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In a previous life, I once was an assistant professor in the business college of a western University. I taught primarily commercial law to undergraduates and to MBA candidates, but I was also tasked with teaching an MBA course in “Corporate Social Responsibility.” I know – it sounds like an oxymoron, and it did to me too – even back then.

However, it was the era of youthful idealism and activism – the heyday of the anti-war movement and protests against racism and the excesses of capitalism – the counterculture as it was called.

Okay, to come clean, when I started teaching, it was 1970.

The decade of the 1960's had produced a number of scholarly works advocating the notion that business executives should base their decisions not merely on the perceived near-term advantage to the firm, but also on what might be considered its long-term advantage afforded by a healthy society, viable and stable suppliers, and even a stable and contented work force. The concept might be cast as enlightened, long-term self interest, even at the expense of some immediate maximized return.

There was plenty of push-back against the “social responsibility” movement – if it could be called that. His eminence Milton Friedman opined that the corporation's only responsibility was to maximize the return to shareholders while acting within the law. One of the most infamous rebuttals was delivered by one Albert Z. Carr, who analogized the business world to a poker table – an activity in which bluffing, i.e., lying, is permissible and expected.

Not to beat the weathered bones of a long deceased equine, but the analogy is simply grotesque. For openers, one can refuse to play poker, one can walk away at any time, and the operators of a rigged game are subject to civil and criminal penalties. None of that applies to the current business scene. But I digress.

There weren't any textbooks available for my course, so I made do with various articles and essays from a number of sources. We had some lively class discussions, but I let my students know they could pretty well forget the class once they were out in the business world.

Then, of course, came the first OPEC oil shock and the ensuing recession. Soon the hippie wannabes were trading in their bell bottoms and teeshirts for suits and ties, and Ayn Rand's philosophy of “hooray for me and fuck you” became pretty much the order of the day. Gordon Gekko's brand of ethics became the prevailing business ethical paradigm.

After four years, I left academia – OK, I was invited to leave having failed to publish – and found a home in a state utility regulatory agency.

Later on, the electorate having bought into the Great Prevaricator's assertion that Government was the problem, we went through a paroxysm of deregulation, one of the first casualties being the Savings and Loan industry, the greed of who's executives and owners effectively imploded it. That was followed by the Enron scandal and a number of others with the crescendo in 2007 of the investment banks' CDO debacle threatening to blow up the whole system.

Concurrently, the working middle class was effectively eliminated through exporting jobs, breaking unions, and holding wages steady while purchasing power shrank. A 2011 Congressional Budget Office (CBO) study found that between 1979 and 2007, income of households in the top 1 percent of earners grew by 275%; earnings grew 65% for the next 19 percent; just under 40% for the next 60 percent; and 18% for the bottom twenty percent of households. Yet most of that top 1% seem to see themselves as heroic “job creators.”

Throughout the whole period of wretched excess and destruction of the middle class, I was unable to detect an echo of the concern with social responsibility with which the '70's had begun. So it was with some pleasant surprise that recently, checking out the current course catalog of my former employer, I found the business college was still offering an MBA course in business ethics and social responsibility. My happy wonderment dimmed considerably when further investigation revealed it was only a two-credit elective offered once a year at a relatively isolated satellite campus. It appears to me that the course is a useless curiosity, like the human appendix.

The demise of the social responsibility concept is indeed a pity. If ever there was a time for a kinder, gentler capitalism, it certainly is now. But I see little sign that the captains of industry recognize the peril they, and we, are facing.

The oil barons and their sycophants in the media continue to trumpet the fairy tale that we're on the cusp of a new oil boom while ignoring the fact that production has remained essentially flat for a decade and prices continue to hover around $100 per barrel. This should signal that we've reached a limit, and it's time to wean ourselves off of the stuff. But that would look bad on the next quarterly report, so just kick the can on down the road.

The evidence continues to mount that global warming is real, and it's going to cause literal hell if we don't do something to put on the brakes on the amount of CO2 we're pumping into the atmosphere. But the CO2 producers fight new regulations tooth and nail and continue to sow uncertainty and doubt in order to paralyze any attempt to take meaningful action. In the meantime the oceans continue to rise and acidify, weather events become more and more extreme, and a catastrophic tipping point looms nearer.

