Merger Mania

From computer giants to the world's biggest oil companies, merger has become the favorite sport of the world's corporate and financial elites. Whether it's the information age giants like Netscape and America Online, or the industrial age behemoths like Exxon and Mobil, those who run the economy agree on one thing—bigger is better. What's wrong with this picture?

With Exxon's purchase of Mobil, creating a new company that is the biggest and richest in the world, the historic antitrust victory of 1911 that broke up the oil empire of John D. Rockefeller has been reversed.

Costs must be cut, say the new company's executives. What's the easiest way to do that? Cut more jobs. An estimated 10,000 workers will be sacrificed as a result of the Exxon-Mobil merger. But those workers are not alone in facing the prospect of losing their livelihoods. The list of companies whose reorganizations and cost cutting are causing layoffs is long. Boeing is cutting 48,000 jobs due to the Asian financial crisis. And who precipitated that? It certainly wasn't the workers who are losing their jobs, but financial investors whose greed got a little ahead of their common sense.

Let's take a look at some of the recurring facts of our economic life: Mergers are in, with new consolidations occurring every day. The new super-companies are slashing costs, with job layoffs the favorite tactic. Virtually every time jobs are cut, the value of the companies goes up—and the salaries of top executives are likely to go up as well.

Now consider the moral dimension of these economic realities. I know the stock market is not supposed to be judged by moral standards. The market is the great given—it's just what is. But do we really want to live that way? Few things impact our lives more than the economy—just ask all those folks who are losing their jobs.