Category Archives: Economics

Words do matter in the immigration debate

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—Ediberto Román and Bobby Joe Bracy

[This post originally appeared on the Latinovations blog. Read it here.]

After decades of inaction, this week’s unveiling of the Senate’s “Gang of Eight” immigration proposal suggests that Congress may finally be prepared to reform our immigration system. It is of no surprise that this renewed vigor comes on the heels of a presidential election where an overwhelming majority of Hispanic voters rejected the Republican solution was self-deportation. Yet, despite this crucial and potentially transformative moment, Republican leaders, such as Senator John McCain, one of the Group of Eight, has continued to use of ‘illegal immigrant’ when addressing the subjects of reform. He and many other Republicans who oppose immigration reform continue to use the more provocative yet inaccurate term–“illegal alien”(a term still used by the federal immigration agency, ICE). Conservative Senator Jeff Sessions for his part derided the Gang of Eight’s efforts as “making nearly impossible for ICE officials to distinguish between ‘illegal immigrants’ eligible for legal status and those simply asserting they are amnesty eligible.”

Notwithstanding the insistence to label human beings as “illegal” merely because they have committed what under federal law is a misdemeanor, other important avenues of communication and education are beginning to change the heretofore tone of the debate. Just over a week ago the Associated Press (AP) came to a decision that has gone virtually unnoticed in legal and political circles. Yet the decision was profound. The AP “no longer sanctions the term ‘illegal immigrant’ or the use of ‘illegal’ to describe a person. Instead, it tells users that “illegal” should describe only an action, such as living in or immigrating to a country illegally.”

A week later, USA Today made a similar decision to refrain from using the term, concluding that: “the term illegal immigration is acceptable, but do not label people as illegal immigrants, except in direct quotes. Undocumented immigrant, undocumented worker and unauthorized immigrant are acceptable terms — depending on accuracy, clarity and context… Do not use illegal or illegals as a noun. It is considered pejorative by most immigrants.”

While Fox News subsequently accused the AP of trying to influence immigration debate, the fact is the AP and the USA Today decisions were sound on several fronts, not the least of which is the accurate use of the English language as well as the legal and social impact of a discrediting imprecise term such as “illegal immigrant.”

Legal scholars have long recognized the inappropriateness of the use of the term. University of California, at Davis, Dean Kevin Johnson, for instance, observes: The most damning terminology for noncitizens is “illegal alien…‘Illegal aliens’ is a pejorative term that implies criminality, thereby suggesting that the persons who fall in this category deserve punishment, not legal protection.” Johnson further notes, “The illegal alien label…suffers from inaccuracies and inadequacies at several levels. [In fact,] many nuances of immigration law make it extremely difficult to distinguish between an ‘illegal’ and a ‘legal’ alien.”

Leading linguists agree, and last year a group of 24 scholars criticized the Associated Press’ previous assertion that the term “illegal immigrant” was accurate and neutral. These experts noted: “This misleading construction of illegality is tied to the circulation of troublesome stereotypes about the migration status of different ethnoracial groups. Specifically, assessments of illegality are often associated with unreliable signs of one’s migration status, such as language, religion, and physical appearance. These presumptions lead not only to law enforcers’ regular misidentification of people’s migration status based on wrongful assumptions about ethnolinguistic markers, but also to the broader public stigmatization of those markers.”

As the leading law dictionary, Black’s makes clear, no person, including an alien, is “illegal.” The word “illegal” is an adjective, or “a word … typically serving as a modifier of a noun to denote a quality of the thing named.” Thus, no person, including an alien, is illegal. Accordingly, an alien is “a person resident in one country, but owing allegiance to another.” In other words, our laws regulate the legality of the “conduct” of persons, but do not attempt to classify human beings in such a manner. We do not, for instance, classify a seven year old that steals something as an “illegal child.” Such a label would not only be deemed absurd, but also morally bankrupt. Our laws have never gone as far as to make the persons involved “illegal.” The idea that a person might be “illegal” is thus not only inhumane; it is also grammatically inaccurate, as well as legally incoherent. There are simply no laws adequately governing the issue of “illegal personhood.” As Johnson points out, although “alien” appears repeatedly in the Immigration and Nationality Act, the term “illegal alien” is not once defined.

In sum, substances and other objects can be illegal, and conduct can be illegal—but a person cannot. As Nobel Laureate and Holocaust survivor Elie Wiesel aptly noted years ago, “No human being is illegal.”

