Outsourcing

The Public Policy Dimension

In democracies, just corporate-governmental relations are reciprocal. Corporations exist because of the will of the people expressed via their elected representatives. Corporations enjoy a variety of privileges grounded in the political, economic, regulatory, and military power of the nation in which they are based. In the United States, for example, corporations enjoy benefits such as transportation infrastructure, police and judicial systems that protect corporate property rights, coercive military and economic influence, and representation in international trade negotiations. In return, public policy makers in the U.S. tax corporations require that they meet specific regulatory requirements. Ethical corporations meet these regulatory demands and refrain from coercing lawmakers into modifying such regulations.

Lawmakers who believe that MNCs have an ethical obligation to retain a specific percentage of domestic employees, to provide employees with severance packages when terminated, to provide employees with advance notice of termination, or to provide any other specific benefit to employees have the power to enact such legislation. When MNCs, or their representatives, exert coercive influence over lawmakers to prevent the enactment or enforcement of such laws, they undermine a core principle of modern democracy. This is the egalitarian principle that each citizen is entitled to one and only one vote. This principle makes it morally unacceptable for corporations to exert ideological and political power via the deployment of economic resources in ways that undermine the ability of individuals to make freely determined judgments about how best to govern themselves. However, MNCs can play a constructive and ethically permissible role regarding the creation of corporate law and labor law by providing lawmakers with information regarding the likely implications of that legislation for their business.

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