Why Corporate Social Responsibility is BS | Robert reich

IIn recent years, “corporate social responsibility” has been seen by some as the answer to the multiple failings of capitalism. Business leaders have responded to all kinds of issues – worsening climate change, rising inequalities, soaring healthcare costs, and more.

Ninety-eight percent of this waste is garbage. CEOs will not do anything that will hurt their bottom line. Their goal is to make as much money as possible, not to solve social problems.

In fact, real social change would prevent them from doing many of the hugely profitable things they do now. Which means they won’t change their ways unless they are Required by law change (and even then, only when the penalty multiplied by the probability of getting caught outweighs the benefits of continuing anyway). Their soothing promises of social responsibility are aimed at preventing such laws.

I have seen this on several occasions. When I was Secretary of Labor, big corporations violated laws on worker safety, wages, hours and pensions, whenever it was cheaper than obeying the laws. And they would fight like hell against such laws to begin with – while telling the public how wonderful citizens they are.

You may recall that in August 2019, the Business Roundtable – one of Washington’s most prestigious business groups, on whose board the CEOs of Apple, Walmart, and JPMorgan sit – released an widely publicized statement expressing “a fundamental commitment” to the well-being of “all of our stakeholders ”(emphasis in 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 released a steady stream of jejune statements about their dedication to things such as providing affordable child care, preschool and health care, promoting community colleges and workforce training, poverty reduction and climate change reversal.

Turns out these are exactly the priorities of Joe Biden’s $ 3.5 billion reconciliation bill. But guess what? The Business Roundtable is not lobbying for the bill. It’s intense lobbying versus this.

Jessica Boulanger, a spokesperson, told the Washington Post that the roundtable was engaged in “a significant and multifaceted campaign” to stop the tax increases that would fund the bill, and “will continue to intensify our efforts in the weeks to come “. The group is launching a seven-figure digital advertising campaign to oppose the bill.

Hypocrisy? Only if you believe in the BS Roundtable on Corporate Social Responsibility. If you know the truth – that companies will do whatever they can to maximize profits and share values, social responsibility damn it – there is nothing surprising here.

Why did business groups not fight the Presidential Infrastructure Bill? Because government spending on infrastructure contributes to their bottom line by reducing their costs of supplying and bringing goods to market. Social responsibility has nothing to do with it.

It is tempting to attribute all of this to “corporate greed”. But that only makes sense if you think companies are capable of emotions, like greed. They are not. Businesses are not people, no matter what the Supreme Court says. These are bundles of contracts.

The specific people who enter into these contracts (on behalf of large corporations as well as the thousands of people who manage large investment funds on behalf of millions of shareholders) are neither greedy nor socially responsible. They just do what they think is their job. Greed and social responsibility have been whitewashed by these transactions.

If we want these transactions to change – to better align with public needs rather than private profits – the laws must change. For example, taxes on large corporations must increase in order to finance public investment and safety nets.

But such laws will not change if companies continue to spend massive amounts of money on politics. Spokespersons from companies like Boulanger of the Business Roundtable – as well as platoons of corporate lobbyists and influence peddlers, corporate lawyers and mercenary economists, corporate political agents and public relations officials – together form a fourth branch of government, wielding enormous and growing power. About one in four people currently working in downtown Washington fulfills one of these roles.

The result is clear. The most telling trends over the past three decades have been the growing share of the economy devoted to corporate profits – generating ever higher pay for senior executives and ever higher payouts for big investors (who all live shares) – and the declining share going to most Americans in the form of wages and salaries.

The senseless chatter about “corporate social responsibility” aims to mask these trends. Biden’s $ 3.5 billion plan aims to reverse them.

But big business is doing everything in their power to sabotage Biden’s plan. The only way to stop this sabotage is to ignore any mention of corporate social responsibility and make a heck of a row for Biden’s plan, as well as laws to reduce the power of big money in politics.

Comments are closed.