I am an unabashed fan of President Calvin Coolidge because he was not afraid to say that, “the business of America is business.” He should have added that the business of business is to maximize profits because lately, many corporate executives have lost sight of that fundamental principle.
Like lemmings marching toward a nearby cliff, many business leaders are blindly embracing Corporate Social Responsibility (CSR), the doctrine du jour of activist nannies who are seeking to usurp political authority by setting themselves up as private regulators – all for the purpose of dictating how the rest of us live our lives.
At its nub, the activist-inspired CSR movement represents the convergence of two seemingly discordant political doctrines – corporate socialization and the privatization of regulation. With that in mind, Gary Johns, a one-time Australian Labor Party MP turned NGO watchdog, describes CSR as “a left-wing conspiracy dressed up as a right-wing conspiracy.” Perhaps this accounts for the whacky response to CSR by some in the business community.
For example, JPMorgan Chase created an Office of Social Responsibility this past June. The company’s new CSR czar, William M. Daley, stated: “JPMorgan is committed to serving our communities, protecting our environment, and working with government and other leaders in support of sound, thoughtful public policy. But we can do more, and I look forward to leading this effort to take our firm to the next level in developing and executing a comprehensive and coordinated Social Responsibility strategy and set of initiatives.”
I would bet good money that if the company’s namesake, Jack Pierpoint Morgan, was still alive and heard Daley’s statement, he would personally throw Daley over the nearest cliff.
In addition to the CSR lemmings, there are two other types of business leaders who preach the gospel of corporate socialism. They include those who believe CSR represents a public relations opportunity that companies can exploit for the sake of getting the activists off their backs. They are modern-day Neville Chamberlains; appeasement artists who believe that the Holy Grail of successful business management is good PR.
What do you suppose motivated the CBS Corporation to release its first Social Responsibility Report in July? Leslie Moonves, President and CEO of CBS, noted in releasing the report that, “The combined assets and reach of our Company provide us with a unique ability to serve the common good, and we’re committed to doing so.” This is from the same company that is bringing us Kid Nation.
The third group of business executives who support the CSR movement do so because they can afford to, and they believe their competition either cannot pay the price of admission to the CSR cult, or are unwilling to genuflect to the activists when they show up for tribute. One would think that these corporate chieftains never met a whale they did not want to save – never met a tree they did not want to hug. But their real motive is to exploit CSR to achieve an artificial advantage over the competition. They are not lemmings or appeasers. They are good old-fashioned piranhas.
Fortunately, there are still some corporate warriors who understand that businesses do not have social responsibilities; only people do. And, inasmuch as corporate leaders work for shareholders, their responsibility is to pursue the best interests of those investors – interests that relate primarily to making as much money as possible while complying with the laws, regulations and ethical norms of society.
Regrettably, millions, if not billions, of corporate dollars are now being diverted from investors and redistributed elsewhere by this unholy alliance between corporate managers and activist groups who are accountable to no one but themselves. After all, Mother Earth did not go to the polls to cast her vote for Greenpeace, and the peoples of Africa, Asia and South America have not appointed Oxfam their official representative when it comes to economic development, workers’ rights, health and safety and the environment.
I often wonder how the millions of people who have died from malaria would have voted if they had been given the chance to elect or reject the activist groups who systematically denied them access to mosquito-killing pesticides because they know what’s best for indigenous people. Or, how about the people who have been denied the benefits of running water, electric power, modern agriculture and, yes, the revenues from natural resources because these things just did not fit into the activists’ concept of sustainability and social responsibility? How would they vote if they had a choice?
The net-net of this spectacularly undemocratic process called CSR is that the activists are being aided and abetted by some business executives in their efforts to dictate business policies and expenditures based on their vision of what is sustainable, equitable and fair for the rest of us.
The solution to the CSR threat is actually pretty simple. What shareholders need are facts; facts about how their investments are being shanghaied by the CSR movement to undermine free enterprise and promote corporate socialism. This is the fact-based advocacy employed by the Free Enterprise Action Fund (FEAF), which uses its status as an institutional shareholder to “inform and persuade companies to focus on increasing shareholder value and profits rather than vainly trying to appease outside activists.”
Winston Churchill once observed that, “Socialism is a philosophy of failure, the creed of ignorance and the gospel of envy, its inherent virtue is the equal sharing of misery.” Given the choice between Neville Chamberlain’s values and those embraced by Winston Churchill, the question becomes who among our business leaders will have the intestinal fortitude to choose Churchill?
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins