After the latest banking crisis, an old question has resurfaced: What should corporate executives care about, people or profits?
Hard-right Republicans contend that it was “woke” investment strategies of liberal executives—who cared about the “ESG” (Environmental, Social, and Governance) credentials of target companies—that led to the collapse of Silicon Valley Bank. Their position harkens to a 1970 doctrine of Chicago School economist Milton Friedman, who chastised proponents of “social responsibility” in corporate management for “preaching pure and unadulterated socialism.” He famously advised CEOs to scrap high-minded attempts to improve the world through business and return to their primary goal of increasing profits for their shareholders.
A worthy target for Friedman might have included the enigmatic businessman, Eli M. Black.
In that same year, 1970, Black, a former rabbi, became the new “banana king” when he acquired the hemisphere’s most notorious food company, United Fruit, known as “el pulpo” (the octopus) for its invasive business practices across Latin America.
Black saw value in United Fruit’s famous brand, “Chiquita,” and embraced the opportunity to associate it with good causes, including the humane treatment of farm workers. As he wrote soon after acquiring United Fruit, “Socially conscious programs, designed to improve the quality of living of employees, are indeed the legitimate concern of business.” United Fruit’s business included Inter Harvest, which produced lettuce in California, where Cesar Chavez and the United Farm Workers had just scored a significant victory by signing contracts with grape growers after five years of protest.
Black’s first act as CEO signaled a rejection of Friedman’s doctrine. At Inter Harvest, he went against fellow growers and the advice of his executive team by signing contracts with the United Farm Workers. Black chose this course to avoid a boycott of his “Chiquita” bananas but also to work with Chavez, whom he regarded as a potential business partner. Both men believed that a conscientious public, now aware of the exploitation of farm workers, would choose Chiquita brand lettuce carrying the union’s black eagle label over competitors that did not. In time, the CEO came to see Chavez as a friend. Black invited the labor leader to private Passover seders at his home in Westport, Connecticut, and business conferences at Harvard University.
Black doubled down on his strategy of “social responsibility” in his remaking of United Fruit in Honduras, where the company was the country’s largest employer. There, he collaborated with Oscar Gale Varela, the venerable leader of the banana workers union, SITRATERCO.