In 1953, carmaker Charlie Wilson famously spoke for a generation of chief executives about the link between business and the larger society when he told a Senate committee that “what is good for the country is good for General Motors, and vice versa.”
It is hard to imagine a modern executive saying the same thing now that the corporate world has been hypnotised by the cult of maximising shareholder value. Steven Pearlstein argues in The Washington Post that this concept is destroying the American economy and society:
For too many corporations, “maximizing shareholder value” has also provided justification for bamboozling customers, squeezing suppliers and employees, avoiding taxes and leaving communities in the lurch. For any one profit-maximizing company, such behavior may be perfectly rational. But when competition forces all companies to behave in this fashion, it’s hardly clear that society is better off.
Take the simple example of outsourcing production overseas. Certainly it makes sense for any one company to aggressively pursue such a strategy. But when every company does it, so many American workers wind up losing their jobs or having their pay cut that they can no longer buy even the cheaper goods produced overseas. The companies may also find that government no longer has sufficient tax revenue to educate workers or invest in the roads and ports and airports through which their goods are delivered to market.
This theme is echoed in Phillip Meyer's novel American Rust, published back in 2009:
It had been an intricate system and when the mills shut down, the entire Valley had collapsed. Steel has been the heart. He wondered how long it would be before it all rusted away to nothing and the Valley returned returned to a primitive state. Only the stone would last.
For a hundred years the Valley had been the centre of steel production in the country, in the entire world, technically, but in the time since Poe and Isaac were born, the area had lost 150,000 jobs - most of the towns could no longer afford basic services; many no longer had any police. As Isaac had overheard his sister tell someone form college: half the people went on welfare and the other half went back to hunting and gathering. Which was an exaggeration, but not by much.
It is also echoed in The Unwinding, George Packer's news book in which he uses real-life examples to document the impact of the collapse of American institutions since the 1960s:
If the institutions and the people who led them had understood what was about to happen to Youngstown, and then to a wider region, they might have worked out a policy to manage deindustrialization instead of simply allowing it to happen. Over the next five years, every major steel plant in Youngstown shut down: Sheet and Tube’s Brier Hill Works in 1980, its McDonald Mills in 1981, Republic Steel in 1982. And not just the mills. Higbee’s and Strouss’s, two of the shopping mainstays downtown, soon closed. Idora, the amusement park on the south side that dated back to 1899, went into a swift decline, before the Wildcat roller coaster caught fire in 1984, which closed Idora down; its spectacular carousel was auctioned off and ended up on the Brooklyn waterfront. Between 1979 and 1980, bankruptcies in Youngstown doubled, and in 1982, unemployment in the Mahoning Valley reached almost 22 per cent - the highest anywhere in the country.