The AP’s decision is couched in bedrock ethical and professional concerns about accuracy in reporting. As AP’s Kathleen Carroll explains…”Will the new guidance make it harder for writers? Perhaps just a bit at first. But while labels may be more facile, they are not accurate.”

Social justice and civil rights advocates have long fought similar battles over truth and accuracy, which is not an easy battle when facility makes ignorance so appealing. As the AP now calls for: Specify wherever possible how someone entered the country illegally and from where. Crossed the border? Overstayed a visa? What nationality?

In other words: do your homework, and describe the action or conduct that is illegal.

The decision is the only fit response to critics who dismiss this issue as “political correctness” or “censorship.” The aim evidently was not to “censor” ideas or speech, but to be critical of terms that bury a great deal of important information. In almost any context, these questions are not only significant for reporting, but legally significant. People’s rights are in the balance. As a federal court recently observed in U.S. v. Cruz-Padilla, where the court held that the defendant was entitled to a new trial because the prosecution relied on the term “illegal alien” in their closing arguments in front of a jury. Citing the Supreme Court’s earlier decisions (holding that the Constitution’s “due process” clause prohibits the use of “racially biased prosecutorial arguments”), the Cruz-Padilla Court characterized the “improper” use of the term “illegal alien” as a “foul.”

Law and psychology experts likewise have long recognized, markers or labels, especially politically loaded negative labels, have the ability to shape public policy and laws. Such labels help shape what is described as implicit bias, or mental shortcuts that allow us to make negative associations of groups that are undeserving of such negative categorizations. Stereotypes, for instance, allow society to use mental shortcuts, or schema, to associate individuals with a discrediting quality. These discrediting qualities in turn make it easier for policy makers to enact laws that seek to protect us from those with such qualities.

Sadly, history is replete with such efforts. For instance, one of the first and easiest ways for the Third Reich to enact its laws and policies was to stigmatize the Jewish community with similar discrediting qualities. These efforts paved the way to pass laws and enact horrific policies to allegedly protect society from these dangerous contagions. The use of the label illegal alien has a similar social effect. It has labeled a group of persons, who under our criminal and immigration laws have committed typically nothing more than a misdemeanor, as a group of hardened criminals that we should fear and exclude. As more and more Americans are realizing, and opinion polls reflect such realization, this label conflicts with reality.

With the recent announcements by the AP and the USA Today, we hopefully begin a path of engaging in narratives based on accurate depictions, and not stigmatizing labels. No longer is it ethical or responsible to use the discrediting marker “an illegal human being”—if indeed it ever was.

Ediberto Román is a nationally-acclaimed scholar and an award-winning educator with broad teaching interests and an extensive scholarship portfolio. He is the author of several books, including Citizenship and Its Exclusions: Classical, Constitutional, and Critical Race Perspectives (NYU Press, 2010) and Those Damn Immigrants: America’s Hysteria Over Immigration (NYU Press, 2013).

Bobby Joe Bracy is a law student at Florida International University and an immigrant rights advocate. He is currently a research assistant for Ediberto Román, and the President of the National Lawyers Guild at FIU Law.

New Spreadable Media essays: Week 3

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We’re at week three since launching the online component of Spreadable Media: Creating Value and Meaning in a Networked Culture!

Here are this week’s round of web exclusive essays written by selected contributors who have shaped the argument put forth in Spreadable Media:

  • “The Value of Retrogames“—Bob Rehak, a film and media studies professor at Swarthmore College, examines how grassroots interest in residual media and culture may coalesce online, sparking new kinds of cultural practices and production.
  • Clothing has passed between different kinds of exchanges for centuries, acquiring different meanings and values in the process—and, in “A Global History of Secondhand Clothing,” filmmaker and MIT media historian Hanna Rose Shell traces and examines those shifting sartorial roles.
  • In “Retrobrands and Retromarketing,” York University professor Robert V. Kozinets discusses the strategies through which companies engage in “retrobranding,” reviving or relaunching brands from the past in ways that capitalize on existing fandoms and provide launching points for the creation of new markets.

Check ‘em out, and stay tuned at http://spreadablemedia.org/essays—where each week leading up to the book’s publication (in January 2013!), a new batch of exclusive essays will be released.

(And hey! Feel free to debate/critique/trash each piece in the comments section. Expand the conversation, transform the ideas. That’s how spreadable media works.)

Obama, Romney: But who will tame the megabanks?

