Column: CEOs Insist on Business as Usual in Russia
It’s all well and good that Ukraine wants to retain its independence, but business is business. The Western democracies may be divided on how best to deter Russia from taking over the Ukrainian east, but the multinational corporations of every nation seem to have come to consensus — effortlessly, automatically — on how best to deal with Russian President Vladimir Putin’s threat to Ukraine and rollback of democracy within Russia itself: Ignore it. It’s no big deal. There is money to be made in Russia. Risking Putin’s wrath would diminish the earnings of all those shareholders whose interests chief executives love to invoke to justify their more morally nauseating policies.
Nostalgic neoconservatives, who call for sending troops to the Baltic states and armaments to Kiev, deride President Obama for his ostensible pusillanimity. But try to find a neocon condemnation of the global corporations that have leaned on European governments not to impose sanctions on Russia for fear that such actions would imperil their investments. They have stakes in cash cows such as Rosneft, the Russian state-owned energy company (in which BP has a 20 percent interest). They sell luxury autos and running shoes from Moscow to Vladivostok.
The companies that have most avidly expressed their opposition to sanctions are disproportionately German — understandably, since Germany’s flourishing manufacturing sector depends on Russian oil and gas to run its factories and Russian consumers to buy its products. The CEOs of such German-based firms as BASF and Adidas are among the corporate leaders who have told Chancellor Angela Merkel that sanctions would cripple their companies and bring down the country’s economy.
But not just German firms want business to continue as usual. BP has warned Whitehall of the threat sanctions might pose to British business. Major U.S. companies have deals with the Russian government, too. Exxon Mobil has partnered with Rosneft to search for oil in the Arctic. Boeing sells its planes to state-controlled Russian airlines. Russia is Pepsi’s second-largest market; Cargill has more than 3,000 employees there; Goldman Sachs, Morgan Stanley, General Electric, Alcoa, ConocoPhillips and many more U.S. corporate icons do business in Putin’s increasingly repressive domain.
Of late, the Obama administration has been trying to dissuade U.S. companies from attending a global economic forum in St. Petersburg, which Putin himself will host. Under pressure from the White House, a number of chief executives have canceled their reservations, but according to a report this week in The New York Times, some of them are hedging their bets by sending subordinates in their stead.
The issue here isn’t the perfidy of big business: In an era of globalized commerce, big businesses will go where the money is, no questions — or as few as possible — asked. The problem that the corporate response to the Putin crisis illustrates, rather, is the inherent divergence between corporate and national interests in a globalized economy.
Such a divergence is old news to most Americans. When corporations send profits abroad to avoid taxes, when they abandon the industrial Midwest in search of cheap labor and Chinese government subsidies, it’s hard to make the case that their interests and those of the American people are aligned.
But the divergence between some of the most politically conservative corporate sectors — Big Oil, for instance — and the neocons who want the United States to take a harder line against Putin should serve as a wake-up call for American conservatives generally. In recent decades, as a kind of market fundamentalism has eclipsed other conservative tendencies, the impulse to defend the market against the state has become the default position of most conservative intellectuals, journalists and politicians. But the market can prove as indifferent to conservative values as it is to liberal ones, and as uncaring toward our nation’s interests as toward those of our adversaries.
Conservatives frequently square this circle by asserting that our nation’s interests and values should be those with which the market feels most comfortable. But the market is promiscuous in its affections. The U.S. corporate sector wants to do business with and in Putin’s Russia, no matter how deep its descent into neo-czarism. It wants to keep doing business in Leninist capitalist China and in the medieval oil kingdoms of the Middle East. And while U.S. corporations abroad often complain about the corruption of the nations in which they do business, I can’t call to mind a single instance of such corporations complaining, say, about the absence of democracy in China or the erosion of democracy in Russia.
The problem with worshiping the market is that the market itself is agnostic toward such values as democracy and liberty. Conservatives should want more from a deity than that.
Harold Meyerson is editor-at-large of The American Prospect.