The Commercial Determinants of Three Contemporary National Crises: How Corporate Practices Intersect With the COVID‐19 Pandemic, Economic Downturn, and Racial Inequity – MAANI – – The Milbank Quarterly

The United States finds itself amid three concurrent and interrelated crises. First, at the time of writing, the United States has reported more than 27 million confirmed COVID‐19 cases and more than 500,000 Americans have lost their lives.¹ Second, in part as a consequence of the physical distancing measures enacted to slow the spread of the pandemic, the United States has faced record unemployment, a rise in the number of Americans unable to afford medical insurance, an end to federal support measures, and an uncertain economic outlook. According to the US Department of Labor, more than 50 million Americans have filed for unemployment benefits since the COVID‐19 pandemic started; more than 10 million Americans remain on state unemployment benefits.² Third, the country is still contending with how to respond to mass civil protests in 2020 unlike any seen in half a century, triggered by the killing of George Floyd at the hands of police in Minneapolis. This civil unrest reflects centuries of structural racism and has brought unprecedented attention to this problem.^3-5

In each of these three concurrent crises, the pandemic, ongoing large‐scale unemployment, and civil protests,⁶ the US federal response has been criticized as being delayed and poorly coordinated, involving downplaying the threat posed by the pandemic and building on longer‐term failures by previous administrations to make investments in public goods that may have facilitated a more robust and effective collective response.

By contrast, it would appear that some of the largest entities in corporate America have responded more rapidly to each of the ongoing crises than the federal government has. A number of large companies have engaged in activities that responded to needs emerging from the pandemic, such as producing hand sanitizer,⁷ setting up COVID‐19 testing sites,⁸ and partnering on contact tracing.⁹ Most notably, the pharmaceutical sector has contributed to an unexpectedly and unquestionably successful vaccine development process for SARS‐CoV‐2, with almost 200 million shots already distributed.¹⁰

In response to the economic downturn, many companies have been adapting their business practices to supply essential services in a time of great disruption. For example, food and other essential businesses have largely kept supply chains for essential goods open,¹¹ through extending working hours, hiring additional staff, and implementing new means of operating. Several large employers have responded to changing circumstance, aiming to keep as many employees working as possible, often through an embrace of remote working and implementing more permanent shifts into patterns of working.¹²

In response to the global protests around structural racism that erupted in 2020, a number of large companies, including Nike, Reebok, Twitter, and Citigroup, have publicly aligned themselves with the Black Lives Matter movement,¹³ including committing more than a billion dollars in pledged donations.¹⁴

In a moment of great national turmoil, when government seems not up to the task, private sector actors have appeared, by contrast, to be better positioned to address the three crises of the moment. This plays neatly into a private sector–centric narrative, and there is little question that much good has come from elements of the private sector during this time.

It is certainly true that these visible private sector efforts have contributed to helping populations deal with the consequences of an unprecedented global pandemic. But, given the emerging evidence about the populations at risk for COVID‐19, and why that risk exists to begin with, it is legitimate to ask: in the case of COVID‐19, what was the contribution of the private sector in creating the conditions that made us vulnerable to the pandemic and its consequences to begin with? And, by extension, how can private sector actions align with a durable set of solutions to the crises that characterize this moment?

We already know that large, consolidated corporate entities, particularly those that manufacture harmful products, can have profound effects on population health.^15-17 The most obvious way in which this manifests is through “market activity,” that is, the direct consequences of manufacturing and marketing particular products. For example, it is easy to recognize that marketing of cigarettes harms health. However, such actors also influence population health through a range of “nonmarket” activities that shape the political, social, and cultural environments that they operate in.¹⁸ Examples of this activity include political donations, lobbying, corporate social responsibility initiatives, and legal activity. These activities, often seen as intrinsic to corporate practice, support and protect commercial interests, yet do not necessarily promote population health or structures of governance. Bearing this in mind, it is worth understanding how such activities, both market and nonmarket, have contributed to the vulnerability of the United States to the three crises we now face.

Corporate Practices and COVID‐19

Pre‐pandemic, the United States was characterized by poor underlying health, as evidenced by a several years’ decline in life expectancy¹⁹ as well as a high obesity rate, a high rate of avoidable mortality,²⁰ and more years of life lost²¹ compared to other high‐income countries. This includes the health conditions that are linked to more severe COVID‐19, including cardiovascular disease, diabetes, and obesity.²² These conditions were in turn driven by the market activities of corporate actors,²³ specifically via the production and sophisticated marketing of harmful products, which damage health and widen existing inequality.¹⁶

