Saturday, March 25, 2017

Perspective on the European Union

At the signing of the Rome Declaration at the 60th anniversary of the Treaty of Rome, which established the European Community on March 25, 1957, E.U. leaders expressed their intention to further strengthening the federal Union. Even as “regional conflicts, terrorism, growing migratory pressures, protectionism and social and economic inequalities,” as well as Britain’s upcoming secession provided a sense of pessimism, Jean-Claude Juncker, president of the European Commission, the E.U.’s executive branch, said, “Let us not lose perspective.”[1] I submit that this advice was at the time very important.

E.U. leaders in Rome to sign the Rome Declaration (source: NYT)

The E.U. president/chief executive pointed out that as daunting as the “Euro-skeptic” mood was at the time, the challenges were “in no way comparable to those faced by our founding fathers,” as the E.U. had been able to “achieve almost eternal peace.”[2] Indeed, the European Coal and Steel Cooperative had been formed in the wake of World War II precisely to forestall another such war by keeping an eye on German extractions of iron-ore for possible re-armament. The prevention of war within the E.U.’s borders has been a significant mark of success, and problems with immigration in 2016 paled in comparison—and yet what is closer to the eye can look disproportionately large, and thus important.

Even the secession of the state of Britain can be reckoned as an instance of political stability, and thus of peaceable political change in the E.U. Had the latter refused to allow the state to secede, as the U.S. refused to allow South Carolina and other states to secede in 1861, armed conflict could have resulted after the British vote to secede from the Union. Flexibility in terms of federalism is a strength rather than a weakness, even though the want of sufficient authority at the federal level has plagued the very functioning of the E.U., much as the same problem eviscerated the U.S.’s original treaty, the Articles of Confederation. Perspective is thus vital.

[1] James Kanter and Elisabetta Povoledo, “E.U. Leaders Sign Rome Declaration and Proclaim a ‘Common Future’ (Minus Britain),” The New York Times March 25, 2017.
[2] Ibid.

Monday, March 20, 2017

Happiness: A Matter of Prosperity or Economic Security?

A macro-economist would probably assume that the percentage of people rating their lives positively enough to be considered thriving is positively correlated with real GDP per capita. Yet evidence suggests that this is not the case. The key to happiness, I submit, is having the sense of foundational economic security—that come what may, even in the case of rich people, you won’t fall through the cracks. It is difficult to thrive over a continuous, subterranean (i.e., subtle) anxiety, whereas a sense of security, such as most children feel while still living in their childhood homes, is a sturdy foundation on which a sense of thriving can grow and survive. I think most people, particularly Americans, take this point for granted, and thus are all too willing to make staples like housing, food, and health care conditional on having money.

In Britain during the two years leading up to the referendum to secede from the E.U., Gallup found that the percentage of people who were happy in the sense of having the sense of thriving fell 15 percent.[1] Meanwhile, GDP per capita (PPP) in current international dollars increased from $38,873 to $41,499.[2] Egypt, likewise, went from 29 percent “happiness” in 2005 to 8 percent in 2012, while GDP per capita increased from $8,123 to $11,210. Clearly, something other than the level of prosperity is behind changes in happiness as a sense of thriving.

That Norway (7.537), Denmark (7.522) and Iceland (7.504) led the pack among countries in terms of happiness as thriving in 2017, with the Netherlands coming in sixth and Sweden tenth may suggest that having an economic safety-net may be important. The United States stood at only 6.993, and the safety nets in those states are partial. To be sure, the state of France in the E.U. came in even lower, at 6.442, and Italy at 5.964, so we cannot conclude that the stronger safety nets in the E.U. necessarily translate into more happiness. However, even within the E.U. Denmark and the Netherlands were known for their well-fortified socio-economic infrastructures, whereas in the U.S. only Massachusetts and California were known to have relatively encompassing social policies in comparison with the other American states. Unfortunately, Gallup lumped all of the American states together while distinguishing the European states, so we cannot tease out differences within the U.S. 

Even so, the high marks of Denmark, Norway, and the Netherlands suggest that having a solid social-welfare safety net for the most vulnerable in matters of food, housing, and medical care is at the very least consistent with a broad sense of happiness in the sense of not merely surviving, but thriving in life. With less of the existential, conditional angst, people rich or poor can feel more stability upon which they can step out onto striving, venturing, into the unknown, with paradoxically a higher chance of sustainable self-sufficiency.

