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December 14, 2006

Overcoming "Corporate Social Irresponsibility"

From Democracy: A Journal of Ideas, why corporate social responsibility campaigns have failed, and the effect these programs have had in delaying more substantive reform efforts.

I don't agree with each and every goal of corporate social responsibility (CSR) advocates, but I do agree with the conclusion that it is wishful thinking to believe that firms will take individual voluntary actions to demonstrate social responsibility when those actions reduce profit. Thus, I also agree with the conclusion that the correction of market failures and the pursuit of social justice requires government intervention, pressure from interest groups is not enough.

The article distinguishes between two types of actions that firms can take in pursuit of corporate responsibility, strategic and non-strategic. Simply put, strategic actions increase profit (e.g. attract a customer base that prefers green policies so that the increase in demand more than compensates for the cost of the environmentally friendly production techniques), while non-strategic actions reduce profit. If a factory reduces carbon emissions on its own out of concern for the environment even though its competitors are not required to do so, and when it cannot expect an increase in demand from consumers or any other benefit sufficient to cover the costs of reducing emissions, then that would be a non-strategic action.

While the market ought to take care of strategic actions on its own since it is in the firm's best interest to put them in place, government action is needed to overcome non-strategic market failures. And in both cases the firm's incentive will be to create the illusion of doing as much as possible, while in fact doing as little as it can so as to maximize profit:

Corporate Social Irresponsibility, by Aaron Chatterji and Siona Listokin, Democracy Journal: After years spent fruitlessly attempting to organize Wal-Mart, unions and other liberal activist groups have taken a new tack: a public campaign to force the Bentonville behemoth to become more socially responsible. In 2005, Andrew Stern ... created Wal-Mart Watch, with an annual budget of $5 million, devoted exclusively to making Wal-Mart "a better employer, neighbor, and corporate citizen." At almost the exact same time, a parallel group called Wake Up Wal-Mart launched, with much the same goal.

In the nearly two years since, both Wal-Mart and its new opponents have spent millions dueling in the public and legislative spheres. The labor-backed groups have managed to stop Wal-Mart from opening stores in a number of communities and won isolated victories in court to force the company to increase benefit expenditures. Yet they have not fundamentally altered Wal-Mart’s behavior: Its wages are unchanged, its benefits are still restrictive, and its workers are still non-unionized. All of which raises an important question: Can progressives really change Wal-Mart–or any other company, for that matter? ...

A generation of activists has been raised on the idea of corporate social responsibility (CSR)–that large corporations can be cajoled into paying employees better, being more environmentally responsible, improving labor conditions in developing countries, retaining more American workers, embracing diversity, and donating money to fix inner-city schools. Where firms cannot be enticed, the strategy goes, they can be bullied. ... In 1999, a series of protests convinced Home Depot to sell more lumber from sustainable logging operations. More recently, campaigns against the fast-food industry have included a full barrage of boycotts, lawsuits, movies, and books to pressure companies like McDonald’s and Wendy’s to stop advertising to children and to serve healthier food.

In pursuit of similar success, enormous resources have been directed away from lobbying for regulatory regimes and toward recruiting powerful corporations into voluntary battle against a variety of injustices. Yet CSR campaigns have had limited success in actually changing corporate behavior in a meaningful way. More often than not, CSR crusades result in companies allocating a relatively small portion of their profits for public affairs advertising, community donations, and token changes...

At the root of the problem is an inconvenient but implacable fact: Corporations care about profits. Corporations will not–and their shareholders do not expect them to–engage in behaviors that do not maximize profit. Indeed, shareholders would punish them if they did. In concept and in practice, therefore, CSR is at best a partial solution to solving social injustices and correcting for market externalities. ... It is time to recognize that most market failures can only be solved by governments and multilateral agreements...

The Origins of Socially Responsible Business

...The modern CSR movement ... did not begin in earnest until the 1990s, the result of a confluence of globalization, neoliberal governments, and opportunistic corporations and nongovernmental organizations (NGOs). As more firms became multinational, national governments were less effective at correcting negative business externalities–a company could always move its operations or headquarters to avoid regulation–and negotiating multi-country agreements proved to be significantly more difficult than domestic bargaining.