However, nonmarket activities have also influenced the response to COVID‐19. One reason that policy measures to protect population health by reducing consumption levels, such as sugar taxes, remain elusive in the United States, in spite of a robust and growing evidence base about the potential benefit of such policies for health,²⁴ is the nonmarket activities of transnational corporations.²³ These include supplanting regulation with ineffective voluntary initiatives,^{25, 26} influencing marketing regulations,²⁷ lobbying Congress and other policymakers,²⁸ influencing trade agreements, redefining “sound science” to exclude evidence harmful to business interests,^{29, 30} disseminating misinformation to generate doubt regarding product harms,^{31, 32} and attempting to influence public debate away from evidence‐informed regulation.^33-35 By way of example in the US context, an analysis of emails obtained by freedom of information request showed that Coca‐Cola met regularly with staff tasked with obesity at the Centers for Disease Control and Prevention (CDC).³⁶ This included sharing Coca‐Cola‐funded research that placed the emphasis on physical activity over diet as the cause of obesity, deflecting from the role of sugar taxes as an intervention. Executives also asked their CDC contact for advice on how to lobby the World Health Organization to stop advocating for sugar taxes, as, in their own words, this “global threat to our business is serious.”³⁶

The CDC is one of several US public institutions in which there has been a pattern of regulatory rollbacks and the installation of leaders with backgrounds in lobbying and industry advocacy,³⁷ rather than public service or technical expertise. Promoting deregulation might seem to make good business sense from the perspective of a single, powerful commercial actor focusing primarily on preventing litigation, advancing brand image, and boosting profitability;³⁸ however, these come at the expense of public goods, and the sum of such activities, occurring across a range of powerful industrial sectors, has had a negative cumulative effect on essential public institutions,³⁹ scientific credibility,⁴⁰ and the quality of public discourse^{41, 42} that have ill‐served the United States both before and during the pandemic. Such corporate activities, driven by pursuit of short‐term profit, may well undermine longer‐term environmental and economic stability, and inevitably, the health of populations.^43-45

Indeed, such efforts appear to be intensifying. A report by the Center for Public Integrity found that since the national emergency declaration in March 2020, the Trump administration had already signed off or was reviewing 247 regulatory actions, of which only 33 were classified as pandemic related.⁴⁶ These include halting enforcement of environmental pollution regulations for extractive industries and weakening emissions standards, which can have profound consequences for population health.⁴⁷ Conversely, effective enforcement of such regulations may confer great benefit to population health and environmental sustainability. Yet, on May 19, 2020, an Executive Order was announced requiring federal agencies to address the economic crisis by “rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery.” More recently, a Lancet Commission on public policy and health in the Trump era concluded that damaging trends in privatization of government programs and disinvestment in public goods accelerated during the last administration.⁴⁸

Corporate Practices and the Consequences of Economic Downturn

The economic downturn that followed COVID‐19 has led to the loss of millions of jobs, disproportionately among Americans of color. Although large commercial operators are an essential source of jobs, they also have an interest in maintaining a steady supply of lower‐wage workers and often engage in nonmarket activity to preserve access to such a workforce. Federal social protections in the United States in the form of minimum wage, paid leave, and assistance with childcare were all significantly less developed compared with peer countries pre‐COVID‐19. Pre‐pandemic, 40% of Americans were already struggling to meet monthly bills,⁴⁹ and therefore were at greater risk of any economic disruption.

For example, while restaurant chains have been praised for innovating during the pandemic by shifting to new patterns of business, the National Restaurant Association had contributed to worker vulnerability to economic downturns, having consistently opposed raising the minimum wage from the current $7.25, which has remained unchanged since 2009.⁵⁰

Safe return to work, and associated economic security, has also been made harder due to rollbacks to regulations concerning workplace safety that arise from the nonmarket activities of large commercial actors. Before the pandemic, US workers, particularly essential workers in agriculture, transportation, and water supply, had double the fatality rate of those in the European Union.⁵¹ In spite of the importance of workplace safety inspections to reduce COVID‐19 infection risk, the US Occupational Safety and Health Administration recently recorded the lowest level of occupational safety inspectors in 45 years.⁵² The use of paid advertisements in leading newspapers by meat manufacturers, in an effort to force the reopening of meat‐processing plants by overstating the risk to the US food supply, was reminiscent of similar efforts by the fossil fuel industry to manipulate public opinion on the evidence base regarding fossil fuels and climate change,⁴² of the tobacco industry to dispute the health benefits of regulation,⁵³ and of the alcohol industry using “dark nudges” (nudges that are not in consumers health interests) to mislead the public on alcohol harms.⁵⁴

Corporate Practices and Racial Disparities

In the context of structural racism, we must once again read the endorsement of Black Lives Matter by prominent brands through the lens of the contributions of some large commercial operators to exacerbating racial inequity in the longer term.

Considering the distribution of assets, the United States is characterized by significant, persistent racial disparities in household wealth (see Figure 1), in which median Black and Latinx households own 2% and 4%, respectively, of the assets of a median white family.⁵⁵

A prominent way in which some large entities within the private sector has exacerbated these disparities is through “predatory inclusion,” defined as a process by which a marginalized group is provided access to previously unavailable goods, services, or opportunities, but under conditions that jeopardize the benefits associated with such access.⁵⁶ By way of example, predatory loans, particularly in the context of the subprime mortgage industry, have disproportionately disadvantaged Americans of color, preventing home ownership from serving as a means of wealth accumulation.⁵⁶ Prominent US banks, currently at the forefront of facilitating small business loans as part of the COVID‐19 relief package, and having pledged large amounts of funds toward ending racial inequity, had previously agreed to settlements worth hundreds of millions of dollars with the Justice Department for their role in subprime mortgage deals, loan overcharging, and other breaches that disproportionately affected people of color.⁵⁷