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—Steven A. Ramirez

While the economy has been a centerpiece issue in the 2012 presidential campaigns, the election rhetoric thus far is silent about controlling concentrated economic power to restore economic growth. If the historic financial meltdown of 2008 has taught us anything, it’s that it takes only a small handful of corporate and financial elites to inflict trillions in costs upon the general economy. Without sound economic regulation, those controlling excess wealth will enrich themselves at the expense of society. And yet, neither candidate forcefully advocates the taming of the megabanks which today control unprecedented resources.

During the recent presidential debates, key issues involving the megabanks weren’t even touched upon by Obama or Romney. Among those not discussed:

  • Not a single Wall Street executive at any of the megabanks at the center of the crisis suffered criminal penalties despite numerous securities fraud settlements. Unprecedented frauds at the megabanks met with unprecedented docility from prosecutors.
  • The Dodd-Frank Act empowers the government to break-up megabanks posing a “grave threat” to financial stability. Yet these banks still enjoy a massive subsidy in their cost of funds (about $16 billion a year for the top five megabanks) and under-perform financially. Thus, the megabanks by definition threaten financial stability, and the government should require the weakest among them to spin-off operating divisions to their shareholders.
  • Given the huge subsidy that megabanks still enjoy in capital markets, why not toughen up Dodd-Frank further to convince capital markets that “too big to fail” is truly over? Toughening Dodd-Frank did not warrant a word of discussion. Yet, according to polls the vast majority of American voters disfavor continued subsidies for megabanks.

The point transcends financial regulation. With all the talk of jobs, neither candidate offered any kind of jobs program. Just restoring the estate tax to Clinton-era levels (only estates over $1 million pay) would free up $50 billion for millions of jobs. Other topics not permitted on the agenda include: reforming the structure of globalization, stiffening corporate governance law, funding the needs of the 25% of American children living in poverty, and so on.

Echoing the thesis of my book, Lawless Capitalism, anything that threatens the current holders of the largest aggregations of wealth in American history is off-limits for any discussion at all. Instead, the debates focused on whether to cut entitlements and which tax cuts to preserve. The candidates spent much time debating whether slashing tax rates a further 20% made sense.

However, solutions are at hand. Americans must view economic despotism with the same suspicion as political despotism. In terms of this election, that means being mindful of money’s influence on electoral politics, and considering which candidate is most heavily funded by the megabanks (opensecrets.org, for example, tracks contributions). At its founding, America threw off political royalty; it’s time now to do the same with economic royalty.

Steven A. Ramirez is Professor of Law at Loyola University of Chicago, where he also directs the Business and Corporate Governance Law Center. His book, Lawless Capitalism: The Subprime Crisis and the Case for an Economic Rule of Law will publish in December 2012.

Chinese growth and happiness

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—Peter N. Stearns

Recent surveys on Chinese life satisfaction provide yet another indication of the fraught relationship between modern development and overall happiness. The New York Times report by Richard Easterlin—always one of our most interesting social scientists—shows pretty clearly that stupendous growth in the overall economy and in consumption standards over the past two decades has not only not generated corresponding increases in reported satisfaction, but has actually accompanied a decline. Results plummeted as growth accelerated in the 1990s, then picked up a bit in the past few years but without recovering 1990 levels.

Happiness is a tricky thing to measure, of course, and it’s interesting that the Easterlin terminology alternates between happiness and life satisfaction, which are not necessarily exactly the same things. Comparative studies suggest that happiness is a tricky concept in East Asian cultures (in contrast to the West and Latin America), but this would not per se distort findings over time within the same culture.

It’s certainly nice to see a discussion of Chinese issues free from our common impulse to bash or gloat. This is a nervous time for mutual U.S. and Chinese perceptions, and we often distort problems in an effort to feel better—happier?—about China’s impressive surge. (Here’s a scary thought: How much has American happiness come to depend on claims we’re better than others, regardless of data?)

But the Easterlin findings do suggest a couple of further thoughts about happiness and modernity:

First, the findings are absolutely unsurprising in any historical perspective. China is still in relatively early phases of industrial maturation. I don’t think there is any record of any society in a similar phase in which happiness does not decline. Of course we lack the polling data for the past that we now enjoy, so my assertion can’t be fully proved. But the major source of outright decline in China rests among the bottom third of the population, faced with massive change including introduction to factory work conditions and encounters with urban life even as attachments to the countryside remain strong. This sounds eerily familiar to historians who have worked on Britain’s—or Germany’s, or Japan’s—industrial surge—or even the United States’s in its period of massive industrial immigration. This doesn’t detract from the Easterlin findings, or prevent us from hoping that the Chinese will more quickly figure out how to do things better. But it does remind us—regardless of our views on the benefits and drawbacks of more fully achieved modern economies—that modernization has always come with a price.

