In A Brief History of Corporate Social Responsibility—and Why It Must Stop, Kimberlee Josephson writes:
CSR (Corporate Social Responsibility) gained notoriety with Howard R. Bowen’s 1953 publication Social Responsibilities of the Businessman, and although times have since changed and CSR has taken on various forms, a constant question remains unchanged.
What is the role of business in society?
Some claim that a greater focus on corporate social performance over corporate financial performance is now warranted, while others adhere to a more classical viewpoint, siding with Theodore Levitt’s assertion that business should simply aim to achieve material gain while operating in good faith. Levitt, a German-American economist and professor at the Harvard Business School, spoke of “The Dangers of Social Responsibility” in a 1958 Harvard Business Review article. He posited that profit maximization over the long term should be the primary goal of business as this would have a spillover effect improving the wellbeing of society.
Not bad, so far. But ethics is the subject that continues to trip up the pro-Capitalists.
The propensity to exchange to benefit oneself as a means for societal advancement was most notably espoused in Adam Smith’s 1776 magnum opus, The Wealth of Nations. Milton Friedman later drove this message home in his seminal essay in the New York Times Magazine about how the “The Social Responsibility of Business is to Increase its Profits.”
The collectivist premise that the good of society is what justifies profit-seeking corporations is a fallacy that has deep roots. And it is deeply destructive to Capitalism. To "exchange"--i.e.,trade--to "benefit oneself" is not a "propensity." It is a requirement of individual survival and flourishing. It follows that self-benefit is not a means to "Societal advancement." It is a means to the personal pursuit of happiness. “Society” benefits, for sure, but only as a consequence of the successful achievement of personal happiness and flourishing.
Yet, the prioritization of self-gain has proven to be a hard pill to swallow for a culture that seeks emotional fulfillment via altruism. As such, businesses have not only been encouraged to engage in CSR, but also to harness it and pursue a higher calling.
Unlike the stages of the CSR Pyramid, which tended to be industry oriented, firms stretching beyond their domain of competence to prove themselves as worthy contributors to society at large (rather than streamlining efforts toward core stakeholders) is disconcerting for shareholders and distracting for budding entrepreneurs.
And well it should be! The creation of value for consumers and jobs for employees is precisely the act that makes business “worthy contributors to society.” There is no “at large” beyond which business owes some benefit, other than to respect the rights of others.
The spearheading of virtuous ventures and advocacy advertising show no sign of slowing down—and it won’t, until social pressure shifts back to value rather than virtue.
There's so much wrong here. CSR can't stop when even opponents of CSR keep giving altruism the banner of virtue, while separating the pursuit of value from virtue. How can "social pressure" even begin to "shift back" to value when even the champions of business are stuck on altruism as virtue? The young champion of business Kim Josephson once again proves Why Capitalism Needs a Moral Sanction. And altruism can only be overcome by first explaining the real nature of altruism and then adopting a spirited defense of altruism’s antipode, rational selfishness.
Related Reading:
QUORA *: ‘Is Ayn Rand wrong about altruism?’
On the Purpose of a Corporation by the Business Roundtable, PART 1
On the Purpose of a Corporation by the Business Roundtable, PART 2
Why businesspeople need moral principles--Jaana Woiceshyn
In Defense of the Corporation—Robert Hessen: This book was first published in 1979 to defend “the right of the corporation to exist and function freely.” Hessen’s goal was to counter Ralph Nader’s argument that corporations are “creatures of the state.” The book is relevant today because Nader’s call for federal chartering of corporations is the precursor to Elizabeth Warren’s neo-fascist "Accountable Capitalism Act."
The Capitalist Manifesto--Andrew Bernstein
Elizabeth Warren wants to weaponize and federalize corporations for social justice activism--Mary Chastain
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