1. Jon Clifton, “The Happiest and Unhappiest Countries in the World,” The World Post, March 20, 2017.
2. Source: The IMF

Saturday, March 18, 2017

European Officials at the G20 Grapple with a New American Trading Position: Beyond the Joint Communiqué

It is perhaps only natural---only human—for us to take ourselves and our produced artifacts too seriously. Diplomats and other government officials, for example, fret arduously over mere words. When those words are etched in governmental or treaty parchment, the effort is understandable. The flaw of excess is evident in all the time and effort that go into the joint communiques of international conferences and meetings. I submit that the real politic at such occasions is much more significant even if nothing shows from it for some time.
At the March 18, 2017 meeting of the Group of 20, which includes the E.U. and U.S., the joint statement “became an unlikely focus of controversy” issuing in “a tortured compromise stating, in effect, that trade is a good thing.”[1] I submit that the use of such language is spurious—certainly much less than the attendees and even their principals back home supposed. The real politic was instead that the U.S. was “overturning long-held assumptions about international commerce,” and such transformational change takes time even just to register in minds ensconced in the status quo. That is to say, the real shift in power would need to play out in actual negotiations on trade, rather than in how to word a meeting’s joint statement.

A European official, Wolfgang Schauble, perhaps straining at the meeting to understand the new American position. (source: NYT)

The full essay is at "European Officials at the G20."

1. Jack Ewing, “U.S. Breaks With Allies Over Trade Issues Amid Trump’s ‘America First’ Vows,” The New York Times, March 18, 2017.

Thursday, March 9, 2017

The E.U.’s Central Bank: Beholden to State-Level Politics

Faced with the rise of anti-euro candidates for state offices throughout the E.U., Mario Draghi, the president of the E.U.’s central bank deemed it politically prudent to depart from the light world of cool economic data to mount a spirited defense of the euro and even free trade in March, 2017. With the UK having voted to secede from the Union, he could not assume that the state of the Union would continue to be inherently viable. Indeed, some political candidates at the state level were “questioning the whole idea of a united Europe and the European Central Bank’s fundamental reason for being.”[1] Were such questioning to reach the mainstream across the E.U., the ECB would face an existential crisis. The E.U. itself may have been in such a crisis since the British voted to secede—much like the U.S. faced an existential crisis during the Lincoln administration. Fortunately for the E.U., only one state had voted to secede, so I think the existential crisis facing the E.U. had been overblown since the British referendum. Nevertheless, the political climate in the E.U. was such that Draghi felt the need to take heed of political criticism.
The political dimension of the central bank’s role is clearest in the bank’s stimulus program wherein it put money into the E.U. economy by buying corporate and state-government bonds. After the financial crisis of 2008, this program made a lot of sense. Almost a decade later, the pressing nature of the program had become more difficult to argue—the bank’s central task being to keep inflation under control. “It is time for the European Central Bank to start phasing out its expansionary monetary policy,” said Clemens Fuest of the Ifo Institute in Munich.[2] Yet in adopting such a policy, the ECB would invite the ire of anti-federalist/states’ rights politicians in the state of Italy, where unemployment in March, 2017 stood at 11.9 percent—three times as high as the rate in the state of Germany. So Draghi made the point that “extraordinary shows of solidarity” had been demonstrated within the E.U. by means of the common currency.[3]
It is important to take into account the imbalance of power between the states and the federal government. Whereas the federal institutions had taken most of the governmental sovereignty from the states in the U.S., the states in the E.U. had retained a substantial portion, hence leaving federal institutions, including the ECB, vulnerable even existentially. Put another way, the anti-federalist candidates for state offices throughout the E.U. would not have been such a threat to the ECB had more fiscal authority been transferred to the federal level. Generally speaking, state governments cannot be relied on to protect even the existing competencies (i.e., authority) of the federal level because the interests different. Simply put, the good of particular parts is not the same as the common good. That Draghi felt the need to defend his institution’s tasks simply because some state-level candidates could whip the federal level with electoral impunity (and even gain as a result!) is itself an indication that the states still held too much governmental sovereignty. This is the existential threat to the E.U. itself—that even the head of the central bank—an institution that should be insulated from political pressures—felt pressure to speak in defense of the euro and one of the bank’s programs simply because of political movements going on in some of the states.

[1] Jack Ewing, “As E.C.B. Charts Economic Course, Politics Complicate the Picture,” The New York Times, March 9, 2017.
[2] Ibid.
[3] Ibid.