So if there ever was a time when the “job creators” (and their pet apologists, i.e., neo-liberal economists) needed to take a fresh look at the world they control, it is now. Their financial virtual world is only sustained by a real world subject to natural physical laws which they ignore just as much at their own peril, as at the peril of the rest of us.

It's time the present brand of capitalism was recognized for what it is – a world-devouring system which is stifling everything in its shit. How it could be reformed, or replaced, is the crucial question we face. I have no answer, and perhaps there is none. But I do know the only persons with the resources and power to seek and implement change are those same “job creators.” So it's high time the notion of social responsibility was revived. It really would be in the long-term interest of the one-percenters. If they continue to fail to recognize that long-term interest, their failure will doom them – and the rest of us.

Originally posted to The Curmudgeon's Two Cents on Tue Jan 21, 2014 at 01:36 PM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  Bob - I think the Revlon rule has had an impact (4+ / 0-)
    Recommended by:
    kurt, radarlady, mungley, Einsteinia

    While the Revlon rule applies only to a narrow set of circumstances I think that it has been extrapolated by the boards of public companies such that all decisions are viewed exclusively through the prism of what is in the long term best interest of shareholders. While a few states offer corporate laws that allow officers and directors to view decisions based on all the stake holders of a company, shareholders, employees, suppliers and communities to name a few, most public companies are incorporated in Delaware or in states that follow Delaware precedent.

    Here is a link to the Revlon case:

    http://en.wikipedia.org/....

    "let's talk about that"

    by VClib on Tue Jan 21, 2014 at 01:56:12 PM PST

    •  Companies can also make social responsibility (1+ / 0-)
      Recommended by:
      commonmass

      or betterment f the employee's lives part of their mission statement.
      That way the board can be told, "Look here, we are supposed to think beyond the next dividend check."

      I ain't often right, but I've never been wrong. Seldom turns out the way it does in this song.

      by mungley on Wed Jan 22, 2014 at 07:50:51 AM PST

      [ Parent ]

      •  Surely, companies can be very socially responsible (1+ / 0-)
        Recommended by:
        Jon Sitzman

        and often big companies make very visible investments in their home town arts and social welfare programs and facilities. But I think we are seeing less of that. I recall when I was a college student, more than 40 years ago, reading an article outlining the case against corporate social responsibility (CSR) and there is an active debate on the topic today in the business media. Google brings up numerous current articles.

        I think employee engagement is very different that broader community focused social responsibility. I think executives today fear that if a corporation funded an expensive art museum, or music hall, that shareholders would think the money could have been better spent on company activities, or dividends.

        "let's talk about that"

        by VClib on Wed Jan 22, 2014 at 09:19:42 AM PST

        [ Parent ]

    •  No, that article needs to be written ... (0+ / 0-)
      •  delver - not sure what you mean? (0+ / 0-)

        "let's talk about that"

        by VClib on Wed Jan 22, 2014 at 09:20:05 AM PST

        [ Parent ]

      •  This is all bullshit, I fear (1+ / 0-)
        Recommended by:
        alice kleeman

        They KNOW they're ruining our country, our planet, and the lives of the lower... 98% or so. There is something deeply and profoundly wrong with the socialization of the kids of "the elites" and how if middle-class kids want to "succeed", it become necessary for them to override whatever morals they might have started with and crank up their own sociopathology to "win."

        Those of us normies with children in public schools know the huge emphasis that's put on teamwork and helping the slower kids along... meanwhile, what ARE they teaching the kids at the elite's private prep schools?

        "Hoo-boy! Have we ever got a crop of obedient little lackeys coming up!" To fold spindle & mutilate at will, affluenza indeed. I read some horrible factoid about the vast majority of college students polled in the 1970's wanted a meaningful, responsible life, and 97% of them polled recently put being financially VERY well-off at the top of the list. And of course it was slanted, "newsy", alarmist etc, say it's only half true. So the Big Rich Piggie mentality has only destroyed half of middle class kids.

        Living on a planet that can reliably, comfortably support perhaps two billion people.... in a country who's astonishing bursts of growth were fueled by the theft of solar energy stored over two million years, conveniently called "oil" and stripped from underneath  a couple of billion peasants who had NO say whatsoever about it....

