Corporate social responsibility

Michael Miller contends that a free, entrepreneurial and competitive market economy is the best means to create prosperity and bring about widespread distribution of wealth. But a free economy requires private property, rule of law and free exchange. Equally important are moral virtues such as honesty, thrift, hard work, and a desire to serve others . . .

Dr. Michael Miller

Voltaire once remarked that the Holy Roman Empire was neither holy nor Roman. A similar thing could be said about the popular business ethics model of Corporate Social Responsibility (CSR): It’s neither about business nor ethics.

Popular CSR models neither appreciate the moral and social value of business nor do their emotivist and trendy schemes like environmentalism and diversity actually address the real ethical challenges and social responsibility of business in a commercial society. Yet unfortunately CSR is the dominant framework through which many business leaders think about their role in society. If we’re going to take ethics and social responsibility seriously, we need a more robust vision of business ethics.

CSR is attractive because it touches on a partial truth — businesses are not just renegade profit-making machines. But the current CSR model ends up undermining ethics because of its flawed premises. First, CSR is rooted in a relativist ethic, which is why it focuses on external projects instead of right and wrong. Second, the notion of “giving back” to society presupposes that business took something in the first place. Third, the current CSR approach boils down to little more than a transaction cost of doing business. Companies have to pay off the greens and unions, the secularists and the Catholics, the pro-aborts and the anti-aborts, etc. It ends up being more a protection racket than an ethical framework.

CSR is flawed, but what is the true social and moral responsibility of business? The rich tradition of moral theology and natural law can guide us in this regard. In a commercial society, business plays an important role in the common good and in shaping society’s norms, ethics and values. What then does an ethical and socially responsible business look like? An ethical company must be honest in its dealings, follow the laws and regulations of the state and, beyond that, the moral law. Employers must also treat their workers with respect, pay fairly, provide a safe working environment, allow employees ample time to spend with their families and to rest and worship God.

Other duties include helping to maintain a just, free and competitive market economy that enables new entrepreneurs to compete — even at the expense of losing market share. This is a challenge especially when businesses grow and begin to have more access to state and federal regulators. Business people tend to like competition when they are small and have no political connections, but once they become bigger it’s important to resist the temptation to shift the market unfairly in their favor.

Businesses also have the responsibility to help maintain and develop a moral ecology that encourages virtue. Marketing and advertising do more than just sell products, they create and influence culture, attitudes, habits, beliefs and standards. Business leaders need to be responsible with this power and not engage in campaigns that resort to vulgar or sexual imagery; that undermine family life or parental authority; that mock the good, the true, and the beautiful; or that take advantage of children.

In Born to Buy, Juliet Schor documents the billions spent on marketing to children with the goal of turning them into consumers at the expense of family life and their social and mental health. A consumer society is not the same thing as a free economy, and those of us who appreciate the benefits of a market economy must resist consumerist culture. Consumerism not only hinders human flourishing, it will eventually undermine the free economy.

The following are some examples of real “social responsibility” that are more difficult than giving money to the latest green fad. It might mean a loss of profit, especially in the short term. But it can be done. For example, Omni Hotels decided in 1999 that it would no longer make porn available at its hotels. A spokesman called it a “moral decision,” recognizing that porn is a moral evil that exploits women and has disastrous effects on men. In the end, Omni ended up attracting religious gatherings from the likes of Billy Graham Ministries, TD Jakes and others.

A free, entrepreneurial and competitive market economy is the best means to create prosperity and bring about widespread distribution of wealth. But a free economy does not just pop out of nowhere. It requires a certain institutional and cultural framework — private property, rule of law and free exchange. Equally important, however, are moral virtues such as honesty, thrift, hard work, delayed gratification, long-term thinking, and a desire to serve others beyond mere economic exchange. Free economies also require certain kinds of people. A society of rational maximizers concerned only with making a profit — or stupefying others through porn and vulgarity — lacks the character and virtue to sustain a market.

Business leaders cannot save the world. Only Jesus can do that. But in its own sphere of the market, business plays a key role in shaping culture. Business leaders need to decide whether they want to take the easy road and promote the latest social trend or whether they will accept their real social and moral responsibility. A lot more than they realize rests on their decision.

Michael Miller is the Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.