Good Company?

Julian Sanchez | January 25, 2005

This week's Economist has a feature survey casting a skeptical eye on the idea of "corporate social responsibility." Slightly unsettling is the author's notion that CSR is an intrusion on government's scared turf, but he makes the interesting point (one I gestured at here) that firms no less than governments may enact well-intentioned policies with perverse and unintended consequences once consumption becomes symbolic—that is, once you're not just selling a cheap, efficient widged, but an image of the "good corporate citizen." So, for instance, companies may avoid charges of "exploitation" by diverting jobs from developing countries to more-productive and higher-paid workers in the developed world. To the extent this avoids bad PR, it may even be good for profits. But if it raises prices while depriving poor countries of desperately-sought jobs, it's scarcely an unambiguous improvement, even if it leaves western consumers feeling good about their purchases.

Other than the intro essay, most of the articles are only available to subscribers, but there's an interview with the author available to all.

Comments

|1.25.05 @ 10:47AM|#

If I were the government's turf, I'd be scared too!

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gaius marius|1.25.05 @ 12:20PM|#

i read their leader and can't help but think that the author (and maybe the economist) has an incomplete picture of the world. they run on and on about smith (and implicitly locke) but do not recognize how the west has profoundly changed since 1688.

i agree that diverting work from the third world for wage concerns is silly. but calls for corporate responsibility are a product of the rampant antisocial individualism of our times -- which did not exist in adam smith's world.

the economist notes:

Thus, the selfish pursuit of profit serves a social purpose. And this is putting it mildly. The standard of living people in the West enjoy today is due to little else but the selfish pursuit of profit. It is a point that Adam Smith emphasised in 'The Wealth of Nations': "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." This is not the fatal defect of capitalism, as CSR-advocates appear to believe; it is the very reason capitalism works.

right -- but what smith and locke understood to be self-interest is not what we would think. smith envisioned a fundamentally christian "commercial humanism" -- not the randian war of all against all he is too often caricatured to have meant. this is a man who wrote "the theory of moral sentiments" -- his most popular and influential book in his lifetime -- to advocate the sympathy, tolerance and common humanity he felt so strongly that he assumed it innate -- and took care to separate the moderate "selfish" from the destructive "unsocial".

Hatred and anger are the greatest poison to the happiness of a good mind. There is, in the very feeling of those passions, something harsh, jarring, and convulsive, something that tears and distracts the breast, and is altogether destructive of that composure and tranquillity of mind which is so necessary to happiness, and which is best promoted by the contrary passions of gratitude and love. It is not the value of what they lose by the perfidy and ingratitude of those they live with, which the generous and humane are most apt to regret. Whatever they may have lost, they can generally be very happy without it. What most disturbs them is the idea of perfidy and ingratitude exercised towards themselves; and the discordant and disagreeable passions which this excites, constitute, in their own opinion, the chief part of the injury which they suffer.

Smaller offences are always better neglected; nor is there any thing more despicable than that froward and captious humour which takes fire upon every slight occasion of quarrel. We should resent more from a sense of the propriety of resentment, from a sense that mankind expect and require it of us, than because we feel in ourselves the furies of that disagreeable passion. There is no passion, of which the human mind is capable, concerning whose justness we ought to be so doubtful, concerning whose indulgence we ought so carefully to consult our natural sense of propriety, or so diligently to consider what will be the sentiments of the cool and impartial spectator. Magnanimity, or a regard to maintain our own rank and dignity in society, is the only motive which can ennoble the expressions of this disagreeable passion. This motive must characterizeour whole stile and deportment. These must be plain, open, and direct; determined without positiveness, and elevated without insolence; not only free from petulance and low scurrility, but generous, candid, and full of all proper regards, even for the person who has offended us. It must appear, in short, from our whole manner, without our labouring affectedly to express it, that passion has not extinguished our humanity; and that if we yield to the dictates of revenge, it is with reluctance, from necessity, and in consequence of great and repeated provocations.

it is in this way we can see how we differ. emotionally-charged retribution and perfidy and ingratitude in kind are the hallmarks of the modern man in loss because we have become so individually selfish and prideful and immodest as to render ourselves powerless but to feel so unmitigatedly at the loss of anything -- or even the threat of loss. moreover, in the aftermath of the romantics, we feel entitled to act out our emotions in any way we please, society and expectations be damned. capitalism practiced from such an amoral, unrestrained basis becomes not the engine of creativity but an exercize in nihilistic indulgence.

smith presumed that the search for shareholder benefit would occur within the utilitarian moral framework he found around him -- and is hopelessly lost today, post-byron, post-nietzsche. to belittle many efforts at social responsibility as inefficient and counterproductive misses the point of why such a notion might take root and indeed be needed in the first place. the shallow cynicism with which many companies practice CSR, as the economist rightly notes, only drives the point further home.

