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Capitulating Capitalists: Top 10 Worst Moments for Free Enterprise in 2005

We often think of large corporations as the embodiment of our system of free enterprise — often they are, but increasingly they fall way short of the mark.

This annual list spotlights companies who have most egregiously abandoned their fiduciary and moral responsibilities to their shareholders and our free enterprise system, respectively, in favor of embracing the false and harmful social activist-promoted notion of “corporate social responsibility.”

Here are the Top 10 “low-lights” for 2005.

1. JPMorgan Chase & Co., Wells Fargo and the Goldman Sachs Group

All three financial service giants capitulated to pressure from anti-development environmental extremists and their left-wing institutional shareholder allies by allowing these external activists to dictate the companies’ lending and financing policies for energy and land-use projects in the developing world — effectively blocking economic and social progress that would have benefited poverty stricken populations. JPM Morgan Chase and Goldman Sachs went above-and-beyond the call of capitulation by announcing they also would lobby the Bush administration to adopt economically-suicidal, Kyoto Protocol-like global warming regulations.

2. Fidelity Investments

Three months after the Department of Labor warned organized labor not to use pension funds as a political weapon to prevent financial service companies from participating in the public debate over social security reform, Fidelity Investments continued to distance itself from the debate which could have benefited its shareholders and society at large. In its response to an inquiry by a labor activist as to whether Fidelity supported the pro-social security reform Cato Institute, Fidelity was all too eager to say that, not only did it stop supporting the Cato Institute, but it had contributed to groups that oppose social security reform like the Progressive Policy Institute and Brookings Institution.

3. New York Stock Exchange

In a surprise move, unprecedented in its 213-year history, the New York Stock Exchange canceled the listing of a company on the day the stock was to start trading on the Big Board. The listing of Life Sciences Research was not canceled because of any illegal, irregular or improper conduct by the company, but simply because animal rights extremists, who oppose all medical research with animals, had pressured the NYSE to not permit trading of the stock.

4. General Electric Co.

In jointly announcing its “Ecomagination” marketing program with the assistance of the environmental activist World Resources Institute, GE embraced the radical Green global warming agenda, even lobbying the Senate for Kyoto-like legislation. GE apparently hopes to boost its nuclear power business by promoting global warming alarmism — GE apparently didn’t realize that its new eco-buddies are vehemently anti-nuclear.

5. Duke Energy Corp.

Another company to fall for global warming alarmism, this supplier of natural gas and electricity announced its support for a so-called “carbon tax” — essentially a national sales tax designed to dissuade consumers from purchasing goods whose production, manufacture and distribution is made possible by, well, electricity and natural gas.

6. Wal-Mart

Hoping to burnish its image and to appease labor unions and environmental activists, Wal-Mart called on Congress to increase the minimum wage and announced plans to invest $500 million in technologies to reduce greenhouse gases. As the Wall Street journal editorialized (October 26), “It’s a shame that a company that offers a wonderfully wide selection of quality goods at low prices, and provides 1.3 million people in the U.S. with jobs, could have image problems. But Wal-Mart isn’t going to solve them by trying to win over the liberal special interests … that’s a fool’s errand.”

7. Business Roundtable

As members of Congress grilled oil company CEOs about their companies’ profits, passed a punitive windfall profits tax, and demanded that a pharmaceutical company surrender its patent rights for the anti-flu drug Tamiflu, not a peep in defense of profits or property rights was heard from the Business Roundtable, a trade group for CEOs. In an ironic exaltation of form-over-substance a week earlier, however, the BRT updated its Principles of Corporate Governance, supposedly to “build shareholder confidence and public trust in American business.”

8. Citigroup

The bank announced in 2005 that it was partnering with a number of environmental activist groups to help it “understand environmental issues and their impact, and the concerns and priorities of our shareholders and broader community.” The move is more likely an effort to appease the activist groups who for years had launched scathing personal attacks on Citigroup and its CEO, Sanford Weill — including, for example, a full-page ad in the International Herald Tribune featuring Weill’s photo while he was visiting his grandchildren in Europe. The ad’s headline blared: “Put a Face on Global Warming and Forest Destruction.”

9. Business for Social Responsibility

As many of the world’s largest corporations met at the annual Business for Social Responsibility meeting in November in Washington, D.C., BSR staff sold a slew of anti-business books, including: “Fast Food Nation” and “Don’t Eat This Book: Fast Food and the Supersizing of America” (McDonald’s, Coca-Cola, Yum! Brands are BSR members); “The Post-Corporate World: Life After Capitalism”; Robert F. Kennedy, Jr.’s “Crimes Against Nature : How George W. Bush and His Corporate Pals Are Plundering the Country and Hijacking Our Democracy”; and “Selling Sickness: How the World’s Biggest Pharmaceutical Companies Are Turning Us All into Patients” (AstraZeneca plc, Pfizer Inc., GlaxoSmithKline plc and Johnson & Johnson are BSR members).

10. Microsoft

The software giant announced on December 7 that it would stop using PVC plastic as packaging due to alleged human health concerns. Although regulatory agencies that have ample scientific expertise have repeatedly concluded that PVC is safe, Microsoft, which has no known expertise on PVC, opted to succumb to pressure from a Greenpeace-inspired activist group that has long relied on junk science in campaigning to scare the public about PVC.

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Written By

Mr. Milloy is the founder and publisher of JunkScience.com. His columns and op-ed pieces have appeared in the Wall Street Journal, USA Today, Financial Times, and Los Angeles Times. He is the author of "Green Hell," a new book from Regnery Publishing.

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