Sunday, September 9, 2007

Social Responsibility

Robert Reich, now an economist at the University of California, Berkeley and former Labor Secretary under President Clinton, is ready to give up the fight to make companies socially responsible. The Economist reports that in his new book, Supercapitalism, Reich denounces corporate social responsibility as a dangerous diversion that is undermining democracy.

However, Reich is no Milton Friedman, he who once famously proclaimed, "The social responsibility of business is to increase its profits." Reich believes the push for corporate social responsibility is a diversion from more important work, namely, protecting society with the right set of government rules.

But one question remains unanswered: in a land where government makes all the rules, who will protect society from the government? Self-interested individuals do not immediately become saints when they get a government job. They continue to behave in self-interested ways, only now they have the power to make the rules. And those who make the rules can define social responsibility any way they want to.

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