Moreover, trade globalization discouraged national governments from insisting on strong, controversial international regulation. Developed nations had much to gain from access to new consumer and labor markets and did not want to jeopardize this access...

In response, pressure groups ... began to shift part of their focus from public regulation via the World Trade Organization (WTO) or multinational binding agreements to private, non-sovereign regulation like codes and standards. Public interest activists and NGOs also capitalized on the technological advances in communication, which eased the spread of information to consumers and helped to create demand-side incentives for private regulation. This shift in focus resulted in an explosion of voluntary codes, business roundtables, and standard-making boards to address issues as diverse as sustainable-lumber harvesting, gay rights in the workplace, the living wage, and diamond-mining in developing nations. By giving corporations a seat at the table and making compliance a voluntary, market-driven norm, pressure groups believed they could reach their goals without controversial regulation and reduce their dependence on national governments. ...

Corporations welcomed this approach and saw a clear advantage to adopting such voluntary codes. Instead of fighting social-movement organizations in shaping legislation, firms could sit down with these groups to create and monitor less-stringent private regulation. ... By the end of the decade, a new kind of relationship between public interest groups and private business had been created. Whereas earlier the two groups frequently stood on opposite sides of regulatory battles, activists and corporations now communicated directly—circumventing government whenever possible–and collaboration was considered an optimal (if not always attained) solution.

Today, the proliferation of responsible investing, voluntary codes, public pressure groups, and corporations with "social values" shows just how dominant CSR has become. And while environmental and human rights issues have been the most prominent focus, the amorphous movement is expanding to include more domestic issues, such as child obesity and middle-class employment benefits. Business schools are creating classes and centers for corporate social responsibility, companies are hiring CSR executives, and new codes are constantly being created in practically every industry. One could be forgiven for thinking that CSR has been a resounding success. The reality, however, is very different.

CSR’s Dubious Achievements

Imagine a world with one voluntary code of conduct governing the operation of apparel factories. Let’s call it the Golden Code of Conduct (GCC). This is a strong code that calls for the provision of a living wage, recognition of unions, and limits on working hours. Now suppose another set of companies who do not want to abide by the code, but still care about consumer perceptions, creates their own code, called the Super Code of Conduct (SCC). Their code lacks many of detailed provisions of the GCC, but it has some vague language about treating workers with respect. Companies must decide which code to adopt, and the SCC is clearly cheaper to institute. For high-minded companies that want to live by the more stringent code, the high costs could make them uncompetitive in supplying retailers. Meanwhile, the benefits are only significant if consumers can tell the difference between the two codes. ... The end result can be a race to the bottom as most companies decide to choose the weak code, which is often a far cry from the progressive ideal.

Reexamining the Nike battle over labor standards in the 1990s–viewed as one of the premier successes of the CSR movement–offers a concrete example of this dilemma. As a result of that mobilization, there are several codes of conduct for apparel factories, including codes created by the Workers’ Rights Consortium (WRC), the Fair Labor Association (FLA), and the Worldwide Responsible Apparel Production (WRAP) accord. The differences between these codes are significant... But do consumers know the difference? Probably not. ... As long as the company can claim that it is complying with some pleasantly named code of conduct, most consumers are likely to be pacified...

Or consider a variant on the CSR model, socially responsible investing, which, despite some favorable publicity, has fared little better than voluntary codes. SRI aims to direct money toward responsible companies and away from those that pollute, treat their employees badly, have poor corporate governance, or operate in "dirty" industries. ... While some SRI advocates appreciate the simple pleasure of not buying shares in the next Enron, many others argue that firms that "do good" will also "do well." Companies that treat their workers better might experience increased productivity, firms that invest in community relations may be buying themselves "reputation insurance" against future scandals, and corporations that invest in clean technologies may be saving themselves fines and expensive upgrades in the future.

