It's okay: I'm not out of my tree. I have a plea, and unusually, Mr Friedman can back me up.
Let us please stop insisting that business can or should solve social or environmental problems. They emphatically cannot: they never could, as Milton Friedman so eloquently explained in his 1970 essay, titled 'The Social Responsibility of Business is to Increase its Profits'. We do not need the consent of business to stop climate change or eradicate poverty. Even if the individuals within companies supported those ideas, as agents and employees of the owners of companies, they have no mandate, no power to act. Society does not need the cooperation, the approval, the consent of the private sector to stop climate change or social injustice. That is what elected governments are for. Our responsibility, as citizens, is to elect the governments who will make the right social and environmental changes. If there are no such competent representatives present in the political system, we must find them, support them, and de-select those in power who are not capable of making these changes. Let's leave stockholders to elect business representatives, to perform their corporate roles. And the politicians we should be electing can close down the industries that are destroying our future, our planet, and social justice. Why? What's wrong with corporate social responsibility? Why shouldn't businesses give a little back, and try to be socially or environmentally ethical? Well, as Friedman put it, when a corporate representative is required to turn to ethics: "The businessman ... is to be simultaneously legislator, executive and jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds--all this guided only by general exhortations from on high to .... improve the environment, fight poverty and so on and on. The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. This justification disappears when the corporate executive imposes taxes and spends the proceeds for "social" purposes. If they are to be civil servants, then they must be elected through a political process. If they are to impose taxes and make expenditures to foster "social" objectives, then political machinery must be set up to make the assessment of taxes and to determine through a political process the objectives to be served. Can the corporate executive in fact discharge his alleged "social responsibilities"? How is he to know what action of his will contribute to [any social or environmental] end? He is presumably an expert in running his company--in producing a product or selling it or financing it. But nothing about his selection makes him an expert on [social or environmental problems]. Even if he could answer these questions, how much cost is he justified in imposing on his stockholders, customers and employees for this social purpose? And, whether he wants to or not, can he get away with spending his stockholders', customers' or employees money? Will not the stockholders fire him? (Either the present ones or those who take over when his actions in the name of social responsibility have reduced the corporation's profits and the price of its stock.)" Paul Polman, ex-CEO of Unilever, might well have sympathetic views on Friedman's foresight. It is not the job of business to save the planet or eliminate poverty. Worse, their efforts with one hand justify the continued damage they do with the other. The job of ethics, social well-being, and environmental sustainability is that of governments. Let's stop wasting time asking business to be ethical, and give back the mandate of governance to governments.
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AuthorHow to identify myself... a deeply concerned citizen of a fucked-up world, swinging with circadian regularity between esprit de vie and deep, black despair. PhD, entrepreneur, author, international experience, woman (should I add chromosomes to my list of qualifications....?) Archives
May 2020
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