Thursday, February 03, 2005

Part II (dun dun DUHHHHHH)

Alright, here’s the second installment. So I left off refusing to acknowledge the one-to-one relationship of private profit to public good. It’s kind of a staggeringly obvious point, anyway. But it’s worth challenging tired old progressive assumptions on a regular basis to see if they hold up.

Moving on, does CSR do any good? And should we care, by the way? Normally I would say it doesn’t matter all that much, considering the relatively small scope of CSR activities and their impact. But the reason I’m boring you and myself with this Economist article is because CSR is an arena in which the left is actually winning the battle of ideas. Can you say the same for collective bargaining, or equal rights, or progressive taxation? The article laments the fact that we won, and that corporations never fought back, but I believe CSR actually represents business’s stunted, hesitant response to pressure created by the social discourse on corporatization. CSR is so widespread now because people on the left actually convinced the general populace that we ought to expect social responsibility from companies, and that we (as consumers) could use our power to demand it. Sort of.

CSR more or less breaks down into two types: corporate charity and corporate conduct. The article decries corporate charity because it involves giving away someone else’s money. Cry me a river. Given the extremely low donation levels, the existing profit margin, the faulty corporate tax code, and the negative effects of non-philanthropic corporate activity on communities, I could care less about this grievance.

Which brings us to corporate conduct. Crook’s article strenuously objects (hi Sorkin fans) to “codes of conduct” because the standards they enforce cause businesses to abandon contracts in developing countries, and discourage them from investing in Third World capital developers. In fact, Crook blames cut-and-run licensing practice on activist NGO’s and “ill-informed consumers.” This is garbage, and poorly supported garbage at that. Plain and simple, multi-national corporations refuse to part with the profit motive that drew them to overseas investment in the first place, and they’d rather withdraw jobs and capital from developing countries than take even the slightest hit to their bottom line.

Incidentally, Crook’s accusation also ignores three critical ways in which corporate “codes of conduct” benefit both multi-nationals and developing countries. First, operating humane industry in developing countries does help a business’s prestige on the homefront, attracting customers. Second, setting decent wage standards for developing countries increases their purchasing power, and thus their market potential for your products. And third, workers in developing countries will benefit when their governments – in an effort to attract multi-national contracts – commit to higher labor standards.

Of course The Economist would prefer that businesses forget codes of conduct and simply adhere to a decent set of business ethics. The article uses Elaine Sternberg’s parameters of “ordinary decency” and “distributive justice” as a guideline for businesses to replace CSR with ethical behavior. Ordinary decency would prohibit companies from lying, cheating, stealing, murder, etc. Anything patently “indecent.” Crook argues that whether or not they are required to adhere to “decent” standards by law, they must do so in order to succeed. Again, that’s wrong and myopic. First of all, the ability to mask business behavior, combined with consumer indifference (we’ll pretty much buy their products unless it explicity says “We like torturing baby ducks” on the label) means that businesses can certainly conduct unethical operations and still succeed. That’s, like, a Newtonian law. Second, the structure of global capitalism allows business to work ethically while partnering with and directly funding unethical business practice. They’re covered by precedents of non-disclosure, confidentiality, or so many degrees of separation that you just can’t tell if something going on in the Honduran jungle is ethical or not. That’s why we need codes of conduct so desperately. That’s their aim – to prevent unethical business from operating under the radar by committing to investigate multi-national (and local) partnerships to ensure ethical conduct.

Okay, what about distributive justice? The article describes this as the principle of “aligning benefits within the organization to the contribution made to achieving the aims of the firm.” This principle can basically bite me, especially when it’s interpreted as a justification for merit pay and against affirmative action. In my view, the idea of distributive justice does about as much to undermine business ethics as it does to preserve it. But I’m a little shakier on this point, so don’t take my word on that because I have to admit that I have no idea what “distributive justice” is. It sounds like a Steven Segall movie.

What’s the worst thing about CSR, according to Clive Crook? Those dreaded two words: sustainable development. Don’t read this part of the article (if you’re reading it at all), because it’s horseshit. The best argument Crook can make against sustainable development is that it spreads mean, mean lies about business and makes business wait in the milk line until all the chocolate milk is gone. He calls S.D. advocates mis-informed, even though they usually aren’t – especially when it comes to things that business believes it’s not required to disclose. Crook also accuses sustainable development advocates of promoting the idea that business on its own is inherently harmful, and must be augmented with SD programs to prevent Earth from crashing into the Sun or something. It would be a lot more accurate to describe SD as an effort to minimize or eliminate the negative by-products of development. And by the way, most of the time we’re not talking about nit-picking stuff here; we’re talking about sustainable development to prevent asthma, child labor, desertification, etc.

This is rambling a little. My overall point is that the article is right, but for the wrong reasons. Of course CSR doesn’t solve many problems, if it solves anything at all. But I do dispute the claim that it does little or nothing to help people. It’s just not what we should be relying on. Like I said in the first section, corporate benevolence, even if we had to reach down their throats and drag it out, is never a substitute for substantive tax reform, social spending, and of course my personal favorite – hardcore, in-your-face, ass-kicking collective revolt of the organizing variety.

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