        And now all the little kids in Africa & South America & India & China have seen American TV, where everyone has their own car, house, Friends who never have to work for a living, the streets are paved with gold... did you notice how fast the praise for the success of George Bush's "Spreading Democracy" meme dried up, when the obvious end game is us paying $10 for a gallon of "Democratic" Saudi Arabian oil?

        Besides curing our little problem of sociopathic corporate "leadership" we do have to deal with US TOO - what are YOU willing to give up? No more air conditioning, no more domestic air traffic (the ASTONISHING waste - how many po' people's cars would run for how many YEARS on the gas in one 737?)  There is nothing pretty coming around the bend - so you better GET RICH QUICK so you can hide in the Caymans when even Americans start "rioting" for food*.

        *(It's a march & event when Tea Partiers party, and a disturbance or riot when Occupiers occupy).

    •  We need to REQUIRE corporate charters (1+ / 0-)
      Recommended by:
      tofumagoo

      PROVE they are putting their workers and environment BEFORE profits.  To wear the corporate veil confers immunity from liability that mere "people" do not have and for that privilege they need to provide to their respective communities.

      Delaware is the home for ALL corporations because it no longer requires anything of these corporations.  Let's make a federal rule that ensures WE THE PEOPLE are put before profiteers!

      We can have a thriving economy based on what is good for the BIG PICTURE--not the 1%!

      Separation of Church and State AND Corporation

      by Einsteinia on Wed Jan 22, 2014 at 11:16:29 AM PST

      [ Parent ]

      •  Given that corporations are state chartered (0+ / 0-)

        I am not sure what Congress can do. Incorporation has never been a federal responsibility. Delaware is home to half the public companies in the US and certainly less than 20% of all corporations in the US. The reason that Delaware is such a popular place for public companies is the body of corporate law and the special court system designed for the speedy resolution of conflicts between companies. Most other states follow Delaware in regard to what they require, or don't require, for incorporation.

        "let's talk about that"

        by VClib on Wed Jan 22, 2014 at 11:58:00 AM PST

        [ Parent ]

        •  This can be changed and must be changed (1+ / 0-)
          Recommended by:
          JerryNA

          lest the states that confer the least protection have the majority of the charters.  

          If companies want to do business outside of the state of their charter, than can and must be changes on a federal level or we're never going to gain control of this plutocracy.

          Separation of Church and State AND Corporation

          by Einsteinia on Wed Jan 22, 2014 at 02:23:12 PM PST

          [ Parent ]

          •  Einsteinia - that would require an entire body (0+ / 0-)

            of federal corporate law where none exists today. I don't think that there are 100 members of the House who would be willing to see the federal government take on such a task and maybe fewer who see the merits.

            Delaware isn't the favorite home because they offer more or less protection to either corporations or their investors it's because they have developed a body of corporate law that lawyers in all 50 states, representing competing constituencies, think is reasonable.  As I also noted Delaware has a special court system for speedy resolution of disputes between companies, another benefit.

            What I would propose, and at some point will do a diary on this, is just to have Delaware change its laws so that officers and directors could have legal protection to make decisions based on a broader group of stakeholders including shareholders, employees, customer, suppliers and communities. Some states, such as Indiana, have corporate laws that have these provisions. If Delaware adopted them I think it could change the behavior of many public companies. Officers and directors make many decisions out of fear of being sued by shareholders.

            "let's talk about that"

            by VClib on Wed Jan 22, 2014 at 05:44:11 PM PST

            [ Parent ]

            •  Yes, I would love to read a diary on your take. (2+ / 0-)
              Recommended by:
              VClib, Capt Crunch

              I am asserting that WE THE PEOPLE make the rules and when they no longer work for US, we can change them.

              But, I absolutely hear you that this is not a practical solution.

              Yet, I am not alone.  Tom Hartmann asserts the corporate charters are a privilege and that we used to have the "corporate death penalty," which revoked the charter when the corporation no longer served the common good.  Similarly, Howard Dean has said corporations are neither good nor bad--they are like hockey teams that need strong rules.

              Right now we have a deplorable situation where most corporation are chartered out of Delaware because they have the least requirements of corporations.  And corporations have charters that REQUIRE they put profits for shareholders above any other considerations, e.g., workers' health, living wage, environmental protections.

