8 Mar 2014

Can a business be 'socially responsible' and is it good for a whole society?

This is the question, raised by Friedman (Friedman, M., 1970), I tackled in the half of my essay for Philosphy in Business. My conclusion is yes but with a limited definition of 'social responsibilities'. A few discussed points are:

  • Can a business, not a person, be responsible?
  • What is then 'social responsibility' for a business?
  • With that definition, can government and business together achieve social purposes?
I heavily relied on the argument by Wolf to narrow down business's responsibilities and its social ones, who discussed the distinction between moral and practical responsibilities. (Wolf, S., 1985)

When I submitted, I thought over four crucial conditions where good purposes can be met together with government and businesses with such 'social responsibilities', in the old age. These should change along the discourse I face going forward and thus be polished and redefined to adapt to the current world environment:

  1. The government is generally trusted among people;
  2. The government possesses capability of identifying and enforcing right regulations;
  3. Businesses mostly produce goods and services within one country; and
  4. Negative externalities of businesses is at least kept within the national borders.
For sure, conditions 1 and 2 can be recovered by some reforms on the rules of political games, but 3 and 4 would be never fulfilled again unless the national borders are redefined in a dramatic manner, which I don't believe to happen within a life of myself.

Assuming you live in a transition period makes you feel special but change nothing. As is the course of dynamic interactions, things never seem to be steady state; there is and will be always a delta if you observer realities. If any single government, and even capital markets, cannot address the multinationals (e.g. tax payment by Apple), do we inevitably live in a world of laissez-faire, with which I, along with Smith, am not a big fun either since 'the maintenance of justice and the rule of law is therefore vital.' (Smith, A., 1776)

In the end, at least surprising to me, I myself prefer living in a world with the rule of laws which are discussed and legitimated by somewhat democratic, or participatory, procedures.

Friedman, M., 1970, ‘The Social Responsibility of Business is to Increase its Profits’ New
York Times Magazine, 13th September.
Smith, A., 1776, 'An Inquiry to the Nature and Causes of Wealth of Nations.' Available from <http://www.econlib.org/library/Smith/smWN.html>
Wolf, S., 1985, ‘The Legal and Moral Responsibility of Organizations.’ in Pennock, J.R and
Chapman, J. W. (eds.) Criminal Justice. New York: New York University Press. pp. 267–86

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