First a quotation from the late economist Milton Friedman, his words in 1973:
When an executive decides to take action for reasons of social responsibility, he is taking money from someone else -- from the stockholders in the form of lower earnings or from the consumer in the form of higher prices.
So believed Milton Friedman, and his ideas about responsibility were taught (and are still taught) to many thousands of MBAs. We have truly suffered the consequences, not only in industrialized countries, but even more so in developing countries around the world.
Most industries produce waste products that can pollute the air and the ground, or use materials in factories that can harm workers, and if we're to have an industrialized society, such consequences of industrialization are unavoidable. What is avoidable, however, is fooling the public into believing that pollution or potential harm is absent when it exists, hiding the dangers when science says they may be considerable, and cutting corners on environmental and worker protection in order to maximize shareholder profits.
The public problems concerning environmental hazards produced by industry are essentially problems of combating the junk science about pollution broadcast by industry and government, and the problem of defining and accepting the idea of corporate social responsibility.
Milton Friedman's idea, quoted above, that social responsibility costs money, is what I call "wimpy thinking" -- thinking weak and ineffective in logic, thinking with a superficial attitude often attached to an even more superficial philosophical precursor premise or set of premises. Such thinking in the hands of many executives in industry usually produces a posture that results in either hiding science or twisting science to achieve corporate ends.
A human society is a collection of individuals organized for mutual benefit but primarily for survival. When social interactions threaten survival of society, the main reason for the existence of society vanishes. The important conflict, apparently unrecognized by Friedman and others, is not between social responsibility and profits, but between short-term profits and long-term losses. In the limit, in the complete absence of social responsibility, society dies (including shareholders!) and there are no profits for anyone. The idea that the need for corporate social responsibility is a nuisance invented by activists is maybe the most dangerous idea in the ranks of industry in America and elsewhere.
The social sciences have a term for individuals who refuse social responsibility: They are called "free-riders."
But do "conservative" executives, economists, and politicians really believe that social responsibility is a waste of money? Apparently they do, all of it wimpy thinking, since their so-called "conservatism" does not extend to conserving the society that makes industry, business, and capital gain possible.
At least some of these people must understand they cannot kill society and still live in it. Maybe the general idea is to bleed society slowly, not enough to kill it, only enough to keep the profits rolling in while keeping the weakening creature alive long enough to at least secure the privileges of one's grandchildren. But as a business strategy, this is certainly too dangerous -- both for one's grandchildren and for the rest of society.
The image evoked is vampirism. But the classic vampire bleeds his victim with restraint in order to prevent the victim's death and the consequent loss of blood supply. Too often our industrial vampire seems confused about how much restraint is necessary, the result a stupid vampirism that sometimes kills the vampire himself after social discovery and enormous financial losses.
Meanwhile, ordinary people die, collateral damage in the rush for profits. Some die quickly and some die slowly, but they die like poisoned flies.
Adapted from Junk Science: How Politicians, Corporations, and Other Hucksters Betray Us. Dan Agin. St. Martin's/Thomas Dunne, 2006
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