Wednesday, March 8, 2017

Disentangling a Worsening Trade Deficit: Sector-Specific Industrial and Macro Economic Policy

he U.S. trade deficit rose 9.6% in January, 2017, to the highest level since 2012. The gap of $48.5 billion of exports exceeding imports looks daunting, yet the story is more complex at the sector level.[1] According to Neil Irwin of The New York Times, “What really matters is not whether the trade deficit is rising or falling. What matters is why?”[2] Distinguishing macro factors such as a strengthening dollar from sectoral strengths and weaknesses is thus necessary.

 The Port of Oakland. (source: Jim Wilson/NYT)

In the automotive sector, a $1.3 billion increase in exports corresponds to a $900 million increase in imports—essentially a draw. The $2.1 billion more in exports of industrial supplies is favorable, suggesting that that sector is doing well, but exports of civilian aircraft fell by $611 million, and other high-tech capital goods were also down, while imports of consumer goods—notably cell phones—increased by $2.4 billion. Boeing may simply have had a bad month, though it is also possible that Airbus had been out-competing its American competitor. The numbers on electronics add to the general perception that the U.S. is not competitive in such manufacturing. Industrial policy could address the possibility that automation and tax incentives (and penalties on American companies producing abroad only to import the finished goods back to the domestic market) could rectify this weakness in the American economy. 
Meanwhile, the balance of trade in services worsened by $5.3 billion. The fact that the money that foreign travelers spend in the U.S. on hotels and restaurants counts as exports suggests that a strengthening dollar could have been in play.[3] The Federal Reserve’s monetary policy was thus in play, for rising interest rates mean a strengthening of the dollar. Industrial policy may thus be less relevant here.
“A big piece in the rise in imports was crude oil and other petroleum products. They were up by a combined $2.2 billion.”[4] Exports also increased, by $1.2 billion, so this sector obviously contributed significantly to the overall trade deficit. To be sure, an increase in the price of oil favored producers, but this matter is dwarfed by the strategic national-security goal of self-sufficiency on fossil fuels. In terms of industrial policy, an expansion of domestic sources of oil and refining capacity may have been advisable at the time—not so carbon emissions would increase, but, rather, so imports of oil could drop.
In short, analyzing changes in a trade deficit requires distinguishing sectors, and, moreover, discerning where industrial policy recommendations are in order from cases in which macro political economic policy is at issue. Ideally, sector-specific industrial policies and macro policies are “on the same page.”

[1] Neil Irwin, “The Huge January Trade Deficit Shows Trump’s Hard Job Ahead,” The New York Times, March 7, 2017.
[2] Ibid.
[3] Ibid.
[4] Ibid.

Monday, March 6, 2017

Federalizing State Warheads in the E.U.: The Problem of Excessive State Power in a Federal System

Only months after Donald Trump became the federal president in the U.S., an idea, “once unthinkable,” was “gaining attention in European policy circles: a European Union nuclear weapons program.”[1] The arsenal in the state of France would be “repurposed”—which is to say, federalized in American terms—to protect the European Union rather than merely one of its states. The command of the weapons, as well as the funding plan and defense doctrine, would be federal. Even though the question of whether the E.U. could continue to count of American protection—there being dozens of American nuclear weapons in the E.U.—was at the time most tantalizing, I submit that the matter of federalism in the case of the E.U. is salient too.
Boderich Kiesewetter, a state lawmaker and foreign-policy spokesman with the ruling party in the E.U. state of Germany pointed to “four ingredients: a French pledge to commit its weapons to a common European defense, German financing to demonstrate the program’s collective nature, a joint command and a plan to place French warheads” in other states.[2] The joint command and dispersion of the existing warheads are particularly important to the transfer of the program to the federal level, especially given the amount of sovereignty that the states still retained. This imbalance carries with it the risk of dissolution (rather than consolidation). Should the E.U. break up, the state of France would doubtlessly reclaim the warheads existing in the state. This possibility alone would give the state government an inordinate amount of sway at the federal level on the common defense. Put another way, the nuclear program really would have to be federalized, with built-in assurances that France’s government would not be able to have disproportionate sway.
In regard to whether such a program should be federalized, it is notable that defense has typically been among the first domains to be assigned to a federal government. Federalism itself came out of alliances historically—where a common defense and the regulation (i.e., protection) of internal commerce were the two main benefits. The E.U. would be more in line with federalism historically were defense federalized. To be sure, the states would and arguably should retain their own military forces, as is the case in the U.S., so the states have some means of defending themselves not against each other but, rather, from federal encroachment—for instance, an over-extended federal military. One of the chief benefits of federalism is that the states can provide on the federal government, and vice versa. A balance in terms of state-level and federal-level defense can serve as a subtle bedrock or foundation as against not only consolidation, but also too much state power at the expense of the whole. Because the latter excess was still the case in the E.U. when the proposal was being debated in 2017, the federalization of the nuclear deterrent has a lot going in its favor. In fact, the excess of state power—wherein the interests of particular states can too easily supersede the common good of the Union—would (other things equal) make the federalization more difficult than is optimal for the good of Europe itself. This itself is an argument in favor of the federalization. It is important to a federal system that the state and federal powers are in balance, as both the cultural and ideological diversity between states and the common good of the whole (i.e., the Union) are legitimate and warrant a sufficient buttress of power.