              If we cannot force a federal corporation baseline charter that can revoke the privilege when its first priority is not for WE THE PEOPLE, then WE CAN make state specific requirements that corporations that wish to sell to our citizens meet OUR requirements of good business practices.

              Again, the invincible corporation veil is a privilege not a right.

              Separation of Church and State AND Corporation

              by Einsteinia on Wed Jan 22, 2014 at 09:26:24 PM PST

              [ Parent ]

  •  The "Invisible Hand" needs to be replaced (15+ / 0-)

    by the "Visible Foot".  Republicans and neo-liberals need to be kicked out of office.  Then maybe some serious re-invention of our economy and culture can take place.

    As an aside, raw unfettered capitalism is played as a zero-sum game, with workers' wages and the environment being the losers at the present time.  We need to frame the future economy and culture as a non-zero sum enterprise, with something in it for everyone.

    An illusion can never be destroyed directly... SK.

    by Thomas Twinnings on Tue Jan 21, 2014 at 02:02:06 PM PST

  •  Only three comments? (9+ / 0-)

    It ain't about ethics, or the values of ordinary people. Simple fact is that trillions of dollars of wealth has simply overwhelmed democracy. How can ordinary people contain the messaging potential of a trillion dollars?

    And, a lot of people assume there is no hope. We are living in the apocalypse of zombie ideas.

    Peace, Love, and Prosperity. See more on the R. Crosby Lyles channel on YouTube.

    by Rich Lyles on Wed Jan 22, 2014 at 01:02:02 AM PST

  •  Thanks for a great Article (5+ / 0-)
    Recommended by:
    marykk, radarlady, commonmass, Gorette, alx9090

    No real comment - other than I appreciate this  very interesting an thoughtful article.
    Thanks

  •  Most of this (9+ / 0-)

    is the result of allowing the wealthy to purchase the government through the twin mechanisms of campaign finance and the revolving door that gives cushy corporate jobs to former "public servants" who loyally served the right segment of the public while in office.

    We either change the system to disallow bribing politicians, or continue as we are until the peasants have had enough, and the pitchforks come out.

    "A lie is not the other side of a story; it's just a lie."

    by happy camper on Wed Jan 22, 2014 at 06:15:07 AM PST

  •  Loss of social cohesion is widespread. (2+ / 0-)
    Recommended by:
    Jon Sitzman, JerryNA

    The lack of public investment is just catching up.  

    Should we be surprised that the wealthy are disconnecting from the wider community?  You see it in a lot of different ways; even in little things like purchasing whole-house generators rather than investing in reliable infrastructure.  

    And, I think right now we have a perfect storm when gullible people have been taught to be consumers; where the logo is everything regardless of manufacturing origin, where everything, education included, is seen as a consumer choice, where, even more so than in the past, ignorant opinion is traded on par with knowledge.  There is even a measure for The Community Loss Index.  

    Yet, we also must consider that the manner in which the wealthy isolate themselves is also used against us.  Fear of the other and well-funded police departments in a justice system that is biased against the 90% help maintain their control.  And, nationalism along with a fawning regard for vets plays into their disengagement since military service is for the expendable masses, not for the progeny of wealth and privilege.

    All of this leaves me wondering when the great dissolution will happen?  When will those who are so disadvantaged by having a nation whose governance is geared to only the wealthy refuse to be productive members of a community that has rejected them?

    For me, having worked in Asia starting in the 80's I noticed the virulently selfish familialism of those cultures.  A greed that placed no value upon public well being.  We are become that.

  •  You Would Have Not Believed Morn Joe Yesterday (4+ / 0-)

    Sometimes I think Joe is bi-polar. Yesterday he sounded like the biggest progressive you could imagine.

    Said that income inequality was the big issue of our time. (A chart showed that the US is the #1 country in terms of a widening income gap.)

    To the diarist's point, he asked whatever happened to social responsibility of people and corporations. He even went on to say that people who shelter their money in havens like the Caymans were not welcome in this country.

    He railed against rich people who were paying only 15% on their income taxes

    My wife and I looked at each other slacked-jawed.  

