Socially responsible corporations
The Economist argues that 'Corporate Social Responsibility', and advocates of it, have based it on a 'dangerously faulty' view of the capitalist system. This is, 'the premise that unadorned capitalism fails to serve the public interest' and thus firms need to thnk of other 'stakeholders', in order to pay their debts to society.The Economist's distate for this is not hard to predict. It says that for selfish reasons all companies will anyway think of other stakeholders, such as long-term relationships with employees, suppliers and customers. Why? Because it makes good business sense, and as all transactions are voluntary, it ensures everyone benefits. Workers only work because they are paid, suppliers only supply because they are paid, etc.
In conclusion, Cs should leave the SRs to governments, and get on with maximising profits for shareholders.
It's a view I'm broadly in agreement with. But there appears to be a fault in The Economist's logic. For if firm do not need to think of CSR because their transactions, which must be designed to maximise profits, already perform a social good, then the same surely holds of firms' decisions to 'pay elaborate obseciance to the principles of CSR'. Why are they doing it? Presumably because it makes good business sense. No-one is making them do it, after all.
It could be said that this argument implies corporations can never make mistakes, and no-one, not even The Economist, can point out the error of their ways. But this appears to be The Economist's argument with respect to corporation's treatment of employeees, its customers, its suppliers.
posted by Matthew @ 1/21/2005 08:54:00 PM
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