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|1.25.05 @ 1:19PM|#

but gaius, without the reflex you deplore so often, so eloquently, towards hyperindividualism, none of what regular old non-aristocrats take for granted now would exist in their current form. most of what you hold up - decency, modesty, etc - were forms created by a ruling class to help keep the peons in line, as well as mitigate their own generally immodest tastes to some degree. the world we live in now, for better or for worse, offers a better chance at long life, liberty and happiness in america than it did 150 years ago, pre-nietzche.

besides, would you want to live in locke's time? seeing as he had to run to the netherlands to avoid an indefinite stint in the tower, apparently even the aristocrats of his day - perched as society's "betters" - saw not much of the nobility of locke's views.

perhaps because they saw part of their age coming to an end with it? i dunno.

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|1.25.05 @ 1:30PM|#

My reading of the article left me with the impression that CSR efforts were minute and ineffective: window dressing rather than substance. To that extent, I'm not sure I agree with the idea that a material effect on employment in developing nations is likely to result.

I agree wholeheartedly with gaius marius's reading of smith. That he was primarily a moral philosopher is too often forgotten. I'm less sure that smith would have been totally at odds with ayn rand or with "modern individualism." I also think that the quoted section of smith is more representative of his thoughts on moral philosophy and the social behaviour of man rather than guide as to how to conduct commerce.

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|1.25.05 @ 1:35PM|#

gaius,

Blech, I say.

Modern man is not particularly greater in inclinations toward pride and selfishness than at any other point in history. What we are is particularly greater in each of our capacities to act charitably. You are romanticizing pre romantic sentiment. The social constraints of the time do not dictate what we feel, but what we choose to display.

As to social responsibility, I would suggest that you be careful what you ask for. If you dig closely enough into the idea of responsibility, you inevitably wind up in areas of ownership and control. The appropriate level of responsibility is the shareholder and the customer, as those are the relevant willful agents.

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gaius marius|1.25.05 @ 1:48PM|#

the world we live in now, for better or for worse, offers a better chance at long life, liberty and happiness in america than it did 150 years ago, pre-nietzche.

let's not confuse, mr dhex, the advance of techne with the cyclicality of society. so did the average roman under augustus live much better off technologically than did the athenian under solon. but that longer and more comfortable life was not a manifestation of politics; archimedes and leonardo worked for despots.

beyond that, however, smith's capitalism obviously unleashed great productive forces that bettered the world. but it would be a mistake to assume that past is prologue. capitalism -- and darwinism -- have changed the human outlook profoundly and negatively w/r/t society; i think it no exaggeration to say that in our initial material success by an admission of a modicum of greed and individualism into a strong social framework, we have sown the seeds of our destruction by allowing those impulses to propagate in more recent times to the point of destroying the society that was meant to check it. the assumption that more of the same will be better is rarely so.

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gaius marius|1.25.05 @ 2:04PM|#

I also think that the quoted section of smith is more representative of his thoughts on moral philosophy and the social behaviour of man rather than guide as to how to conduct commerce.

i wonder, mr jamie, if smith would be able to divorce the two as we commonly do today. indeed, i think the idea that the two are analytically separable would probably confound him.

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|1.25.05 @ 2:52PM|#

living longer, better...perhaps even wiser (har har) is not solely a function of technology, but of technology's ability to spread. that's a function of the nature of technology combined with political battling, for lack of a better word. it's impossible to ignore that in smith's time, "human" meant far less people than it does today, and all those pretty words didn't change the nature of the rulers to the ruled. i trust more in the mob than in the would-be world controllers, plainly put.

i obviously don't agree with your proscription of society collapsing, but i live in a strange place where all sorts of mutually beneficial social arrangements are commonplace - or at the very least, not worthy of gawking at. perhaps it gives me more hope than the situation merits, but i feel it nonetheless.

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|1.25.05 @ 3:06PM|#

If the production of wealth and provision of goods and services were the only influences that corporations had upon the world, then it would make sense to limit discussion of corporate responsibility to the benefits they provide to shareholders and customers.

But they aren't, so it isn't.

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|1.25.05 @ 4:09PM|#

not to derail too much, but there's very few individuals whose actions only influence such a narrow scope. hence [at least part of] gaius' point, i believe.

it also gives people something to talk about and make careers out of, as well. the naomi kleins of this world, as it were.

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