  •  yes! thanks for your diary...... (2+ / 0-)
    Recommended by:
    divineorder, JerryNA

    We should push for this:

    long-term advantage afforded by a healthy society, viable and stable suppliers, and even a stable and contented work force. The concept might be cast as enlightened, long-term self interest, even at the expense of some immediate maximized return.
    America criticized the Soviets and communism for not having a moral core, but capitalism has none... as practiced and protected here.

    "extreme concentration of income is incompatible with real democracy.... the truth is that the whole nature of our society is at stake." Paul Krugman

    by Gorette on Wed Jan 22, 2014 at 11:41:12 AM PST

  •  rambling ahead - don't blame me if you read it (0+ / 0-)

    Probably you should do yourself a favor, and just ignore this as I considered deleting this, long, hard, and seriously. The tone of this diary, or at least how it rang to my ear, resonated a little too strongly with the questions I've been asking myself of the state of things lately and with the general mood I desperately try to disavow day to day on this planet.  

    I overheard a friend of mine talking to a "self made" banker, regarding people starving. The banker, when pinned down, stated that it was ok to let people die so long as he didn't have to see it or hear about it, but mostly see it.

    This is a man who, thru family influence with the Governor, was able to get a job in the banking industry and end up wealthy. A man who has no motive for the acquisition of wealth, except the acquisition of wealth. How do you suppose you can put a concept of "social responsibility" into that?

    We pretend we're going to change things with marches, and protests, and campaigns. In other countries, they can, generally after burning down something, but here? In America? Against inequality and social irresponsibility of the new aristocracy? It's hard to imagine it happening nationally, though I often do/hope.

     The moneyed man has the ear of power, the game rigged to his advantage, and the use of force on his side. With the surfs, and surfs is in my opinion the only term that seems to fit, apathy has settled in, no not apathy, rather it's a sense of identity derived from "working hard" for poverty level wages, without days off, without healthcare, without their children having basic necessities, and why? Because it's the American way to work hard and make something, and fuck you commie if you think I'm going to give money to your government welfare machine. Hell, we've all seen poor people advocating for enrichment of the aristocracy. The serfs trying to kill the Leninist because they slander the czar. Not that we're Leninist, it's an analogy after-all.

    How do we address that as a state, a nation, a people? Do we just wait for the boomers/gen-xers/whatever to die out? To let time winnow down as we marshal ourselves into a state where we can become, thru sheer force of numbers, enough of a threat to break thru the apathy of the aristocracy and the capital class?
    The latter is infinitely preferable, since as you show these outlooks aren't because of one generation, and nor are the solutions going to come from only one place.

    I suppose I'm just rambling, as I did warn you in the subject, about the trepidation I, and I daresay many others, feel about right now. This isn't a time of hope for many people in the world, it's a time of hardship. Hardship that is often blamed downward, on those who suffer more and have less, on "the other."

    I know a bit of history, and I know what happens when countries are built like this one currently is. War. I know what happens when people see a cliff coming, one they could avoid if only they stopped. They go over, consistently, eyes wide open, shrugging because that's how the game is played. What hope of victory do we really have over what seems to be an inherent trait in the species, given it's seeming eternal recurrence?

    I don't have any real answers. The ones that my natural inclinations bubble out on how to break thru the indolence of the aristocracy are repellant, probably unrealistic, and ultimately unworthy of the war we wage.
    I don't know how to win a war against the mindset of the strangers, nor do I know how to be uplifting to others who fight to do the same. Some days in this seeming endless hand to mouth struggle, hope seems more like a disease. Still, we aren't beaten in this sometimes seemingly hopeless war, just discouraged. In the words of Nixon, "You're only defeated when you quit."

    Nicht durch Zorn, sondern durch Lachen tödtet man. ~Nietzsche

    by somewierdguy on Wed Jan 22, 2014 at 05:14:17 PM PST

  •  I thought corportations... (0+ / 0-)

    aren't people?! How can you expect a non-person to be socially responsible?  Responsibility is a human trait.

  •  Flesh this out? (0+ / 0-)

    Wondering if the diarist would flesh this out a bit:

    "Then, of course, came the first OPEC oil shock and the ensuing recession. Soon the hippie wannabes were trading in their bell bottoms and teeshirts for suits and ties, and Ayn Rand's philosophy of “hooray for me and fuck you” became pretty much the order of the day."

    I've never come across a linkage of the 1973 oil crisis, the recession, and the demise of the 60s counterculture.

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