[1] Max Fisher, “Fearing U.S. Withdrawal, Europe Considers Its Own Nuclear Deterrent,” The New York Times, March 6, 2017.
[2] Ibid.

Thursday, February 23, 2017

Should Same-Party-Affiliation Exclude Investigations on an Elected Official’s Misconduct?

A survey taken in February, 2017 of 1,571 political scientists on democracy in America reveals a possible problem regarding the extent to which government officials are sanctioned for misconduct. More than half of the respondents believed that the United States only partly meets or does not meet this criterion, whereas about 80 percent of the scholars insisted that the criterion is essential or important to democracy.[1] I submit that partisanship is a major obstacle to performance being able to meet expectations.

When the survey was released, Congress was on a week’s recess. Representatives and senators alike were facing contentious constituents back in the districts and states, respectively. An estimated 1,000 people attended Rep. Jason Chaffetz (R-Utah) “town meeting.” Recalling the yelling and screaming, he later said, “I thought it was intended to bully and intimidate [me].”[2] Democracy is messy. Moreover, the making of law, which binds an otherwise free people, is inherently conflictual as different interests and ideologies contend for influence on the final legislative output. Given the delegated trust placed in elected legislative representatives, their misconduct should be subject to real sanctions.

Ideally, misconduct should be extended to placing party above integrity—that is to say, giving elected officials a pass on their misconduct simply because they are of the same political party. Constituents can be out in front of even veteran members of Congress on this point. In his “town hall,” Chaffetz heard a constituent insist that Republicans in the U.S. House of Representatives should investigate President Trump’s conflicts of interest for instances of impropriety.[3] Even though much of the federal conflicts-of-interest law does not apply to the president, the American people arguably should know of actual instances in which the president has or is exploiting the relationship between his governmental power and business interests. Party should not trump integrity as concerning the obligation of members of Congress to provide a check on the executive branch, including the president.

I suspect that the force of partisanship on members of Congress stems in part from the political atmosphere in Washington, D.C.—such that the role of partisanship is perceived as being more significant than it should be and is to constituents back home. Of course, the threats doubtlessly made from higher in the party “food chain” provides an impetus to members of Congress to look the other way concerning the possible misconduct of colleagues of the same party. That a constituent expects her elected representative to put integrity before party in regard to investigating misconduct shows just how decadent the inbred culture of a political elite can be, even in a viable democracy. In other words, it is telling when an angry constituent is the adult and her representative is the child.

Democratic theory holds just the opposite—namely, that an elected representative can withstand the momentary excessive passions of the moment that have no such check in a direct democracy, wherein people vote directly on proposed laws such as was the case in ancient Athens. Put another way, representative democracy itself is a check against mob rule. It is telling, therefore, when someone from an angry mob is the adult in the room.

[1] Claire C. Miller and Kevin Quealy, “Democracy in America: How Is It Doing?The New York Times, February 23, 2017.
[2] Andrew Kaczynski, “Rep. Jason Chaffetz: People at My Town Hall ‘Intended to Bully and Intimidate’ Me,”, February 23, 2017.
[3] “Morning Edition,” National Public Radio, February 23, 2017.

