02 November 2008

The business of business is business

That was the proposition under scrutiny at today's Economist-sponsored debate at Gotham Hall.

One of several events this weekend representing The Economist: Off the Page, the publication's first ever series of events in New York City, the face-off pitted those who support corporate social responsibility against those who believe accountability for social needs should rest solely with the government.

At the outset the audience was tilted somewhat in favor of corporate social responsibility, with 40 percent raising hands for the proposition and 60 raising against. A roundup of the statements:

Clive Crook: A columnist for the Financial Times and a senior editor at The Atlantic, Crook argued that the chain of accountability between businesses and their customers would be upset by the interference of regulations that require investments social programs. Moreover, he said, mandating that corporations support social programs would give corporate management the power and responsibilities that traditional public servants should have -- a position to which they are not suited.

Will Wilkinson: A research fellow at the Cato institute, Wilkinson warned against the possibility of corporate "indulgences" brought about by regulations -- by which corporations use the social programs in which they are mandated to participate as leverage against being held responsible for real harm they may be doing. He also pointed out that any group of shareholders -- or citizens, for that matter -- is likely to have diverse ideas for what a good social program might be, and sanctioning one policy over another is not reasonable.

John G. Ruggie: Ruggie, who teaches International Affairs at Harvard, pointed out that social expectations often evolve faster than law, and so it is crucial for businesses to adapt to them with socially responsible policy. He noted that business, being so integrally tied to the public, requires a "social license" to operate, and if a profitable business violates that license, it should be made to obey through regulations.

Bennett Freeman: Freeman, Senior Vice President for Social Research and Policy at Calvert, argued that beyond the obvious benefits of socially responsible corporations, regulations often uncover new markets -- the case of green energy, for example -- actually making businesses more profitable than before. If profit and enhanced social welfare are the consequences of corporate social responsibility, he asked, then why oppose it?

By the end of the rebuttals and questions from the audience, opinions had shifted noticeably, with half of the audience now in favor of the proposition and half against. (No word on whether Economist political cartoonist Kevin Kallaugher's fun tutorial on drawing a caricature of George W. Bush affected the voting.)

Should corporations be involved in the business of social responsibility? View related TEDTalks -- Paul Collier on the bottom billion, Steven Levitt on child carseats and Hector Ruiz on connecting the world -- and join the discussion in our comments.

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