But does it really work that way? Over 100 academic studies have examined the relationship between CSR and financial performance, and while most find some link, they come with an important caveat: It is very difficult to know whether CSR causes good financial performance or whether successful companies just have more money to spend on "doing good." It is likewise hard to tell if smart and capable management might be driving both CSR and superior financial performance. ...

When progressives put their trust into CSR-type ratings to identify corporate leaders and laggards, they must be wary of incorrect metrics, greenwashing (the corporate practice of highlighting small environmental improvements and achievements to mask more serious environmental problems), and even simple media hype. ...

Strategic vs. Nonstrategic CSR

...Corporate social responsibility initiatives can be roughly divided into two categories: strategic and nonstrategic CSR. In private management, strategic behavior is the set of actions that promotes long-term profit for the firm given its competition, consumers, suppliers, and market environment. When a company engages in socially conscious activities that improve its bottom line in the short or long run, it is behaving strategically. ...

Strategic CSR is often connected to marketing or branding activities–think of Ben and Jerry’s friendly image and its three-tiered product/economic/social mission statement... In other cases, strategic CSR improves worker productivity, as in the case of some apparel factories that have improved air-quality and lighting. In cases where publicized socially responsible behavior creates a brand niche, everyone wins. The company’s strategic CSR has differentiated itself from competitors, and a social good is created without the need for government intervention.

Still, many other CSR efforts and demands made by activists fall under the category of nonstrategic corporate social responsibility: business behavior that is at direct odds with short- and (reasonably) long-term profit maximization. And good management demands that nonstrategic actions be avoided or run out of the market, regardless of the social good they may produce. When critics ask Wal-Mart to pay their workers more and provide better benefits, they are essentially asking Wal-Mart to make less profit to improve society. ... After all, one of Wal-Mart’s competitive advantages is selling at low prices, and low labor costs are part of what sustains its edge. Pressuring Wal-Mart to weaken its own competitive advantage is likely to be exceedingly difficult...

The prevalence of nonstrategic CSR demands is partly to blame for the meaningless voluntary codes that define the private regulatory sphere. It is hard for a well-managed company to voluntarily agree to nonstrategic behavior, so there is a natural drift to costless standards that do not address the relevant social issue. The upshot is that while progressives might believe that they are improving corporate behavior and advancing social justice, they have in fact left behind a patchwork of confusing codes, voluntary standards, and weak or nonexistent monitoring. Indeed, the abundance of ineffective private regulation even has the potential to "crowd out" the demand for government regulation that could truly bring about the changes progressives seek.

A Better CSR Paradigm

Moving forward, progressives need to return to their roots: For especially large market failures, government action simply may be the only way to comprehensively address the problem. Thus, instead of pressuring the private sector to deliver social justice, progressives should focus their efforts on lobbying for government action to address issues like low wages at home and minimal labor standards in the developing world. ...

The first element of that strategy–to stop most nonstrategic CSR activities–might seem to many activists the equivalent of unilateral disarmament in the war for social justice. But it is in fact a matter of allocating progressives’ efforts more efficiently. Imagine what would happen if those activists who currently spend their time and money railing against Wal-Mart instead directed their complete and undivided attention toward fighting for a higher national minimum wage or national health care. ...

[M]uch of corporate America’s resistance to substantive CSR comes from the fact that their competition will likely avoid making the same costly decision; lobbying for government action that affects all firms equally changes this equation, in some cases turning nonstrategic CSR into strategic CSR. ...

[P]rogressives need to recognize how they have been misguided by the attractive branding of the corporate social responsibility movement into being overly optimistic about its benefits. The challenges created by the global economy will require progressives to be innovative and thoughtful in their policy recommendations. A return to their intellectual roots, coupled with pragmatism ..., is a good place to start.

    Posted by Mark Thoma on Thursday, December 14, 2006 at 03:15 AM in Economics, Market Failure, Policy, Politics 

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    Tracked on December 14, 2006 at 01:13 PM


    Comments

    yartrebo says...

    I certainly agree. Corporations have a legal requirement to maximize profits and certainly have no interest in any social responsibility for its own sake.

    Pushing for such "corporate social responsibility" is both a waste of effort and a whitewash for corporations.

