Why corporate social responsibility is BS
While big corporations tell Americans how virtuous they are, they lobby up a storm against Biden’s social policy bill
Last modified on Mon 27 Sep 2021 09.46 EDT
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
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"In recent years, “corporate social responsibility” has been viewed by some as the answer to the multiple failings of capitalism. Chief executives have responded to all sorts of problems – worsening climate change, widening inequality, soaring healthcare costs and so on – by promising their corporations will lead the way to solutions because they’re committed to being “socially responsible”.
Ninety-eight percent of this is rubbish. CEOs won’t do anything that hurts their bottom lines. They’re in the business of making as much money as possible, not solving social problems.
In fact, real social change would prevent them from doing many of the hugely profitable things they now do. Which means they won’t change their ways unless they’re required by law to change (and even then, only when the penalty times the probability of getting caught is higher than the profits from continuing anyway). Their soothing promises of social responsibility are intended to forestall such laws.
I’ve seen this repeatedly. When I was secretary of labor, big corporations would violate laws on worker safety, wages and hours and pensions, whenever doing so was cheaper than obeying the laws. And they’d fight like hell against such laws to begin with – all the while telling the public what wonderful citizens they were.
You may recall that in August 2019, the Business Roundtable – one of Washington’s most prestigious corporate groups, on whose board sit the CEOs of Apple, Walmart and JPMorgan – issued a widely publicized statement expressing “a fundamental commitment” to the wellbeing of “all of our stakeholders” (emphasis in the original), including their employees, communities and the environment.
The statement was widely hailed as marking a new era of corporate social responsibility.
Since then, the Roundtable and its members have issued a continuous stream of jejune statements about their dedication to such things as providing childcare, pre-K and affordable healthcare, promoting community college and workforce training, alleviating poverty and reversing climate change.
It turns out these are exactly the priorities in Joe Biden’s $3.5tn reconciliation bill.
But guess what? The Business Roundtable isn’t lobbying for the bill. It’s lobbying intensely against it.
> Jessica Boulanger, a spokeswoman, told the Washington Post the Roundtable is engaged in “a significant, multifaceted campaign” to stop tax increases that would finance the bill, and will “continue to ramp up our efforts in the coming weeks”. The group is launching a seven-figure digital advertising campaign to oppose the bill.
Hypocrisy? Only if you believed the Roundtable BS about corporate social responsibility. If you know the truth – that corporations will do whatever they can to maximize their profits and share values, social responsibility be damned – there’s nothing surprising here.
Why didn’t business groups fight the president’s infrastructure bill? Because government spending on infrastructure helps their bottom lines by lowering their costs of procuring supplies and getting goods to market. Social responsibility had nothing to do with it.
It’s tempting to chalk all this up to “corporate greed”. But that makes sense only if you think corporations are capable of emotions, such as greed. They’re not. Corporations aren’t people, no matter what the supreme court says. They’re bundles of contracts.
> The specific people who enter those contracts (on behalf of big corporations as well as thousands of people who run vast investment funds on behalf of millions of shareholders) are neither greedy nor socially responsible. They’re merely doing what they understand to be their jobs . . .
Corporate spokespeople like Boulanger of the Business Roundtable – along with platoons of corporate lobbyists and influence peddlers, corporate lawyers and hired-gun economists, corporate political operatives and PR flaks – together form in effect a fourth branch of government, wielding huge and increasing power. About one out of every four people now working in downtown Washington fills one of these roles. . ."
READ MORE > Robert Reich. the Guardian
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