Which means that, in evaluating modernity more generally, the more interesting Easterlin finding may be the only moderate improvement in satisfaction among the upper third of the Chinese population. These folks are not facing the worst strains of the process. They are by definition more prosperous, and often more accustomed to urban conditions. Yet even they are not jumping with joy.

Easterlin concludes that the Chinese data point to the important of beefing up the safety net, to provide fuller protections for the poorer classes: more job security, better health care, more help for children and the elderly. And he uses his findings to warn Americans about tolerating too much further deterioration in our own nets. I don’t disagree, and would only add a plea for attention to environmental safety nets as well.

But there is probably more than safety nets involved, which is where the upper third comes in—and where we can also draw some lessons for ourselves. We know that, reflected in the Chinese case, a first turn to consumerism increases happiness but that the surge is often moderate and that it’s always finite: further improvements don’t help. China may be facing not only safety net issues but also broader concerns about finding value and meaning in modern life. And here, though there may be more specifically Chinese factors involved, they clearly join the modern throng.

For although modernized societies tend to be happier than nonmodern, the gap is variable and not, on the whole, as great as might be expected given standard of living gains. Here is where, along with safety net repair, Chinese and American observers unquestionably find common ground. We all need to be thinking about improving our management of modern success at both social and personal levels. We need to seize opportunities to share insights and learn from mutual experience. More and more of us, obviously, are in the modern boat together, and we can probably figure out how to steer it better.

Peter N. Stearns is Provost and University Professor at George Mason University. He is the editor-in-chief of The Journal of Social History, and author of Satisfaction Not Guaranteed: Dilemmas of Progress in Modern Society (NYU Press, 2012).

Why Romney won the debate

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—Robert Cherry

As the debate unfolded, my worst fears came to the fore: Democrats never win if they posture themselves as more responsible deficit fighters than their Republican opponents; that the goodies Republicans promise just don’t lead to deficit reduction. Whether it was Ronald Reagan or George W. Bush, and now Mitt Romney, they always make promises to pay for the tax benefits that they give by suggesting that the economy will grow enough to generate the necessary revenues. And Romney superbly articulated this thesis.

It always works because it avoids making difficult decisions on spending cuts; cuts that neither Republicans nor Democrats nor the American public wants to consider. It also works because the size of the federal debt is an unclear abstraction. When is the debt too large? It was 120 percent of national income just after WWII so the projected 90 percent isn’t so bad. And with low interest rates, the carrying costs are actually a marginal burden. So as long as the Chinese and others are willing the buy the bonds what’s the problem! And as Romney stressed effectively, Obama argued against tax increases for the rich a year ago, claiming we shouldn’t raise taxes when the economy is so weak; and economic growth is weaker now than it was then.

Romney also moved the discourse toward a comprehensive approach to tax reform. He proposed lowering tax rates accompanied by reducing the tax deductions that would be allowed. Romney was not too specific as there are a number of ways to accomplish this: Simpson-Bowles and Domenici-Rivlin are the two mostly widely discussed. Unrealistically, Obama claimed that he would only raise taxes on the wealthy, even though he is well aware that after the elections, comprehensive tax reform along the lines Romney is proposing will play a central role in tax policy deliberations.

Romney’s approach to the deficit should not sit well with the Tea Party followers. They heaped scorn on George W. Bush for not curbing spending to limit the deficit and claim they will not allow this to occur again. As a result, Tea Partiers will not be happy with a President Romney if he follows through with what he said at this debate. But if the American voters believe this more moderate Romney is the real Romney, Obama will have a much more difficult road to victory than he thought two days ago.

Robert Cherry is Brueklundian Professor in the Department of Economics at Brooklyn College of the City University of New York. He is the author of Moving Working Families Forward: Third Way Policies That Can Work (NYU Press, 2012).

Romney-Ryan: Americans for inequality

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—Robert Cherry

Logo of Americans for Inequality, a satirical Facebook group who recently endorsed the Romney-Ryan ticket.

Republican hopefuls, Mitt Romney and Paul Ryan, strongly believe that providing economic incentives for entrepreneurs is central to economic growth, so that government business regulations and taxes are harmful. This vision provides the central justification for many features of Ryan’s budget proposal, including lowering taxes on the wealthy and rejecting restrictions on small business decision-making.