Wednesday, February 22, 2017

How to Cure a Dysfunctional Company Culture: The Case of Uber

Valued at close to $70 billion and operating in more than 70 countries, Uber was giving traditional taxi companies a ride for their money in early 2017 when it came to light just how Hobbesian the company’s culture had become. In February, an engineer who had left the company two months earlier “detailed a history of discrimination and sexual harassment by her managers, which she said was shrugged off by Uber’s human resources department.”[1] Crucially, she claimed that “the culture was stoke—and even fostered—by those at the top of the company.”[2] Interviews with other employees and reviews of internal emails, chat logs, and tape-recorded meetings revealed incidents typified by one manager groping a woman coworker’s breasts at a company retreat, a director shouting an anti-gay slur at a subordinate during an argument, and another manager threatening to beat an underperforming subordinate’s head in with a baseball bat. The operative question is whether anything can be done about the accepted pathology.

Such an organizational culture is deep-rooted by the time it comes to such incidents. “It seemed like every manager was fighting their peers and attempted to undermine their direct supervisor so that they could have their direct supervisor’s job,” the engineer wrote. “No attempts were made by these managers to hide what they were doing: They boasted about it in meetings, told their direct reports about it, and the like.”[3] This means that the sordid values were well ensconced, and that even the top level of management knew and approved of them and the related conduct. Nevertheless, the CEO, Travis Kalanick, assured employees that he was “authentically and fully dedicated to getting to the bottom of this.”[4] Either his surprise at the report was feigned (i.e., he was lying) or he had been so out of touch with his own management staff that even the brazen conduct had somehow escaped his notice. With this latter alternative comes the question of whether his managerial work merited his compensation. The first alternative contains its own problem—namely, is it wise to rely on part of the problem to suddenly be in the fix-it seat?

To be sure, bringing in the “big guns”—Arianna Huffington and the former U.S. Attorney General Eric Holder to “look into harassment issues and the human resources department” is in line with going outside of the extant management of the company. Yet the brazenness of the aggressive conduct indicates that “harassment issues” and the company’s HR department were only the tip of the iceberg. The question is: how to get the squalid stain out of the entire iceberg. It is a contradiction in terms to say that the stained can themselves do it. At the very least, they obviously had no problem with being infected, so the labor would at best be artificial rather than genuine.

Given the cumulative effect of successive hires and “outliers” self-selecting themselves out or being fired, a different type of person would need to be occupy a threshold-proportion at least of the positions in the company’s headquarters for the culture to change. “Training” sessions cannot get at matters of values and attitude—which tend to be more fixed in a person than skill-level. Sensitivity training would likely be a joke—even the mere suggestion could be taken as a sign of incompetence on how to eradicate such an ingrown sordid culture. Of course, the entire top management would have to go. This is admittedly not the path of least resistance. Hence, the prognosis is typically not good for such ill-health that has been so contagious.

1. Mike Isaac, “Inside Uber’s Aggressive, Unrestrained Workplace Culture,” The New York Times, February 22, 2017.
2. Ibid.
3. Ibid.
4. Ibid.

Friday, February 17, 2017

Holding Back the E.U.: What Is It?

In addressing the E.U. Parliament in February, 2017, Canada’s prime minister, Justin Tradeau, claimed that the E.U. “is a truly remarkable achievement and an unprecedented model for peaceful cooperation.”[1] The only problem with the compliment is that it is not true. The U.S. is the precedent, as it was formed as an alliance in part to stave off war between its member states.
On both sides of the Atlantic Ocean, the American alliance was viewed as international in nature until its Articles of Confederation were superseded in 1789 by the creation of a federal government.[2] Put another way, the member states held all governmental sovereignty (and the Continental Congress had none of its own) until the Constitution of 1787 came into effect. When Tradeau addressed the Parliament, which is akin to the U.S. House of Representatives, the E.U. federal level had achieved appreciable sovereignty and along with it more in the way of a federal government than a European Continental Congress would instantiate. The European Court of Justice was by then well established as the E.U.’s federal Supreme Court, the European Commission was a federal executive branch with a role in law-making, and the Parliament itself was a legislative body representing E.U. citizens rather than states (the European Council, like the U.S. Senate, represented states). In short, the E.U. fits the model of the U.S. after the Articles of Confederation, when sovereignty was split between the member states and the Union. Even so, The New York Times refers to the E.U. strangely as “an alliance,” as if the E.U. with all its federal governmental institutions and sovereignty were like the U.S. when it was a mere alliance with delegates of the sovereign countries meeting in a Continental Congress.[3]
Clarification on what the E.U. can itself have a strengthening effect on the Union—especially as concerns its federal level. For example, the E.U. misunderstood as an international alliance would not get much confidence in its ability to forestall war from breaking out between the states. Yet recognition that the E.U. and U.S. (post Articles) are of the same genre, or model, can instill greater confidence—and the E.U. needed that in the wake of the British vote to secede from the Union.
A principal benefit of both the E.U. and U.S. is the use of the federal level to prevent war from breaking out between the states. The U.S. was successful in this regard until 1861; Tradeau’s optimism in 2017 could be extended to the hope that the E.U. would enjoy a longer stretch of internal peace. Whereas some people pointed to the secession of Britain as a baleful indication that the peaceful potential of the E.U. would be reduced, I submit that the E.U.’s flexibility on the matter of secession—certainly a contrast to the rigidity in the U.S.’s stricture of “perpetual Union” being interpreted to mean no loss of even one member state!—renders the E.U. stronger rather than weaker, and thus better able to prevent war from within because the needs of different states can be accommodated rather than stifled.
Indeed, the E.U. stood to strengthen by the secession even just in losing the British denial that the E.U. was more than an alliance, or “network,” of states. It is curious that the secessionist camp in the UK nevertheless listed the sovereignty “in Brussels” as one reason in favor of secession. Although other “Euro-skeptic” states, such as Poland and the Czech Republic, remained, the center of ideological gravity could shift closer in line with the fact that the E.U. had federal government institutions, including a court, an executive branch, and two exclusively legislative bodies—the European Council and the European Parliament. Greater clarity and consistency on the whole regarding what the E.U. is could only strengthen the Union.

