It seems to me that many discussions of the “social responsibility” of firms do not pay sufficient attention to these gains from pleasing customers and paying workers and suppliers. Such gains should not be taken for granted.
I think that people place corporate wealth in a mental category that is used for natural resources, like water or minerals. If you control such resources, then you must be rich, and you must recognize an obligation to share them. When you think in terms of endowments of resources, you don’t think in terms of corporations creating wealth or competing just to survive.
Maybe I should expand on that thought. Meanwhile, read the rest of Taylor’s post.
I would very much like a social responsibility of corporations (and celebrities) to completely stay far away from politicians and any major political controversies.
This is especially important as a defusing mechanism in the era of “mob multiplier marketing” (in truth, public trolling) strategies that specifically try to provoke outrage and passions on matters about which people are already primed to be hypersensitive, in order to ride the viral wave of free media and social reaction to the stunt. That is, when there is “no such thing as bad press”, entities which depend on otherwise expensive advertising are incentivized to create as much bad press as possible to get some extra attention for free.
And that’s really bad for our society. It’s an example of private gains for externalized public costs, but because it’s polluting the social environment, we have mostly abandoned the effort to control it. “Real externalities that the law doesn’t or can’t deal with well” is probably the strongest case for a new “social responsibility” anyway.
For example, Nike recently likely increased their profits by making Kaepernick’s ‘protests’ the face of their recent ad campaign. That was socially irresponsible. And in general, any time any company makes a conspicuous effort to look like it’s taking sides, it provokes those coalitional instincts in which people gang together in their groups and start to make support or objection to the move a focal point of their group identity, which just magnified tensions with the opposing group.
Why does Nike need to regard your definition social responsibility? If it is a good ad campaign that increases sales than it must the right choice for Nike.
I don’t know if Handle’s stay-away-from-political-controversies approach is really possible. Unfortunately, political controversies have a way of going to businesses, via “If you’re not signalling support for our cause, then you must be against us”.
To take an example from one end of the political spectrum, there recently occurred a minor uproar at a local community college over one of their posters, which featured a photo of two students interacting with a faculty member. All three subjects were white; and this, we were informed, was clear evidence of institutional racism.
At the other end of the spectrum, consider the unhappy fate of the businesses that issued materials during December printed with something like “Happy Holidays”, with no mention of Jesus. By doing so, we were told, they were signalling their enmity toward Christianity.
It seems to me that many discussions of the “social responsibility” of firms do not pay sufficient attention to these gains from pleasing customers and paying workers and suppliers.
Well in general, businesses and workers have make their company and personal goals not about just money
1) A lot of this is just advertising and a lot companies ‘social responsibilty’ is trying to prove a company is more than just profit maximization. Go to the Koch Brother website and they are full awards for environment protection.
2) How many job interviews are only about you wanting to make more money? How many sales pitches are about our company needs to make money? If the main goal is making money for yourself, it is limited pitch.
3) Long term, I think the acceptance of corporate profits have grown in my lifetime.
4) Being against a specific corporate profits is easy way to disregard a company goal. Look at Handle’s claim on Nike Kaepernick’s campaign that it is bad even if it increases profits. What about complaints against WaPo or NYTs anti-Trump articles? There campaign against Trump has helped their profits and yet you disagree with their campaigns. (Why can’t NYTs be like Fox News? Anyway I thought weird that that the press was hated in Ayn Rand’s as Wynand hurt his company and profits supporting Roark efforts.)
5) Long term, I do think the competitive global economy has been great for the world but I do find it a great contradiction that the more competitive the nation/people, the more that nation/people put off family formation and have falling birth rates. (Sort of the Singapore reality.)
My point 5 is weak and maybe the focus should be on the other aspects conservatives value which is community and religion. (And I would suggest the diminished role of religion is one reason births are generally dropping in the developed world.) And the reality of 1950s, it was true that a lot of what was good for GM was good for America but that correlation has diminished since 1970s. (Lots of reason.)
So the continue focus and value of corporate profits have increased since 1970, there has been a cultural diminished value to community and religion. This is a big deal for the conservative movement as Mitt Romney, a good and moral man, lost his Presiential run partially because Obama campaign could paint him Outsourcer Commander Chief while Trump won the primary and election with voters that value the business/community realities of the 1960s. (Yes I know Romney got a higher percent of the voter against a stronger candidate.)
Prof,
You should definitely expand on that point. How to do so is not clear to me.
An interesting corollary, or related notion, is that companies should just pay more money to their workers (because companies have money they don’t need, while workers need money they don’t have). And minimum wage should go up! And rents should go down. Fair is fair, after all.
Perhaps as clever primates we tend to think in terms of stocks rather than flows. The company is like a big pie–workers and society in general just want a bigger slice! It will pay for itself when workers spend the money.
We all know what’s fair in our cave-man and cave woman brains–it takes more mental effort to reason past that. Perhaps this could be linked to the _Thinking, fast and slow_ model. Fairness is perceived instantly, while the round-about-ness of economic organization requires us to slow down and think hard.