Are Web Firms Giving in to China?

Carl Bialik from the WSJ writes "Google and other Internet companies are sending executives to Capitol Hill for a hearing next week seeking to answer the question: Are U.S. companies giving in to China's censorship demands too easily? Chris Smith, New Jersey Republican and chairman of the House human-rights subcommittee that is holding the hearing, tells the Wall Street Journal, 'I was asked the question the other day, do U.S. corporations have the obligation to promote democracy? That's the wrong question. It would be great if they would promote democracy. But they do have a moral imperative and a duty not to promote dictatorship.' The WSJ notes an irony: Google is fighting for 'Internet freedom' in the U.S., by resisting the Justice Department's request for information on user searches."

Of course they are

[sl4shd0rk]

Where else in the world can capitalism legally exploit human rights for big time savings? Not only that, but all the manufacturing waste can be dumped in the river behind the factory - no EPA!! woohoo!!

The law.

[XMilkProject]

Something to keep in mind, that was mentioned last time we had an article like this:

There are very strict and clear legal precedents about publicly traded companies. They are required by law to make all decisions in such a way that will maximize profit. I think people are forgetting that Google is not a private company, there is not one man making the business decisions.

They are responsible to millions of shareholders, a large board of directors, and many private investors.

If Google took actions (i.e. avoiding Chinese market) that significantly reduced profits, for no logical reason, they could easily be facing massive litigation from shareholders.

If i'm not horribly mistaken, I think the Dodge Car Company was started with money the Dodge brothers received from Ford Motor Company when they sued Ford for keeping their car prices low instead of maximizing profits. (Dodge brothers were investors in Ford). Maybe someone else can provide more detail about this.

Starving

[XanC]

It's that work, which is a reasonable wage there, which prevents people from starving.

Re:money is money...

[Anonymous Coward]

Legally corporate executives are obligated to care about shareholder profits above all else, up to the limit of what the law allows. They either do so, or are replaced, and perhaps sued if it is profitable to do so (usually not).

Unless the law explicitly forbids an activity, you cannot expect a publicly held corporation to be moral, merely legal. Private corporations can do what they want, but usually aren't as well funded and thus influential.

what about the law?

[theonlyholle]

For me the more interesting question is, don't corporations have an obligation to obey the law in countries they operate in? How can anyone seriously demand of Google (or any other company) to break the law in China? They have the right to do business there, same as in my country, and when they do, they have to do it in a law abiding way. We may not like the law and if it hurts their business elsewhere, a company may make the decision not to do business in a certain country... but that's a question of business ethics. I don't think any government should be allowed to dictate where a company can do business.

Re:Morality don't enter into it

[PsiPsiStar]

If a company includes ethical principles in its charter, it is legally allowed to consider things other than profits. This type of thing is rare, but it does happen.

There certainly moral and ethical corporations. But corporate morality and ehticality ends up getting framed in terms of greed. If a corporation pays its employees a good wage, it's assumed to get better or more loyal employees from this.

Re:The law.

[XMilkProject]

This is stolen from another post from a few weeks ago:

From Wikipedia http://en.wikipedia.org/wiki/Corporation [wikipedia.org] :

Profit Maximization. In Anglo-American jurisdictions, for-profit corporations are generally required to serve the best interests of the shareholders, a rule that courts have interpreted to mean the maximization of share value, and thus profits. Corporate directors are prohibited by corporate law from sacrificing profits to serve some other interest, including such areas as environmental protection, or the improvement of the welfare of the community. For example, when Henry Ford cut dividends and reduced car prices in order to increase the number of people who could afford to buy his cars, his brother-in-law, Mr. Dodge, a shareholder, sued him for having harmed profitability: Dodge v. Ford Motor Company, 170 N.W 688 (Mich.S.C. 1919). Mr. Dodge succeeded and went on to form his own car company with the proceeds of the suit. Modern corporate law is settled and clear that corporate directors are only allowed to act in the best interests of the corporation, and that this means maximization of profits (see for example J.A. VanDuzer The Law of Partnerships and Corporations (Irwin Law: 2003, Toronto) at pp. 271-2). Corporations may be able to make charitable contributions to society, but only where this will enable profit maximization (e.g. if the public relations value of the contribution would boost profits more than any other potential use of the funds).