1. James Kanter, “Trudeau, Praising the E.U., Doesn’t Mention ‘Brexit’ or Trump,” The New York Times, February 16, 2017.
2. Skip Worden, British Colonies Forge an American Empire.
3. James Kanter,Trudeau, Praising the E.U., Doesn’t Mention ‘Brexit’ or Trump,” The New York Times, February 16, 2017.

Thursday, February 16, 2017

On the Value of Business-Societal Linkages: Facebook’s Zuckerberg Opposing President Trump?

In a public letter in February, 2017, Mark Zuckerberg, founder and CEO of Facebook, linked his company’s product, the online social network, to the societal and indeed global level in claiming that “progress now requires humanity coming together not just as cities or nations, but also as a global community.”[1] The New York Times took this to mean that the CEO “stepped into the raging debate about globalization.”[2] Taking sides in a political or cultural debate can both advance and harm a business, hence the matter of the stepping into is worthy of analysis in its own right.

Generally speaking, it is not prudent business for a CEO to plant the company in which he or she works on one side or the other of a controversial matter, as existing and potential customers on the other side can be expected to move to a competitor—even if that competitor has not taken a side in the debate. That the New York Times construes Zuckerberg as taking a position at odds with U.S. President Trump’s nationalism may be an indication that Trump supporters may also interpret Zuckerberg’s move thusly and so gain a negative view of Zuckerberg’s company. This attribution of association may be tenuous, however, as it is possible to be in favor of humanity coming together in terms of human rights, for instance, and minimizing state aggression, and yet still be for penalizing American companies that have taken plants abroad to take advantage of lower wages and less regulation. Even so, perception can become reality, so Trump supporters could view Facebook negatively anyway and the damage would be done.

Zuckerberg might advisably have listed some examples of social goods that could be furthered by humanity coming together—omitting mention of Trump policies. Efforts to assure readers that Trump’s policies are not in the crosshairs would have been a good investment. To be sure, “Zuckerberg said his reasons for writing the . . . letter began to take shape before [the 2016] presidential election, spurred by broader trends. He said he [had] recognized that more people were feeling left behind by globalization, and by societal and technological changes.”[3] His vision was for “a global community that works for everyone.”[4] This includes a viable “social infrastructure” that would include stronger online communities. Given Facebook’s interest in helping people from being left behind technologically, the social infrastructure should be a salient part of the global community that works for everyone.” In other words, helping people to join the technological age (and thus be able to participate on Facebook!) does not necessarily translate into opposition to a tax on American companies with factories abroad or enforcing immigration law. Zuckerberg could have made this point more explicit; his “Facebook-friendly” interpretation of “global community” would actually have been strengthened in the process.

We can conclude from this case that wading into a controversial issue involves pitfalls for a business, yet they can be obviated by steering clear of politics such that efforts to link business strategy to a societal and even global vision can pay off for a company without a lot of risk.  

[1] Mike Isaac, “Facebook’s Zuckerberg, Bucking Tide, Takes Public Stand Against Isolationism,” The New York Times, February 16, 2017.
[2] Ibid.
[3] Ibid.
[4] Ibid.