Small business has always been a safety valve for men who did not excel in the educational system. Having access to capital from their family or social network, many men could open a business and expect to attain a middle-class standard of living.  The big box stores, however, have constrained this option substantially so that the small business environment has increasingly become a place where dreams are unfulfilled. Even before the Great Recession, three-quarters of the 27 million businesses had annual sales of less than $100,000. Most disheartening, 93 and 85 percent of black and Latino/a owners, respectively, did not reach this sales level.

Unable to forestall this transformation, millions of frustrated small businessmen and their families have chosen to direct their anger at government. The Ryan-Romney rhetoric has increased this scapegoating and underpins the viciousness of many of the personal attacks on President Obama.

Romney and Ryan lionize individual entrepreneurship because it reflects the way they assess their own life stories. Both believe that their success was self made. It is why they reacted so strongly when President Obama claimed that entrepreneurs do not build their companies alone. Government provides the business supports, he argued, that create a healthy and productive business environment.

What is most troubling is that neither Romney nor Ryan considers the crucial role government funding plays in furthering economic growth. Ryan’s budget doesn’t simply slash funding to the most vulnerable people: the poor and the elderly. It slashes government funding for transportation infrastructure, research, job training, and general education. However important the entrepreneur is, without these building blocks, it is difficult to see how the United States can grow and prosper in an increasingly competitive world economy. Indeed, in the hi-tech sector, expanding the base of entrepreneurs with the necessary technical background requires a government supported first-class educational system.

Even if their own success was not aided by government, Romney and Ryan ignore their privileged backgrounds. They both came from families that provided sufficient social and financial capital for them to have opportunities that most individuals do not have.

Today, the vast majority of children live in families who have no wealth, outside of the dwindling equity in their homes, that can be used to fund their children’s education. Romney showed his insensitivity to this reality when, at a campaign rally in Ohio, he urged students to pursue entrepreneurship, even if it meant they would “borrow money, if you have to, from your parents.” By not investing in the necessary human and physical capital, the Romney-Ryan vision will not only reproduce the same class and race inequalities that exist today but will hinder the economic growth that we desperately need.

Robert Cherry is Brueklundian Professor in the Department of Economics at Brooklyn College of the City University of New York. He is the author of Moving Working Families Forward: Third Way Policies That Can Work (NYU Press, 2012).

New Mothers Tax Relief Proposal

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Economist Robert Cherry introduces us to his new tax policy proposal, the New Mothers Tax Relief (NMTR). The proposal was cited yesterday by Nancy Folbre on the New York Times blog, Economix, and recently published in the influential policy journal, Tax Notes.

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The Earned Income Tax Credit (EITC) is an important anti-poverty policy. There are, however, a number of drawbacks due to the phasing-out of benefits as household income rises. For 2011, a single mother with annual income of $15,000 and one qualifying child obtains $3,094 from the federal EITC.  If she marries a man earning $25,000 annually, virtually all of these credits would be lost. This is part of the lost benefits from means tested programs that can dissuade working mothers from marrying the father of their newly-born child. Indeed, it might be an important reason why today more than half of new mothers under 30 years old are unwed. A second problem with the current EITC is that it provides virtually no benefits to lower middle-class families with children because they have too much income to qualify.

My New Mothers Tax Relief (NMTR) proposal rectifies both of these problems. It has a more generous alternative EITC schedule for families that have one pre-school age child, allowing lower-middle income married families to gain most of the benefits now available to lower-income households. In addition, by extending these benefits, it reduces the substantial marriage penalty single working women now face.  Specifically, the more than $2,500 federal marriage penalty single mothers with incomes of $13,000 to $25,000 face would be virtually eliminated. This change will allow women giving birth to their first child a chance to base a marriage decision on factors other than the federal marriage penalty they face. In addition, it will reduce the financial strain many young married couples experience when they have very young children; a strain that causes marital discord and separation.

By providing needed funds to lower middle class married families and reducing the marriage penalty, this proposal is both pro-family and pro-marriage. It is also well targeted compared to the current payroll tax reduction where 44 percent of its benefits go to families with incomes over $100,000. By contrast, the NMTR proposal provides no benefits to these upper-middle class families. Lower middle-class families should no longer be denied the aid that they deserve when they have very young children.

Robert Cherry is Brueklundian Professor in the Department of Economics at Brooklyn College of the City University of New York and author of Moving Working Families Forward: Third Way Policies That Can Work.

