Quick, name an every day activity that is not somehow connected with any corporation!
Naww, come on, you can do better than that!
You kind of need shoes for that, right? Never mind. The only thing I could come up with was breathing (if you’re not an asthmatic). From sleeping to drinking water from the tap to using the toilet- e v e r y t h i n g we do is somehow connected to corporations that somehow, somewhere produce the things that are so engrained in our daily lives that we barely notice them as “products”. So, now that we cleared that up, lets talk a little more about the nature of those corporations.
The modern corporation emerged in early 19th century America, when a court ruled over the private ownership of Dartmouth College by stating that it should further on act as a “fictitious legal person, an artificial legal entity”. So, if the corporation was ruled to have the legal identity of a person what kind of personality would that person have?
I’m not the first one to claim that the modern corporation has the disordered personality of a freaking psychopath.
Judge for yourself! Here are the official criteria:
– callous unconcern for the feelings of others
– incapacity to maintain enduring relationships
– deceitfulness: repeated lying and conning others for profit
– incapacity to experience guilt
– failure to conform to social norms with respect to lawful behaviours
Psychopaths make up about 20% of the worldwide prison population, so they’re evidently considered a threat to society. Accordingly, the priority of the psychological treatment of psychopathy is to instil a functioning conscience into the patient in order to decrease the risk he or she poses to their environment. In the case of the corporation, corporate social responsibility (CSR) could be considered the equivalent to this attempt:
CSR is the artificial conscience of an institution that innately serves nothing but its own profit.
Ra-ha-ha-heally intelligent people have made a huge effort to define CSR through a static set of criteria, and transform it into a one-size-fits-all business technique. Yet, CSR seems to escape any attempt of capturing it in one theoretical framework. Instead, everybody kind of agreed that CSR is a socially constructed idea and highly context specific. It’s basically a philosophical concept in which corporations understand themselves as responsible for their impact on society and the environment.
Hm. That’s not really a standpoint on business ethics that can be taken for granted, though, is it? Rather, modern global economy builds upon good ol’ Milton Friedman’s statement that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits”.
This actually means, that CSR totally and fundamentally contradicts the priority goal of any corporation as soon as it limits its profits (which it usually does, at least on the short-term). Friedman argues further that the corporation’s manager actually doesn’t even have the right to neglect opportunities to make profit or to spend profit on altruistic purposes, because of his or her responsibility towards the stakeholders of the corporation who have a right to the maximum outcome of their respective contributions to the corporation. So, according to Friedman, corporations rightfully avoid taking up responsibility towards society and nature, if it implies limitations to their monetary gain.
In my opinion, this idea of full responsibility of the corporation towards its stakeholders is precisely what creates the political resignation about resistance and change amongst us, and reduces the chances for CSR to ever be fully implemented: corporations not only avoid taking up other responsibilities apart from making profit, but they proactively invalidate any criticism of their actions, by taking and spreading the standpoint that the economy’s interest is naturally in line with the individual’s interest.
Since economic growth is understood as the only means to secure wealth and innovation for the general society, everyone needs to make their contribution to the economy- be it as a stakeholder or as a consumer- in their own interest. Yet, this makes the interest of communities in unpolluted land, sustainable handling of common goods, and humane working conditions frequently appear as if it was contradictory to their interest in secure livelihoods.
The chronic optimism that lies within the capitalist maxim that ‘everybody can make it’, blinds people for the possibility of change and decreases the impact of their resistance when corporations externalize their costs to the disadvantage of the general public. This unrealistic suggestion of optimism about the system and pessimism about possibilities to change it, is also supported by the human tendency to underestimate long-term outcomes and rather thrive for short-term gain: it’s a human weakness that facilitates the increase of corporations’ day-to-day profit on the grounds of the short-termed pleasure of consumerism while they destroy the basis of future livelihoods against the long-term interest of everybody.
Thus, resignation and passivity towards irresponsible activities by corporations are natural by-products of the capitalist ideology.
So, what do you think, is CSR maybe just an attempt from within the system to raise the credibility of the notion that the economy’s interest equals society’s interest? I think it is and it’s deeefinitely not an attempt to change the system, commonly referred to as “the stupid system” (by me.).
I mean, just the way in which CSR is communicated makes it so damn obvious that all that the CSR movement has accomplished so far is promoting green- and bluewashing and maybe one or two saved lives and whales (Haha. Cynical joke straight from the black core of my heart. Anywayyys…)
Most CSR strategies are solely profitable, because of competitive advantages that come along with a good reputation. However, reputation and reality is not the same thing, which creates the opportunity for corporations to ‘have the cake and eat it’ by making minimum investments in CSR while still constructing an image of sustainability through their marketing campaigns. Like airlines that claim to be sustainable, when they’re really only cutting down on-board services. Haha, yea right, because the wrappers of the on-board chocolate is causing climate change (well, they probably are, but you know, big picture, right?).
So, the strongest incentive CSR holds for the ones in power whose decisions determine corporate behavior – its profitability – can be achieved without the downfall of actually investing capital into CSR. Again, the voluntary engagement in CSR is unlikely to resist the pressure of global competition on the free market.
One could even say, that the CSR movement forces corporations to become hypocrites, because honesty is not guaranteed to be rewarded, whereas green- or bluewashing the corporate image while still making maximum profits through exploitative methods holds a promise for the largest possible profit margin.
Only persistent third party monitoring that guarantees international transparency of corporate practices could remedy this flaw in the conceptualization of CSR.
Which leads to my conclusion that CSR has to be reinforced by global governance and internationally binding legal groundwork. The voluntariness of the concept is unlikely to withstand the pressure of the free market.
Trusting corporations to commit to CSR is like trusting a psychopathic patient to watch over him- or herself: he or she would be likely to hurt others and eventually him- or herself, because of a pathological lack of empathy and awareness of communal values and interests. While the managers of corporations surely don’t (all) suffer from psychopathy, the institution of the corporation clearly does. Corporations need boundaries set by society, just like patients with a psychopathic personality disorder, because they fundamentally lack in intrinsic motivation to serve anybody, but themselves and therefore pose a societal and environmental risk.
However, identifying the limitations of CSR is an important step towards adapting out-dated paradigms of local governance and jurisdiction to the modern reality of a globalized economy. Let’s take the next one, though. CSR is soooo frustrating…