I started this thread by rather sneeringly quoting Friedman so perhaps I should respond.
Arthur wrote: > [Mike Spencer quoted Friedman as saying:] > > Few trends could so thoroughly undermine the very foundations > of our free society as the acceptance by corporate officials of > a social responsibility other than to make as much money for > their stockholders as possible. -- Milton Friedman > > It's the function of the corp. to make profits and pay taxes, it's the > function of the govt. to set the ground rules of the game and use the taxes > to meet social needs. Govts are elected; corporations are not. When corps > begin to decide "social responsibility" then clearly they may have their > own unelected agenda. When I buy Proctor and Gamble or Kellogs or Kraft > products I really don't want them deciding social responsibility. Just turn > out a quality product, pay taxes and treat the workers in a fair manner. > The govt. can and should do the rest. So I agree with Milton. Arthur, I can't agree more that corporations shouldn't arrogate to themselves the authority and responsibility to fix everything. But that notion misses the point. We have a reasonable expectation of natural persons that they will be socially responsible, that they will have some awareness of their own mortality, some empathy albeit based on self interest. We know that there is a more or less normal distribution (in the technical sense) of these and other human qualities as well as outliers -- serious personality disorders, madmen and those variously bent. Nevertheless, except for the outliers and those out in the tails of the distributions, people have more or less of numerous positive human qualities which serve to temper the numerous harmful ones. Law, tradition, custom and other human institutions such as politics and trade tacitly assume this. Michael Gurstein says: > Anyway, we expect people as citizens and bureaucrats in governments > to act ethically, why not those working in corporations... An anecdote: I once groused to my father-in-law (then CFO at Springfield College) about corporations. He somewhat condescendingly replied, "Corporations are just made up of people." True. How, then, can corporations be as un-people-like as they are? The corporate entity has no human qualities. Friedman's assertion is to this degree correct, that the corporation is an artificial structure, intentionally designed such that greed is its only motivation and obedience to the letter of the law its only constraint. I have not been the only person to point out that this results, both essentially and effectively, in a synthetic psychopath -- "antisocial personality disorder" if you read the DSM IV -- of a purity and singleness of focus hardly attainable by a disordered natural person. The corporate structure itself is mandated to be a psychopath. This fact creates a permanent and unrelenting bias, exerts an unrelenting force on all the natural people of which corporate entity is composed. The well-known phenomenon of "corporate culture" varies from instance to instance due to various factors -- strong founders, other strong personalities, fortuitous position in time or within an industry, a host of other fortuitous or happenstance factors. But the bias to psychopathy is always there in any corporation that falls within the domain of Friedman's remark. The single constraint -- the letter of the law -- is, for natural persons, a serious barrier to flamboyant abuse and exploitation of every- or anyone else by an individual human. For a corporation (a large one: we're not talking incorporated mom & pop family businesses here) any legal barrier to a purpose can be subjected to an assault impossible for an individual. A team of highly paid, bright and ambitious lawyers, psychiatrists, sociologists, Bernays-clone PR people, lobbyists, economists, statisticians, political analysts etc. can be assigned to find a method for doing what the law forbids in a way that is, by the letter of (a vast and complex mare's nest of) the law, at least arguably not culpable. The white paper they produce becomes the ethical standard and it becomesthe working blueprint funded by enormous corporate resources. So far from wanting corporation to originate plans to "care for the commons or gen'l populace", we must demand simply that they act in accordance with the common good. If Joe Weasel (or even Lord Conrad of Crosspatch :-) rips off a few million bucks, we recover as much, in restitution, as possible. Then we put him (if we're very lucky) in prison for ten years. That takes away maybe 20% of his adult life, deprives him of opportunity for crime or business or employment. It deprives his friends, colleagues and family of his company and support. Suppose that, when a corporation perpetrates a similar rip-off, we don't just fine it an amount that it probably had in the contingency planning kitty to begin with: We suspend its charter and close its operations for a decade. Well, say all to many people, we can't do that because it would harm the shareholders. Well, too bad for the shareholders, just as it's too bad for Joe Weasel's family. Joe's little kids will grow up without a Weasel Daddy while he's in prison, his wife will have to work, his college room mate who invested in his little biz will lose money. Does Joe get out of jail free on that account? No. After Bhopal, the CEO -- Anderson? -- was said to have expressed humility and mortification and to have accepted responsibility. One might have expected im to spend the rest of his life in sack cloth and ashed. That may well have been unfeigned but before long, it was business as usual again. The inexorable corporate bias to psychopathic self-interest was just too much. We should have expected that the corporation take every possible precaution to prevent such a disaster, no matter how costly to the shareholders. In the aftermath, we should have demanded the death penalty for Union Carbide. That might have meant simply terminating the company or, better, putting it under the control of a bankruptcy master and devoting all its PBDIT to remediation. Forever. So no, we don't want corporations to take over social welfare. We want, or should want if we're paying attention, to hold corporations to a standard of social responsibility that is far higher than we that to which we hold individuals, a standard commensurate with their wealth, assets, experetise and power. That would, indeed, undermine the insane frenzies of bettors in the financial casino -- finance as it is done today -- but it would not undermine, as Friedman thought, a free society. Shareholders should know that investing in a company whose operations threatens (or potentially threatens) the public good is an unacceptable risk unless the company evinces exceptional, transparent and convincing efforts to ensure that it does, indeed, adhere to such an elevated standard of social responsibility. I have more to say on this but I should probably stop here, except to comment on Steve Kurtz' note: > I agree with Arthur. Corps. are built to make profits, not to care for > the commons or gen'l populace. See this new piece by Jay Hanson: > > http://www.warsocialism.com/America.htm Jay Hanson wants to put corporations in what every contemporary investor, executive and biz person would call a straight-jacket, chains and a padded cell. I agree with Arthur, too, that they "are built to make profits, not to care for the commons or gen'l populace." The issue is whether that should be be so or should be allowed to continue to be so. - Mike -- Michael Spencer Nova Scotia, Canada .~. /V\ [email protected] /( )\ http://home.tallships.ca/mspencer/ ^^-^^ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
