Comments on Capitalism vs. Corporate Social Responsibility

One thing I love about the blogosphere is the ability to engage in dialogue with the writers the world over. I often leave comments on posts, both in favor of or vehemently opposed to the subject matter being discussed. And sometimes, those comments seem to flow and write themselves.

This post is so I can capture one of those comments. I started writing and just kept writing, and it’s one of those comments I really enjoyed writing and don’t want to lose.

The comments are in response to an article by Dr. Wayne Visser entitled Is Greed Still Good? My response to Dr. Visser is below:

Dr. Visser,

This is an excellent post, and you so very eloquently – and fairly – stated your thoughts about the subject.

In business school, I was taught the first goal of a large business is to maximize profits. I believe the moral guidance system of capitalism begins with letting go of this maxim. It is essential for businesses to be profitable in order to survive, but what we’ve seen lately in our business culture is, ironically, a ‘profits at all costs’ mentality. Does it make sense on a balance sheet to incur costs that can be lowered or otherwise eliminated? No. Does it make sense to incur these costs if it means recycling the currency within your own economy (i.e. NOT outsourcing) or protecting the environment (i.e. NOT dumping hazardous materials into a body of water)? Absolutely.

Our current commercial culture is so focused on profits, we lose sight of the programs and safeguards that have been implemented to benefit the greater good. I am sure nuclear power plants can realize greater profits if they didn’t have to deal with the cost of storing spent nuclear rods. Yet, the common sense that prevents them from simply dumping those rods in our oceans is the same common sense we need driving the vehicle that is capitalism. There needs to be a function incorporated into the valuation of stock that dictates companies that employ practices of social responsibility – that carry additional costs because doing so benefits their community, their nation, or the planet – are more valuable to investors than those companies that do not.

People are driven to work based on that against which they are measured. It is, as you mention, greed in motion. If your bonus is determined by how much you sell, you will work to sell as much as you can. The current reward system for corporations is stock price. We, as a culture, need to shift the paradigm so that companies that excel in CSR have a higher stick price than that of their competitors. Keep the greed engine; insert the moral guidance system.

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