. They like that bottom line to contain a number followed by a lot of zeroes.

If I had a nickel for every time I heard some guy in a suit tell me that "a company must do whatever is necessary to create the biggest profit possible," I would have a very big bottom line right now. Here's another popular mantra: "The responsibility of the CEO is to make his shareholders as much money as he can."

Are you enjoying this lesson in capitalism? I get it every time I fly on a plane. The bottom-line feeders have all seen Roger & Me, yet they often mistake the fuselage of a DC-9 for the Oxford Debating Society. So I have to sit through lectures ad nauseam about the beauties of our free market system. Today the guy in the seat next to me is the owner of an American company that makes office supplies in Taiwan. I ask the executive, "How much is 'enough'?"

"Enough what?" he replies.

"How much is 'enough' profit?"

He laughs and says, "There's no such thing as 'enough'!"

"So, General Motors made nearly $7 billion in profit last year, but they could make $7.1 billion by closing a factory in Parma, Ohio, and moving it to Mexico‹that would be okay?"

"Not only okay," he responds, "it is their duty to close that plant and make the extra $.1 billion."

"Even if it destroys Parma, Ohio? Why can't $7 billion be enough and spare the community? Why ruin thousands of families for the sake of $.1 billion? Do you think this is moral?"

"Moral?" he asks, as if this is the first time he's heard that word since First Communion class. "This is not an issue of morality. It is purely a matter of economics. A company must be able to do whatever it wants to make a profit." Then he leans over as if to make a revelation I've never heard before.

"Profit, you know, is supreme."

So here's what I don't understand: if profit is supreme, why doesn't a company like General Motors sell crack? Crack is a very profitable commodity. For every pound of cocaine that is transformed into crack, a dealer stands to make a profit of $45,000. The dealer profit on a two-thousand-pound car is less than $2,000. Crack is also safer to use than automobiles. Each year, 40,000 people die in car accidents. Crack, on the other hand, according to the government's own statistics, kills only a few hundred people a year. And it doesn't pollute.

So why doesn't GM sell crack? If profit is supreme, why not sell crack?

GM doesn't sell crack because it is illegal. Why is it illegal? Because we, as a society, have determined that crack destroys people's lives. It ruins entire communities. It tears apart the very backbone of our country. That's why we wouldn't let a company like GM sell it, no matter what kind of profit they could make.

If we wouldn't let GM sell crack because it destroys our communities, then why do we let them close factories? That, too, destroys our communities.

As my frequent-flier friend would say, "We can't prevent them from closing factories because they have a right to do whatever they want to in order to make a profit."

No, they don't. They don't have a "right" to do a lot of things: sell child pornography, manufacture chemical weapons, or create hazardous products that could conceivably make them a profit. We can enact laws to prevent companies from doing anything to hurt us.

And downsizing is one of those things that is hurting us. I'm not talking about legitimate layoffs, when a company is losing money and simply doesn't have the cash reserves to pay its workers. I'm talking about companies like GM, AT&T, and GE, which fire people at a time when the company is making record profits in the billions of dollars. Executives who do this are not scorned, picketed, or arrested, they are hailed as heroes! They make the covers of Fortune and Forbes. They lecture at the Harvard Business School about their success. They throw big campaign fund-raisers and sit next to the President of the United States. They are the Masters of the Universe simply because they make huge profits regardless of the consequences to our society.

Are we insane or what? Why do we allow this to happen? It is wrong to make money off people's labor and then fire them after you've made it. It is immoral for a CEO to make millions of dollars when he has just destroyed the livelihood of 40,000 families. And it's just plain nuts to allow American companies to move factories overseas at the expense of our own people.

When a company fires thousands of people, what happens to the community? Crime goes up, suicide goes up, drug abuse, alcoholism, spousal abuse, divorce, everything bad spirals dangerously upward. The same thing happens with crack. Only crack is illegal, and downsizing is not. If there was a crack house in your neighborhood, what would you do? You would try to get rid of it!

I think it's time we applied the same attitudes we have about crack to corporate downsizing. It's simple: if it hurts our citizens, it should be illegal. We live in a democracy. We enact laws based on what we believe is right and wrong. Murder? Wrong, so we pass a law making it illegal. Burglary? Wrong, and we attempt to prosecute those who commit it. Two really big hairy guys from Gingrich's office pummel me after they read this book? Five to ten in Sing Sing.

As a society, we have a right to protect ourselves from harm. As a democracy, we have a responsibility to legislate measures to protect us from harm.

Here's what I think we should do to protect ourselves:

1. Prohibit corporations from closing a profitable factory or business and moving it overseas. If they close a business and move it within the U.S., they must pay reparations to the community they are leaving behind. We've passed divorce laws that say that if a woman works hard to put her husband through school, and he later decides to leave her after he has become successful, he has a responsibility to compensate her for her sacrifices that allowed him to go on to acquire his wealth. The "marriage" between a company and a community should be no different. If a corporation packs up and leaves, it should have some serious alimony to pay.

2. Prohibit companies from pitting one state or city against another. We are all Americans. It is no victory for our society when one town wins at another's expense. Texas should not be able to raid Massachusetts for jobs. It is debilitating and, frankly, legal extortion.

3. Institute a 100 percent tax on any profits gained by shareholders when the company's stock goes up due to an announcement of firings. No one should be allowed to profit from such bad news.

4. Prohibit executives' salaries from being more than thirty times greater than an average employee's pay. When workers have to take a wage cut because of hard times, so, too, should the CEO. If a CEO fires a large number of employees, it should be illegal for him to collect a bonus that year.

5. Require boards of directors of publicly owned corporations to have representation from both workers and consumers. A company will run better if it has to listen to the people who have to build and/or use the products the company makes.

For those of you free-marketers who disagree with these modest suggestions and may end up on a plane sitting next to me, screaming, "You can't tell a business how it can operate!" I have this to say: Oh, yes, we can! We legally require companies to build safe products, to ensure safe workplaces, to pay employees a minimum wage, to contribute to their Social Security, and to follow a host of other rules that we, as a society, have deemed necessary for our well-being. And we can legally require each of the steps I've outlined above.

GM can't sell crack. Soon, I predict, they and other companies will not be able to sell us out. Just keep firing more workers, my friends, and see what happens.


1996 Michael Moore. All rights reserved.