    Posted by: yartrebo | Link to comment | December 14, 2006 at 05:51 AM

    evagrius says...

    What is profit? How long does profit last?

    Is a small profit over a long period of time better than a large profit over a short period of time?

    What I've noticed is that there seems to be a trend towards shorter and shorter "time-frames" to measure profit. Am I correct?

    Is it due to what could be called less "impulse control"?

    Those wishing to have more socially responsible companies should ask these questions from investors and the public. The dialog might be useful.

    Posted by: evagrius | Link to comment | December 14, 2006 at 05:57 AM

    Jonathan Goldberg says...

    "Is a small profit over a long period of time better than a large profit over a short period of time?"

    No. The people who make the decisions are rewarded based on what happens this year, or even this quarter. And the rewards are so large that they make the future irrelevant.

    To say nothing of the prospect of large profits over a long period of time, starting now.

    Posted by: Jonathan Goldberg | Link to comment | December 14, 2006 at 06:38 AM

    evagrius says...

    That's exactly the problem, focusing on the next quarter which of course has to be more than last quarter etc;etc; It's a vicious circle.

    As for profit, has anyone compared the value of the gold extracted from the California mines versus the costs to repair the environmental damage?

    Has anyone compared the value of clear cutting versus the costs in flooding, etc;?

    These are "social costs" being borne by a future society, so they are not taken into account. I know, people have discussed "externalities", ( a wonderful phrase- it's like describing an unwanted relative at a dinner) but these always seem , well, so external that they don't really count.

    Are there any economists who explore such subjects as "internalities" ,so to speak, or are they too fixated by the ever shortening horizon of present profit?

    ( I'm waiting for the day when companies have to report daily profit ).

    Posted by: evagrius | Link to comment | December 14, 2006 at 07:29 AM

    calmo says...

    So many odd statements: "Corporations have a legal requirement to maximize profits" [as if we were inundated with corporations running afoul of this legal requirement](But maybe shareholders are sueing CEOs on this very issue of looting these profits?)
    It just doesn't sound right, yartrebo and "a legal requirement" is what hurts me ear.
    Not that "long or short" profits is that much of an improvement, eva. Let's be clear: Fat, juicy profits are just such overwhelming favorites on those lean, dry-as-a bone meager ones.
    (Noah, 85, not the top of his MBA class, started building his Ark at the age of 12 and now that he was given The Word that the rains would begin this weekend, started the auction for the one female human seat. This was not your ordinary Airline Seat Sale.)
    I don't think Scruffy used that in his successful defence of absconding with the company's funds: "It was just a crazy impulse, Your Honor."
    (But maybe he did. And maybe the judge found the same crazy impulse to agree that he did. Beware the mighty infectious Impulse! So Scruffy had not taken into account the externality that his own Board of Directors might indict him. Forunately, the judge was not as external as all that and pronounced him innocent. Unfortunately, the Board refused to accept him back even in the face of his innocence --an unforseen internality.)
    Those mighty 400 Billionaires that Fortune tabulates, are there any who have not used Corporations to get into that club? (Are there any who would be interested in Noah's female seat even if it meant a sex change operation?) Are any of these people (who have derived their status from connections to corporations), responsible citizens or merely successful businessmen?
    Ok, Corporate Social Responsibility, not the oxymoron it appears and I am not helping matters. No, I can see that I'm being totally irresponsible: wasting good people's time and effort with sostupid Noahtalk.

    Posted by: calmo | Link to comment | December 14, 2006 at 08:50 AM

    evagrius says...

    I'm just thinking that profit is non-existent. Truly non-existent. It's a fiction, created from the future.

    Noah would have made a mint these days, especially as the waters rise, ( the bidding! so fierce!).

    Can Bill Gates build a modern Ark following Hawkins' advice? How much would he charge?

    Posted by: evagrius | Link to comment | December 14, 2006 at 09:12 AM

    callahan says...

    The Swift Meat Packers situation (90% of it's employees are illegal Mexicans)is a fine example of Corporate Social Responsibility, ... responsible for illegally hiring those illegals.