The Precarious Employment Podcast

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From KPFA’s Against the Grain:

Download program audio (mp3, 41.02 Mbytes)

The era of stable, secure, steady work with one employer is over. According to Andrew Ross, author of the book Nice Work If You Can Get It, precarity has become a central element in people’s lives. What explains the rise of contingent employment, and how prevalent has it become in the creative economy and in education? Ross talks about recent trends and their impact, and offers his vision of an alternative to “flexploitation.”

Susan Boyle: Just Another Unregulated High Risk Investment?

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Andrew Ross, Chair of NYU’s Department of Social and Cultural Analysis, is author of Nice Work If You Can Get It: Life and Labor in Precarious Times. Illustration courtesy of The Painter Of Pancakes.

Susan Boyle is the would-be Scottish Edith Piaf, whose vocal prowess on a TV talent show brought her instant global fame month. The stark contrast between her humble station and the nobility of her voice caught the mood of the recession. Indeed, the story of this unemployed and socially isolated woman who hit the media jackpot may be the first of many such parables thrown up by our hard times. As millions around the world lose their jobs every month, and countless more confront the fear of falling, the Depression genre of “rags-to-riches,” which brought us Seabiscuit and other unlikely champions, will get a good airing. The lucrative talent show industry (which exploits “free” amateur labor) is in the right place at the right time to sell us this kind of solace.

But consider how the spectacle of underdogs walking off with the top prize is just another expression of the casino economy that has proven so catastrophic to the security of most of our livelihoods. Over the last two decades, paid work has become more and more of a gamble. More and more employees have had to go it alone, involuntarily for the most part, as they compete for the lucky break that will bring security and wealth. Even before the recession, over 30% of the American workforce were in non-standard employment, in a limbo of uncertainty, working from one temporary contract to another as members of the precariat. The high wage temps, once lionized as “free agents” for breaking their dependence on a regular paycheck, frazzled their souls in pursuit of a career hit. By definition, most of the contestants are sorry losers in this game, and they were among the first to fall into the unemployment hole.

Financiers who placed their plush bets using other people’s money have rightfully earned themselves public contempt. Now it’s time to de-glamorize risk, and to draw a firm line between the fantasy of auditioning for a TV talent show and the reality of making a living. If and when jobs reappear, they have to look less like lottery tickets. It would also help if their products were sustainable (land-gobbling subdivisions, gas-guzzling vehicles, earth-poisoning armaments, high-carbon energy, and financial instruments are not). But much of that depends on the people formerly known as employers, for those who answer to that description are increasingly thin on the ground. Can they learn how to behave like stewards of peoples’ livelihoods, by committing to workers in the long term? If not, then the definition of a job is going to mutate into something closer to its etymological origin–a discrete “lump,”or “piece,” of work that exists only for the duration of its fulfillment.

Party with Andrew Ross and Stanley Aronowitz

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We had a great party last night for Nice Work If You Can Get It and the launch of the NYU Series in Social and Cultural Analysis. We had a plethora of NYU faculty, including a number of NYU authors, like Arlene Davila, in our offices at Union Square. And we had some other luminaries stop by as well—Bruce Robbins (Columbia), Stanley Aronowitz (Grad Center), and Ramon Gutierrez (Chicago).

Here are two brief videos, one of Andrew Ross and the other of Stanley Aronowitz, both talking about the what, where and why of Andrew’s book.

Andrew:

Stanley:

Bananas & Terrorism

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Corporate Social Irresponsibility in Bananaland
Marcelo Bucheli (author of Bananas and Business: The United Fruit Company in Colombia, 1899-2000. New York: New York University Press, 2005)

After extended efforts to clean up its awful image, in March 2007 the Cincinnati-based banana company Chiquita Brands pleaded guilty to the Department of Justice for paying $1.7 million to different Colombian terrorist groups between 1997 and 2001. The company paid both the right-wing paramilitary organization AUC (United Self-Defense Forces of Colombia) and the left-wing FARC (Colombian Revolutionary Armed Forces). Both organizations are included in the US list of international terrorist groups and are deeply involved in cocaine trade. Chiquita is the same company that in 2002 was named one of the top 20 “green stocks” by the Progressive Investor and in 2003 received the “Corporate Conscience Award” from Social Accountability International. In 2005, the company announced that 100% of its Latin American plantations had been certified to comply with International Labor Standards as well as with the environmental standards established by the Rainforest Alliance. According to the company, these were the results of a new corporate Code of Conduct consistent with the currently in vogue term “corporate social responsibility.” At the present time, almost no big multinational fails to have a section on “Corporate Social Responsibility” in their Annual Reports, and business schools are increasingly producing scholarly material or creating courses on corporate ethics and social responsibility. Continue reading →