Corporate Social Responsibility?
From today's NY Times, an article about CSR (corporate social responsibility) and the annual Business for Social Responsibility conference in NYC this week.
And that is why corporations pay taxes, almost $1 trillion in corporate income taxes over the last three years, so the government can "save the world."
OVER 35 years ago, the economist Milton Friedman wrote a famous article for The New York Times Magazine entitled, “The Social Responsibility of Business Is to Increase its Profits.” It’s not hard to find critics of corporate social responsibility who still take that hard-line view.
“C.S.R. is a misguided attempt by a subcategory of business managers to deal with the crisis of corporate legitimacy,” said Isaac Post of the Competitive Enterprise Institute. Russell Roberts, an economist at George Mason University, said: “Doesn’t it make more sense to have companies do what they do best, make good products at fair prices, and then let consumers use the savings for the charity of their choice?”
Their essential point is that companies are simply not equipped to “save the world” — nor is it their mission. That’s what governments are supposed to do.
Whenever a corporation has money available (say $50m) at the end of the year to give/donate to charitable causes and be socially responsible, doesn't that really mean its prices were too high all year, or its wages too low all year?
That is, couldn't Target "give money back to the community" by lowering its prices or having huge sales to increase the standard of living of all of its shoppers by giving them $50 million in cost savings? Or couldn't Target give wage increases or annual bonuses totalling $50 million and "give money back to the communities" where it operates?
And what if I am a Target shareholder, maybe I would prefer $50 million of dividend payments, instead of a $50 million donation to the Boy Scouts? Or maybe I would prefer a $50 million donation to the Girl Scouts or Salvation Army instead of the Boy Scouts?
Friedman: "But the doctrine of 'social responsibility' taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collective doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a "fundamentally subversive doctrine" in a free society, and have said that in such a society, "there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."