    Posted by: callahan | Link to comment | December 14, 2006 at 09:41 AM

    calmo says...

    I heard that on NPR too callahan. Imagine using perfectly good ID like 'Dave Smith' and nobody saying a word for years that it looked odd for that guy who sure looked Mexicano...
    So the Mexicans are sent home, but the Swift managers supervising these Mr Smiths?
    You wanna pay more for your sliced meat? Maybe now, most will want to pay more...and to get more personal, that house you built with the same Mr Smith labor, you want to pay 2 or 3 times for the legal worker? Not quite so readily it appears.
    Profits are non-existent? (See, I'm just not a philospher, eva. With those Swift meat cutters, I see the Swift shareholders profit as stolen wages. We all agree to look the other way which is part of the theft too: we pay for only part of the meat that without the illegal's lower wages would have cost more. He is complicit with this exploitation because it beats his Mexican experience and he has hopes of joining the janitors. Former meat cutters have moved into RE and live happily ever after eating cheap Swift meat. Not all jobs are permanent, but profitable learning experiences for better paying jobs.
    I am a rambling unprofitable mess today: FD short calmo long everybody else.

    Posted by: calmo | Link to comment | December 14, 2006 at 10:10 AM

    Richard says...

    "What I've noticed is that there seems to be a trend towards shorter and shorter 'time-frames' to measure profit. Am I correct?"

    And isn't it part of a larger cultural trend in general -- to live faster lives, to make quicker decisions, to have less time to reflect, to have more friends though less intimacy -- in short, to relentlessly shorten the span and the depth of all experiences, large and small.

    "Hey, why not daily profitability statements? I can trade that underperforming-over-the-last-24-hours-stock in 2 seconds on ETrade!"

    Posted by: Richard | Link to comment | December 14, 2006 at 10:14 AM

    Lars Smith says...

    Here is a relevant article by Geoffrey Heal,

    http://www2.gsb.columbia.edu/faculty/gheal/csrarticle-Geneva%20papers.pdf

    Posted by: Lars Smith | Link to comment | December 14, 2006 at 10:33 AM

    evagrius says...

    cakmo; Profit being non-existent is, of course, over the long term, like a couple of thousand years. Check out the MIddle East places like Lebanon or even Greece. They once had beautiful forests.

    As for the Tom Swift boys, there's a well known process by which to verify someone's immigration status- ask for the green card, send the number to the former INS service and get back a verification of status. It's done all the time in social services ( it's called S.A.V.E.).

    The Swift CEO should be in the hoosegow along with the BOD.

    Posted by: evagrius | Link to comment | December 14, 2006 at 10:40 AM

    ECONOMISTA NON GRATA says...

    Again, I can only say that it all starts with meaningful, verifiable and enforceable campaign finance reform, as well as strict, clear and evforceable staruatory ethical standards. Perhaps that is one of the reasons why the office of the Attorney Genral is objecting to the proposed changes in the paper money in a recent ruling by a Federal Judge as it relates to the blind. Imagine having to exchange all the graft. Must be billions if not trillions out there in the freezers.

    In a capitalist culture everything is for sale, why, I'd sell my grandmother to you if you offered me one dime over what I thought she was worth.

    It's too bad that corruption is so pandemic. The question is, what are we going to do about it....?

    My best regards,

    Econolicious

    Posted by: ECONOMISTA NON GRATA | Link to comment | December 14, 2006 at 10:55 AM

    donna says...

    Corporations are run by people, and people can be responsible. For those areas where corporations are not being responsible "citizens", then other citizens have every right to use governmental controls to force those corporate citizens into behaving responsibly.

    The problem is the corporate lobbyists, who should be banned from influencing our legislators. But, corruption is rampant, and the citizenry is still fooled by the incompetence of media reporting. The campaigns like Wake Up Walmart that have used the power of the internet and viral marketing are influential because they enable citizens to take common action against corporations that government has refused to enact legislation to control.

    Corporations do have an obligation to be good citizens and consider all stakeholders - their stockholders, employees, customers, and the larger population. To deny they have these obligations is to behave irresponsibly and risk lawsuits that can in the end cost the company far more than making a short-term profit.

