What have the corporates ever done for Europe?

Published in Business Spectator (Melbourne), 18 April 2013

As a great Monty Python fan, one of my favourite scenes is from their movie Life of Brian. As a group of Judean conspirators against the Roman occupation gather, the rhetorical question is asked what those awful Romans had ever done for them.

As it turns out, very little – apart from providing Judea with sanitation, medicine, education, wine, public order, irrigation, roads, a fresh water system, public health and peace. In their hatred for everything Roman, the activists of the ‘People’s Front of Judea’ (not to be confused of course with the dreaded ‘Judean People Front’) cannot appreciate anything positive provided by their despised occupiers.

This famous scene somehow came to mind when reading the latest Eurobarometer survey. For many years, the European Union has been commissioning opinion polls in its member states on a wide range of topics. The most recent publication deals with European attitudes towards business.

In the 27 member states of the European Union as well as in Croatia, Israel, Turkey, Brazil, the United States, China and India, the public was surveyed to see what it thought of companies. A total of 32,000 respondents were interviewed. The results have a bit of a Pythonesque flavour to them.

For all its current monetary and economic problems, Europe is still home to some of the world’s greatest companies. Whether it is corporate giants such as Volkswagen, GlaxoSmithKline, Telefonica, BP, SAP, Michelin or Danone, or the many medium sized businesses that form the backbone of Europe’s economy, there are thousands and thousands of successful companies across the continent.

They are not only producing great products and providing great services. These businesses are also big taxpayers; employ millions of Europeans; and their research and development is laying the foundation for future economic growth. And, of course, they are profitable businesses providing good returns to their investors. In other words, they are creating both wealth and value.

All in all, there should be enough reasons for Europeans not only to feel positive about their businesses but maybe even a little bit proud of them. But instead, as the Eurobarometer survey shows, a large proportion of Europeans are actually asking themselves ‘What have companies ever done for us?’

Asked about what they felt companies’ influence on society was, only a narrow majority of 52 per cent believed it was rather positive. Moreover, 41 per cent answered it was negative while 7 per cent did not know. Scandinavian countries tended to view companies in a more favourable light, whereas in Italy, Greece and Slovenia only about a third of all respondents agreed with this proposition.

The picture gets even more interesting when Europe’s results are compared globally. The overall influence of companies on society was regarded more positively in every other country represented in the survey. Total positive responses were 56 percent in Turkey, 59 percent in China, 60 percent in the US, 73 percent in India and 79 percent in Brazil.

Perhaps even more tellingly, Europeans mainly valued companies for job creation. This was identified by 57 percent as one of the most positive contributions companies make to society. In contrast, a mere 15 percent mentioned ‘Providing a return to investors’ as one of the ways in which companies achieve something positive. In India, the profit motive was more highly regarded: 35 percent of Indians saw profits as a good thing.

Turning to the negative effects of businesses, the Europeans were almost equally concerned about corruption, job losses, and environmental side effects. Meanwhile, in emerging economies, the focus was predominantly on pollution.

If one were to caricature Europe’s attitude towards business, it would be like this: In Europe, companies are more or less accepted as long as they create jobs, never fire anyone, and don’t affect the environment. That they exist because investors want to make a profit is grudgingly accepted. However, realising profits is not really thought to be of much value to society.

If they could get away with it, the Europeans would be content with having companies that only exist for the purpose of keeping people in employment and paying taxes, without trying to make any money for their owners.

Or to put it more bluntly still: Europeans tolerate private enterprise; but they don’t value it. Once upon a time, Europe was the birthplace of the Industrial Revolution, the inventor of the public company, and home to an entrepreneurial society. Not anymore. Nowadays, Europeans view their private companies in the same way they view the state: as a provider of public goods.

This European perspective on capitalism is not only bizarre. It is also dangerous. For why would any company really want to be at home in a place that does not understand, let alone appreciate its existence?

If Europeans are now so unenthusiastic about capitalism; if they are so suspicious of the profit motive; and if they suspect evil behind any kind of corporate activity, then in a globalised world companies could just draw their own conclusions – and get out of Europe. Indeed, why stay if public attitudes towards business are so much more positive in emerging markets? Why not relocate to India, China or Brazil where the public actually values businesses for being businesses?

As the Eurobarometer survey shows, Europe can no longer claim to be open to the idea of making money for making money’s sake. Europeans don’t understand the workings of the market. They have no idea about the factors driving companies. They don’t appreciate the role of business in society.

Instead, the Europeans’ understanding of the economy could be summed up in in Ronald Reagan’s famous quip: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Despite having some of the world’s greatest companies, Europeans still wonder what these have ever done for them. They will find out the answer the day that some of these despised corporates decide to get out of anti-corporate Europe.