Thursday, June 23, 2011

Corporate Social Responsibiliy - Milton's Loophole

Peter Foster:
It was more than 40 years ago that economist Milton Friedman described the concept of corporate social responsibility (CSR) as “pure and unadulterated socialism.” He noted that the embrace of CSR by businessmen helped to “strengthen the already prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of government bureaucrats.”

In fact, a new “iron fist” has emerged in the intervening period to “curb the market.” It belongs not to bureaucrats but to radical environmental non-governmental organizations (ENGOs), who have achieved a stunning amount of boardroom influence. They have done this, paradoxically, by learning from Prof. Friedman, and in particular by exploiting what might be called “Milton’s loophole.”
Prof. Friedman said that part of an executive’s role, beyond his primary task of serving shareholders, was to conform to “the basic rules of the society, both those embodied in law and those embodied in ethical customs.” ...
There is not a company on Earth that now fails to pay obeisance to the essentially socialist notion of “sustainable development” (SD), ... Corporations keen to achieve their CSR and SD badges have, meanwhile, found themselves cast as mouthpieces for radical environmentalism.
... A classic example appeared in a recent ad in USA Today. The ad features the names of both California-based grocery chain Trader Joe’s and ENGO ForestEthics...

It seems astonishing that a company would allow itself to be the ventriloquist’s puppet for so much misinformation. ...
Today there were two responses, one from Greenpeace Canada:
[From the first letter] ... firms would not respond to environmentalist bullying if they didn’t think it would help their bottom lines [more accurately avoid having their bottom lines damaged by smear campaigns].
[From Greenpeace]... Milton Friedman would surely have approved of this Greenpeace tactic: private actors negotiating with private actors for the public good ...
The first admits the "bullying" which Greenpeace calls "negotiating".  What neither will acknowledge is that the Trader Joe ad is dishonest scare-mongering aimed at intimidating oil sands producers and fund raising.  Greenpeace's and ForestEthics' "bottom lines" come from the money they raise from whipping up public environmental hysteria. Milton Friedman would definitely NOT approve of such dishonest, extortionate tactics.

2 comments:

Alex said...

I immediatly turn away from greenwashed products and advertising. Everyone should do this. Its bull anyway and rewards the sniveling by corporations to these human hating frauds.

I will never buy GM vehicles or even step foot inside Bloodbath and Beyond for life.

JR said...

Ditto, Alex. To do otherwise is to countenance flim-flam, fraud and worse. Besides being, at best, no better than other products the green-washed ones are usually much higher priced. It's lose, lose, lose.