Corporate Social Responsibility: Another Cover for the Leftist Political Agenda

Representatives from companies such as Disney, the New York Times and Coca-Cola gathered at a conference dubbed “Business for Social Responsibility” earlier this month in Washington, D.C., to discuss corporate social responsibility—a phrase that may sound harmless, but is actually cleverly disguised rhetoric to promote a leftist political agenda.

 “The Business for Social Responsibility version of ‘corporate social responsibility’ is intended to help labor unions, environmental activists and other extreme social activist groups implement their social and political agendas," said Steven Milloy, president of the Free Enterprise Education Institute. "Businesses are society’s wealth generation machine, not an engine for social engineering."  

In response to the Business for Social Responsibility conference, Milloy’s organization, along with the National Legal and Policy Center and the Competitive Enterprise Institute, sponsored a counter-conference, held at the same Washington hotel, to address the troubling implications of corporate social responsibility.

Milloy has taken on corporate social responsibility directly. Earlier this year, he started the Free Enterprise Action Fund, a mutual fund that aims to give investors an opportunity to counter the anti-business movement of the left wing. Recently, Milloy and his business partner, Thomas Borelli, played a key role in convincing the chief executive of J.P. Morgan to change his mind about forming a coalition to lobby the Bush Administration for restricted global warming regulation in an effort to appease rainforest activists. 

In recent years, the phrase “corporate social responsibility” has become increasingly popular—used by liberal activists to guilt big business into funding groups such as the ACLU, Greenpeace Fund, Planned Parenthood and the Rainforest Alliance.

“Who wants to be against something that’s socially responsible?” said GreenWatch Executive Director David Hogberg of the Capital Research Center. “It’s one of those things that everyone wants to be for but no one’s really sure exactly what it means.” 

According to Business Ethics, self-labeled as “the magazine of corporate responsibility,” the phrase does not mean responsibility in handling shareholders’ investments.

On Business Ethics’ list of “100 Best Corporate Citizens 2005,” 48 of the 100 companies listed recorded a negative total financial return to its shareholders. Charitable contributions apparently don’t rank high on the list of priorities either, as 53 companies had negative ratings in that category as well. 

Instead, the list weights diversity, governance, employees, environment and human rights as more important, said Hogberg, who tracks the impact of environmentalist movements on public policy. Meanwhile, profit margins and customer satisfaction were overlooked.

Ed Hudgins, executive director of The Objectivist Center, which supports entrepreneurship by promoting values of reason, freedom, individualism and achievement, said the idea that business “owes” society something in the first place is a misnomer. 

According to Hudgins, business is the exchange of goods and services through mutual consent. Profits are the manifestation of wealth created through exchanges, he said. So if all bills are paid, business owes nothing. Everyone profits through supply and demand in a free-market society. What corporate social responsibility does, he said, is actually punish those who are successful at creating wealth and society.

Profits, added Hogberg, are the “only sincere and accurate reflection of how a corporation meets the needs of society.”

“Making a profit has all sorts of responsible outcomes—creating jobs, creating products and services that enhance our well-being, creating investment opportunities which create more wealth and more jobs and so on,” he said.