It’s time for a free-market corporate social responsibility. Conservatives who rail against government hand-outs should also blast companies who seek shelter from Washington.
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The Republican attack on President Obama’s economic policy has changed subtly, but significantly, in the last three years. In 2009, he was allegedly a “socialist” and a “Marxist” who lusted for government control of the entire economy. But lately, that has given way to more nuanced charges of “crony capitalism” — of giving special, friendly treatment to certain companies and industries, or allowing powerful corporations to essentially write the laws, themselves.
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Voters despise government officials who get in bed with corporations. But what about corporations who cozy up to government? Are companies who use cronyism to grow their profit acting unethically?
The question makes some free-marketeers uneasy. After all, we not only tolerate the fierce pursuit of profit, but also we defend it against taxes and heavy-handed regulation. Milton Friedman famously said, “The social responsibility of business is to increase its profits.”
But in the age of crony capitalism, libertarians must declare that some means of pursuing profit are immoral and call on executives to reject them. This would create a positive case for capitalism — arguing that the pursuit of profit, in the context of fair and open competition, helps the whole society. The new corporate social responsibility, redefined for libertarians, must stand athwart crony corporatism yelling “stop.”
So not only do biofuel mandates raise the cost of food for the poor, they are also a taxpayer ripoff. Who knew?
Corporate subsidies, in an era of fiscal-cliff attacks on Social Security and Medicare, have dodged attention despite their magnitude and absurdity.
Take the renewable-fuels subsidy ecosystem—and a train of tankers filled with biodiesel that shuttled back and forth across the US-Canadian border twelve times, without unloading its cargo. It generated millions of dollars in profits.
The mystery train was an outgrowth of the EPA’s Renewable Fuel Standard mandate that requires oil companies to blend (subsidized) biofuels with (subsidized) fossil fuels—or alternatively, purchase Renewable Identification Numbers, or RINs, as offsets.
The mystery of the trainload of biodiesel that crossed back and forth across the Sarnia-Port Huron border without ever unloading its cargo, as reported by CBC News, has been solved.
CBC News received several tips after a recent story about a company shipping the same load of biodiesel back and forth by CN Rail at a cost of $2.6 million in the summer of 2010. It turns out the shipments were part of a deal by a Toronto-based company, which made several million dollars importing and exporting the fuel to exploit a loophole in a U.S. green energy program.
Do you have tips on this story?
The entire U.S. biodiesel market has been the centre of controversy and even legislative hearings this summer over problems with the regulatory program administered by the U.S. Environmental Protection Agency (EPA). The fallout and distrust of a market-based biodiesel credit system has had several repercussions for the industry, particularly for fledgling biodiesel companies trying to produce environmentally friendly fuel. The recent CBC reports on that train to nowhere have prompted an investigation by the Canada Border Services Agency (CBSA), as well as a further investigation by the EPA.