Predatory practices have also exacerbated racial disparities in health. Cigarette brands such as Kool and Salem were developed specifically to target African American segments of the market, and African Americans continue to be disproportionately targeted by tobacco retail marketing compared to other racial groups,⁵⁸ even as British American Tobacco attempted to gain positive press by linking itself to the development of a COVID‐19 vaccine. Similar disproportionate exposure to marketing has been reported for African American children in the context of targeted junk food advertising on TV.^{59, 60} The infant formula industry has previously targeted African American women,⁶¹ a group that, like other minority groups such as Hispanic and Asian women, use infant formula at disproportionally higher rates.⁶² The health and equity impacts of low rates of breastfeeding are well established, yet the Trump administration refused to sign the WHO breastfeeding resolution, a stance more favorable to industry, as opposed to health, interests.⁶³

In summary, to understand the interconnecting US vulnerability to economic crises, our poor health, the disinvestment in public goods and regulatory bodies with which to mitigate the worst effects of COVID‐19, and the nature of racial disparities that predate and were exacerbated by the effects of both of these crises, we must acknowledge the longer‐term role of corporate activity on US institutions, democratic processes, and decision making. Such an understanding should be viewed as foundational to efforts to “build back better.”

A Way Forward

It seems clear, then, that corporate activity has indeed contributed to both the crises we currently find ourselves in and the inequitable distribution of resultant harms. With that in mind, how do we chart a way forward? We propose three areas of focus, reflecting on the crises and the incentive structures we face.

First, our efforts to build a healthier and stronger United States must be directed at the upstream drivers of inequity from both government policy and the private sector. This will require an honest reexamination of the consequences of “upstream” decisions, such as worker safety and rights, environmental protections, campaign finance reform, taxation, or marketing regulations, on health equity. In doing so, we must build awareness of the implications these decisions have for people’s lived experience and their health. Both during COVID‐19 and as we look to the challenges of the future, we cannot afford for corporate social responsibility to be used as a veil that distracts from the role of harmful‐product manufacturers in exacerbating health harms.⁶⁴ The status quo is harmful for population health, and it risks undermining any benefits that might be gained from corporate social responsibility efforts on the part of commercial entities for whom such conflicts of interest do not exist.

Second, there must be a renewed focus on developing sound processes of public sector decision‐making and governance. As we move forward, to what extent will our political decisions be driven by improving health, as opposed to the influence of specific commercial interests? How can all decisions incorporate health as a fundamental driver of resilience to COVID‐19 and as a foundation for prosperity? Are there ways to ensure that private sector influence in such decisions is constrained to those areas in which conflicts of interest don’t arise? A recent scoping review indicated specific mechanisms for addressing undue corporate influence on health, such as explicit inclusion of such influences in national and subnational public health strategy, limitations on campaign contributions, robust policies related to conflicts of interest and transparency requirements for government‐industry interactions, stricter limits for “revolving door” practices, stronger definitions and standards for lobbying, and enforcement of lobbying registers.⁶⁵ Such changes would help ensure that decision‐making—particularly at times of great national crisis and when interaction with commercial actors is necessary and beneficial—is transparent, democratic, and in the public interest.

There is a growing recognition of the power imbalances and risks of industry influence when a multi‐stakeholder approach to policymaking is used. While a particular industry may be consulted in some contexts, the commercial interests they hold in certain health‐focused policies not being implemented may preclude their involvement.⁶⁵ In matters of regulation and public health, commercial organizations have no particular competence but can have major conflicts of interest when they profit from the conditions that increase public health risk. Several tools to help assess such conflicts of interest now exist, yet they remain underutilized.⁶⁶ In order to realize the health benefits of partnership, the activities of those corporate entities who create and drive harmful consumption practices and norms, as well as their ability to manipulate science, regulatory policy, and the public conversation, have to be denormalized, if any effort to build a healthier post‐COVID world is to be realized.

Third, there is a role for civil society in general and academia in particular to find constructive ways to hold policymakers and the commercial sector to account through greater accountability, monitoring, and evaluation. Such evaluation should bring a sharper lens both to the distal consequences of regulatory changes and commercial lobbying, and the extent to which corporate social responsibility activities impact population health and well‐being. In an era of misinformation and confusion, it is more important than ever that societies plan the future clear‐minded of their challenges and priorities and the causes that underly them. This, perhaps, is where academia is best placed to respond, since it is the duty of science to bear witness to the forces that shape our world, the natural and the human‐made, in the interest of the public good.

In the wake of COVID‐19, there has been talk of the need to focus on marginalized communities, along with investing in and reclaiming public goods such as education, physical infrastructures, and environmental protection. Indeed, these are among the key stated priorities of the Biden administration. Yet, for such a plan to succeed where others have failed, we argue it must examine the upstream factors that led us here; strengthen and protect the democratic processes in which we make decisions, based on a sound understanding of those factors; and provide the tools with which to honestly and transparently interrogate future partnerships and progress.