Re:money is money...

[91degrees]

They're obligated to work for shareholder benefit. This does not always mean maximising profits. Many companies have explicit ethical policies. Many Investors invest based on these concerns.

too bad that's not true

[Anonymous Coward]

Historically, until recently, stockholder profits come SECONDARY to being of the public good, and was like that from the beginning. That's something the blood profits and no ethics at all corporate shills (and government regulators) always seem to forget about. You are ALLOWED a corporate charter not only for your stinking profits, but only so long as you and your pirate gang are OF THE PUBLIC GOOD. You have no "right" to just "incorporate" then be a jerk off to everyone around you just to make money. We need to return to that. Screw your blood profits and pain profits.

It just so happens there's a movie making a big splash in europe now, it's about Walmart -"Wal Mart: The High Cost of Low Price", but you can apply it to just about any western corporation "doing business" in the autocratic hellhole that goes by the name of the "Peoples Republic of China". Those fascist leaders there (they ARE fascist, the shoe fits) share a host of similarities with western fascist corporations and political and business "leaders", that's why they get along so good. Swine.

Further reference, take your pick. Learn some history you disgusting greed defenders.

http://www.google.com/search?q=corporations%2C+cha rter%2C+history%2C+public+interest&start=0&start=0 &ie=utf-8&oe=utf-8 [google.com]
http://www.google.com/search?q=Laogai&start=0&star t=0&ie=utf-8&oe=utf-8 [google.com]

Re:Nobody complains about censoring Nazis

[lrhegeba]

"Mein Kampf" is not illegal in Germany and google isn't hiding it from you - see http://www.dhd24.com/extra/kaufen-verkaufen/Mein-K ampf.html [dhd24.com] where you can buy it.

google was hiding a certain version of "Mein Kampf" which was offered by canadian nazi Garry Lauck on his website. But the copyright is with the Bavarian State in Germany and Lauck was offering an "illegal reproduction". So the copyright owner went to court and google had to take this out of their search results. The bavarian government only allows reprints of "Mein Kampf" which are accompanied by critical annotations, at least in Germany. But historic editions from the 40s can be sold as any other books. so no censorship there.

Re:America is not a democracy itself

[RussP]

America is not a pure democracy. It is a Constitutional Republic with democratic elections. A pure democracy would allow majorities to trample the rights of minorities, which is not a good idea.

And, yes, the founders wanted to protect property rights. That's an important part of individual freedom. In China, the communist government does not recognize property rights. Leave it to someone at slashdot to conflate the two.

Real facts about China work

[mfriedma]

I live and work in China and sell software to Chinese factories so I actually know a bit about this and your claims are just inane.

1. Workers in China don't starve. I've eaten breafast, lunch, and dinner factory canteens more times than I can count, sometimes getting the manager plate, sometimes (when an extra manager meal wasn't ordered for me) getting the worker plate. It's a bit bland and boring (necessary when you're cooking one dish for several thousand people) but it's filling and nutritious and better than what most workers would get at home. Hungry workers (never mind starving ones) don't do good work.
   

2. Pretty much no one gets $.13 per hour. That's RMB 1/hour or 200/month. That's what the poorest farmers in China make but I've never heard of anyone in a factory at that kind of wage - for that money people would stay home on the farm. The lowest wage for a totally unskilled and not very smart worker with no experience is about three times that. A skilled sewing machine operator will make 5 to 8 times that. Higher end workers (ie. trainers, team leaders, etc.) will make 7 to 10 times that. FYI, a fresh grad software engineer also makes about 10 times that.

   In addition, the factory will almost always provide a dormitory and three meals per day.
   

3. No one is forced to take these jobs. Chinese beg borrow and steal to get the money to go to industrial areas to try to get these kinds of jobs. That's because the alternatives are far worse.
   

   Chinese farms are poor, the working conditions are brutal and dangerous (even in the US farming is dangerous), and there is no opportunity for enhancement.
   

   Prostitution is always an option for attractive girls, but just like in the US most prefer to find other work.

So yes, there is a huge difference between censoring the Internet and giving people jobs they are glad to have.