    Posted by: donna | Link to comment | December 14, 2006 at 10:55 AM

    calmo says...

    Who am I to defend Swift Luncheon Meat Head?
    U B right eva (I'm even warming up to 'cakmo')...as Richard turns light bulb on for me: it is not how well you live but how fast and shallow.
    No, that can't be it: it is not how well you live but how busy...anything to avoid looking at yourself in the mirror.
    No, maybe not. It is not how well you live but how many lumpy experiences you can dilute to the thinnest pancake ever.
    I'm sure that's not it.
    But I think this misses alot of interaction too:

    Profit being non-existent is, of course, over the long term, like a couple of thousand years.
    Gates might look like the Cat's Meow for short-term profitting, but in the long haul, this Windows OS will be seen to be the deforestation it really is. This misses alot of human tapping on keyboards, alot of uneven distribution of benefits, alot of underpaid labor, alot of foregone opportunities.
    FD: short heavily calmo and Richard and eva way less.

    Posted by: calmo | Link to comment | December 14, 2006 at 11:30 AM

    Bruce Hall says...

    I retired from Ford Motor Company some time ago, but recall how there were always some special effort going on to be "socially responsible."

    Ford prided itself in being the largest contributor to the United Way... Ford employees gave much more than the total coming from General Motors. Ford gave employees paid time off to participate in charity and social work such as Habitat for Humanity. Ford still has an extensive program for retirees to participate in community efforts. Bill Ford was constantly running off to be involved in charitable events or coming up with environmental improvement ideas he wanted implements (some of which actually saved Ford money).

    There were downsides as well. Ford's support of "diversity" particularly the gay and lesbian groups got it in trouble with the Christian right-wing. It lost a lot of capable, experienced white males as it attempted ethnic diversification and then found out that non-automotive backgrounds didn't help a lot in many instances. These actions might have been considered "strategic" presuming that they were aimed at widening the buyer base to more special interests, but had the opposite effect.

    The point is that there are no guarantees that any social effort will be profitable. At best, they can be written off as a special form of advertising. At worst, they backfire.

    Posted by: Bruce Hall | Link to comment | December 14, 2006 at 11:47 AM

    calmo says...

    So 'good corporate citizens' always come in last? No,that can't be it: 'Good corporate citizens run effective Public Relation Departments.' Ok, maybe a tad jaded but clearly, Ford Motor Company is not Pall Mall. [See, I could work along side Bruce Hall.]
    We don't expect Ford to be The Salvation Army, ok?
    But donna (possibly Senior VP Marketing & More) says it way more better:

    Corporations do have an obligation to be good citizens and consider all stakeholders - their stockholders, employees, customers, and the larger population.

    Now there are many who want to rule out GE just because of those anti-personal weaponary thingies that cannot be good for citizens, and shoot, all those other companies bent on profitting from the development of anti-civilian products.
    But they would be ruling hastily since if GE doesn't develop those anti-personal products someone else might and that would be so much worse. [See? the proliferation of evil is contained.] So even the non-stakeholders, possibly even the terrorists (who could have a change of heart people --don't be so prejudicial!) are considered by GE...just not to the extent that they might get a bonus or a stock option or...even a free light bulb.
    donna and Bruce are so reasonable as to be suspicious: we citizens, cap in hand, beg the companies not to pillage indiscriminately but to allow us some measure of stewardship for which we will repay them with our utmost loyalty...as per Japan?
    FD long donna maybe Bruce

    Posted by: calmo | Link to comment | December 14, 2006 at 01:46 PM

    Alan says...

    I think the private vs. government dichotomy used in this analysis is too static. Once a firm has, for whatever reason, invested in a non-costless "socially responsible" policy, it becomes in that firm's interest to support lobbying efforts to impose similar costs on its competitors. Successfully pressuring a single company to adopt a particular policy can thus alter the political dynamic with respect to desirable legislation by, for instance, creating a split in and thus neutralizing the trade association.

    More generally, I think economics professors, as opposed to business professors, tend to overlook the way firms use government regulation as a competitive tool.

