Saturday, December 20, 2008

Corporations Versus Individuals and AbitibiBowater

So I was reading the comments on the Globe's story about the mill. (Reading the comments on Globe articles is a bad idea, brain-dead isn't the word.)

For those of you resident outside Newfoundland, here's the summary: following the closure of a paper mill in rural Newfoundland that has been operated by AbitibiBowater for over a century, the government has passed a bill to expropriate all the assets of the company related to the mill and was promptly sued. Whether the case has merit is arguable - the agreement was signed with the country of Newfoundland and may well only grant the rights to the firm as long as they employ in the area. Since the document is apparently hardcopy only and hence several thousand kilometres away from my current location, I'll leave it there.

Anyway, the comments are full of vitriol directed at evil corporations. I've never understood the hatred so many people have for a firm once it passes a certain number of employees or begins to operate in multiple countries. I mean, if a firm and its workers are facing the correct incentives - i.e. no free dumping of toxic waste in the river - isn't the existence of a firm a good thing?

These sort of workers-versus-firm arguments in this world are only an argument about rent sharing. If the firm is making negative profits (in some structural sense), it closes down. If it's making positive profits, the owners of capital and the suppliers of labour have to decide how to split it somehow. Why the animosity?

Okay, sure, I understand people getting mad over supposedly unfair splits of the rent. But how come people are happy a company is packing up and leaving? There are a ridiculous number of people expressing their joy that AbitibiBowater is getting hurt.

1 comment:

Former Paper Guy said...

You have a very mature insight into the emotion and lack of sophistication with regards to the public response to ABH's shutting of the local mill. It appears you are a student. My very strong advice to you is when you complete your studies, pursue a job OUTSIDE of the province. Go to the biggest city you can stomach and learn how the world works. Fortunately or unfortunately, the power is in Cities on either coast. Then after a bit of time, if you want to come home you can bring some perspective. Great post.