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Re: Good business vs. good investment


Regarding Jorge Raygoza's comments on TELMEX and the difference
between a "good business" and a "good investment":  I attended a
seminar in Mexico City in May 1994 in which John Atterbury, President
of Southwestern Bell operations in Mexico, spoke.  His presentation
regarding the privatization of Mexican telephone service was very
informative and, in my opinion, showed more sensitivity to
consumer-service issues, labor relations, etc. in Mexico than one
might normally expect from a "gringo" capitalist.  However, I was
struck by his answer to a rhetorical question, i.e., "If we had it to
do over again, would Southwestern Bell go into Mexico?"  His response
to his own query was a resounding "yes."  But what surprised me about
his answer (no doubt a reflection of my own naive, old-line liberal
idealism) was the reason for his response--it had nothing to do with
improved working conditions, better telephone service, reduced
corruption, improved quality of life for the Mexican people, or even
more efficient and productive business practices in Mexico.  He based
his "bottom-line" evaluation of SW Bell's experience solely on
short-term return on investment (which at that time was extremely
favorable)--not on what had been done for the people of Mexico.  Does
the "invisible hand" work in Mexico?  In pursuing their own corporate
"greed," do American companies coincidentally (even unwittingly)
improve the quality of life of the Mexican people? I personally doubt
it.  And I'm in good company here:  even Adam Smith had doubts about
unregulated capitalism.  But Smith felt that there were common bonds
between capitalists, consumers, and workers based on geographical
proximity, a shared language, and common customs that would temper
greed.  How do such moderating factors operate within the context of
a multinational corporation?  Where is its loyalty: to the people of
its home country (whatever that might be) or to the "bottom line?" 
I suspect that in many cases it is the latter.



Atentamente,

Jim Gramann (in Aggieland)
Dept. of Recreation, Park and Tourism Sciences
Texas A&M University
jgramann@rpts.tamu.edu - e-mail
(409) 845-4920 - phone
(409) 845-0446 - fax