    Posted by: Alan | Link to comment | December 14, 2006 at 02:29 PM

    Lafayette says...

    MT: “but I do agree with the conclusion that it is wishful thinking to believe that firms will take individual voluntary actions to demonstrate social responsibility when those actions reduce profit. “

    A public company has a primary duty to shareholders. It is not “in the business” of social responsibility except as an indirect desire to be a good “corporate citizen” within any community. That particular responsibility, however, has no broad or specific dimension.

    “Thus, I also agree with the conclusion that the correction of market failures and the pursuit of social justice require government intervention,”

    Yes, but how?

    There is only one effective leverage on corporate decision-making and it is that which affects net profit. Meaning invariably corporate taxes. However, corporate taxation is a heavy, blunt instrument and must be used with care.

    Aggressive cost amortization of investments that enhance individual labor productivity is an example. For instance, investments to replace labor with automated processes do not increase individual labor productivity but general corporate production productivity. So, the focus is upon workforce skills, techniques and competencies. Or, the availability of kindergartens for female employees reduces the mother-care burden and enhances their productivity on-the-job.

    The above examples represent the limited amount that can be expected of corporations. Others certainly exist; it suffices to put our thinking caps on. They are limited, but nonetheless non negligible towards reducing the job precariousness particularly of the lower-skilled workforce.

    All other social responsibility therefore must come from specific government programs orientated or focused upon the social groups most in need of them - and this ranges from the poor to the middle-class.

    The most important of them is obviously medical coverage (for ALL workers) of the kind Romney has instituted in Massachusetts and that most European countries have had for decades.

    Education to university level is a key element to national productivity. But, also, it is crucial also to a population that learns how to think in general terms about the world around them. Life is not simply a matter of reducing challenges to a uniquely economic dimension for measurement. The arts play a great part in rounding out individuals. Psychology helps in understanding how and why people behave in a particular manner or circumstance. This subject deserves a university level treatment and not that of weekly magazines that give “personality tests” of dubious usage.

    Moral philosophy and that of ethics is a constant challenge not only in business but in society as a whole. It is, for example, at the root of delinquency which sprouts from an obvious lack of civic instruction within today's youth. What is their role in society? What are their rights? But, also, the flip side of the "liberty coin" – all too often forgot - what are their duties and responsibilities in the society within which they strive to make a place for themselves.


    Posted by: Lafayette | Link to comment | December 14, 2006 at 09:13 PM

    georgist says...

    Alan:

    More generally, I think economics professors, as opposed to business professors, tend to overlook the way firms use government regulation as a competitive tool.

    Take a Public Choice course. Most government regulation is an anti-competitive not a "competitive" tool.

    In fact, "strategic" CSR would be expected to suffer from the same issues: customers may be "voting with their wallets", but they have no incentive to get rationally informed.

    Posted by: georgist | Link to comment | December 15, 2006 at 06:47 AM

    evagrius says...

    Lafayette;

    I think you should have written this paragraph;


    "Moral philosophy and that of ethics is a constant challenge not only in business but in society as a whole. It is, for example, at the root of delinquency (and business frauds, pollution, worker abuse )which sprouts from an obvious lack of civic instruction within today's youth, ( and business and management leaders). What is their role in society? What are their rights? But, also, the flip side of the "liberty coin" – all too often forgot - what are their duties and responsibilities in the society within which they strive to make a place for themselves."

    The youth look at their elders for moral instruction. If their elders are morally lax, why should they strive to be moral?

    Posted by: evagrius | Link to comment | December 15, 2006 at 07:15 AM

    callahan says...

    I was able to purchase better quality meat before the illegals took over with their cheap labor. That was back when I was a common laborer, earning a decent wage. Now I am in the Information Technology field(today's semi-skilled labor?) with less meat buying power than that of my yesteryear laboring.

    Sing along with me "I'll be broke for Christmas".

    Even as I wear my $10 Chinese shoes.

    Time to march (with arms) unto Washington.

    Posted by: callahan | Link to comment | December 15, 2006 at 08:55 AM

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