As you can perhaps tell from my dyspeptic response to some of our Ideas Festival sponsors' efforts to brand themselves as "green," (see also Boeing's hilarious hand-crank powered flashlight) I don't see the "corporate social responsibility" movement as having a ton of promise. I think large firms will more-or-less inevitably seek to maximize profits and the role of the state is to ensure that that profit maximizing behavior takes place in a larger framework such that its impacts are beneficial. But this is a practical concern, and I absolutely agree with Brad DeLong that the "strong" anti-CSR position outlined by Milton Friedman and others doesn't make much sense and actually seems blind to the non-coercive genius of capitalism.
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Corporate Social Responsibility
01 Jul 2008 11:09 am
Comments (10)
I see this as a chance for big companies to run a ploy on passing costs to consumers. People are sooner than later going to question the Greenwashing of advertisements and new products because prices will invariably go up based on current economic trends and that there will be a "green fee" tacked onto these new or revised products.
Where consumers would pay for the R&D costs in the product itself which should include environmental initiatives, I believe we're going to pay a bit more on top of that just because it's "green."
Thoughts on the new Wal Mart milk jugs?
Kent Greenfield has written a great book on this subject that is better than any comment I could offer:
"The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities"
http://www.amazon.com/Failure-Corporate-Law-Fundamental-Possibilities/dp/0226306933
From the Amazon Description:
With The Failure of Corporate Law, Kent Greenfield hopes to return corporate law to a system in which the public has a greater say in how firms are governed. Greenfield maintains that the laws controlling firms should be much more protective of the public interest and of the corporation’s various stakeholders, such as employees. Only when the law of corporations is evaluated as a branch of public law—as with constitutional law or environmental law—will it be clear what types of changes can be made in corporate governance to improve the common good. Greenfield proposes changes in corporate governance that would enable corporations to meet the progressive goal of creating wealth for society as a whole rather than merely for shareholders and executives.
While I certainly found Ambinder's post on the hand-crank flashlight amusing, I don't understand this Boeing-bashing.
The sponsor-bashing is designed to immunize us to charges of sponsor-shilling.
Matt: "the role of the state is to ensure that that profit maximizing behavior takes place in a larger framework such that its impacts are beneficial."
Good luck with that.
"I don't see the "corporate social responsibility" movement as having a ton of promise."
The reason there is even a movement is that companies fear impending regulations brought on by public/consumer pressure. Companies that try to go "green" are doing so because: 1) it relieves public/consumer pressure on politicians to "do something"; and 2) if #1 doesn't work, they will be a little more prepared for a new regulatory environment.
"I don't see the "corporate social responsibility" movement as having a ton of promise."
The reason there is even a movement is that companies fear impending regulations brought on by public/consumer pressure. Companies that try to go "green" are doing so because: 1) it relieves public/consumer pressure on politicians to "do something"; and 2) if #1 doesn't work, they will be a little more prepared for a new regulatory environment.
Mathew,
Firstly, let me congratulate you on the neat and clear presentation of your blog.
It is an unfortunate reality that the efforts of "Corporate Social Responsibility" of some companies represent a large amount of spin doctoring by public relations firms.
True corporate social responsibility, which involves sound ethical practices across the entire spectrum of an organization's operations, is beneficial to society - spin doctoring is not.
One promising development in recent times is the trend towards companies partnering with NPOs and community organizations in community business partnerships. Under this model, only projects which have significant social or environmental benefits are undertaken, otherwise NPOs and community organizations would refuse to be involved. Also, such projects usually have very specific outcomes, enabling the community to assess the value of such outcomes.
Cheers
Andrew
In the end, the idea that common sense/CSR will reign is little more than apologist, anti-regulation rhetoric (although I know many pro-CSR folks are sincere). Consumers should buy from responsible companies and boycott irresponsible ones, but the state has to regulate harmful impacts from industry. Relying on boycotts isn't good enough.
Of course, overly burdensome regulations are also a real problem, especially since they keep out small businesses who don't have all the lawyers that big businesses have. But that's the balance the state needs to find.
Comments closed July 15, 2008.
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Heads in the Sand
While I certainly found Ambinder's post on the hand-crank flashlight amusing, I don't understand this Boeing-bashing. While air-travel may be hooribly ineffecient and consume massive quantites of carbon-spewing jet fuels but they are providing a service that people seem to want.
After all you guys seem to have no compunction about hoping on a passinger airliner so you can jet 2/3 of the way across the country in order to discuss 'ideas' and make fun of Boeing's flashlight.
Posted by DP | July 1, 2008 11:49 AM