Saturday, April 1, 2006

Beware the sign of the socially responsible corporation

I have never known much good done by those who affected to trade for the public good.
— Adam Smith, The Wealth of Nations
Inevitably, the failure of an adulterated, regulated and compromised market will be attributed to a failure of the free market. Getting the market to compromise itself hastens the day. Terence Corcoran in the Financial Post reminds me to instruct my financial advisor to withdraw investment funds from companies that indulge in Coporate Social Responsibility manifestos — from Just say no to NGOs:
For years, the world's leading corporations have been caving in to the CSR movement, warping policy to fit the anti-corporate ideology that's at the heart of Corporate Social Responsibility. Now taught as the official state religion in business schools, CSR has turned some of the world's leading corporations into blithering fonts of social policy cant and profit-denial. We are all here for the good of society and sustainable development, not to make as much money as possible for shareholders.

The self-immolating capitulation seems to have escalated in recent years with the arrival of NGO activists with a fresh agenda: If NGOs can't get governments to regulate, and they can't get public opinion on their side, maybe the pliant sops in the corporate world can be enlisted to bring about their own self-destruction.

The new NGO strategy, developed in recent years, has succeeded in forcing scores of companies -- from J.P. Morgan to Ford Motor to Citigroup -- into roles as pawns of environmentalists, social activists and backroom Marxists disguised as do-gooders out to make a better world.
Read the rest here. See also Milton Friedman's excellent defense of real corporate responsibility in a free market in the 1970 New York Times article, The social responsibility of business is to increase its profits:
When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en­terprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers. In fact they are — or would be if they or anyone else took them seriously — preach­ing pure and unadulterated socialism. Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.