Opinion Column: LOYALTY

By Isaac Cohen

The economist Albert O. Hirschman, almost half a century ago, published a book titled Exit, Voice and Loyalty (Harvard University Press, 1970), where he examined the responses to decline and deterioration in organizations. Applied to consumers the alternatives are: exit, to stop buying a product; voice, to protest against the sale of a defective product; and loyalty, to keep buying a product, despite its defects. These alternatives are also valid to describe responses to the performance of different organizations.

       Until now, markets and corporations appear indifferent to the political difficulties confronted by the new administration in Washington to deliver on some of its campaign promises. For instance, so far this year, stock indexes are up, 9% t by the S&P 500 and 15% by the Nasdaq Composite. Bond yields have fallen, pushing down borrowing costs and even emerging market stocks, bonds and currencies have benefitted.

         In these favorable conditions, the Growth Agenda of the Business Roundtable (https://businessroundtable.org/growth), which includes the chief executives of the major corporations, supports the presidential agenda of lower taxes, less regulation and more infrastructure spending. However, dissent has appeared on the issue of climate change. Unsuccessfully, for example, thirty major corporations publicly petitioned President Donald Trump not to leave the Paris climate change agreement.   

 *International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC Washington.

Crédito: Pixabay.com