There is a fascinating debate that took place between Milton Friedman, Whole Foods’ John Mackey, and Cypress Semiconductor’s T.J. Rodgers last October 2005 on the social responsibility of businesses. After reading the three articles below I am not sure all this talk about Corporate Social Responsibility (CSR) has added any value beyond being a great marketing ploy. I am beginning to wonder if CSR could even be potentially damaging.

If the debate isn’t the most thought provoking web content you have read in the last week, I owe you a coke.

Background - Milton Friedman’s famous 1970 New York Times Magazine Article
The Debate
Aftermath (only interesting if you read the debate)

Thoughts & Questions:

Friedman and Rodgers believe that doing whatever increases the bottom line while staying within the rules of the game; engaging in open and free competition without deception or fraud, is the only social responsibility that corporations have. In rebuttal John Mackey seems to make a lot of good points which don’t do much more than repackage what Friedman and Rodgers with flowers. Mackey claims the flowers are more than just marketing and rhetoric, but I am not sure he isn’t deceived by his long unbroken success at Whole Foods.

At the end of the debate I find myself basically agreeing with everybody, and see this debate mostly as 3 very different personalities expressing the same view but with different values. Mackey’s “twist” is a power grab for social entrepreneurs and he appears to be dipping his toes (Whole Foods) into the pool of hybrid non-profit / for-profits. Friedman’s rendition is more harsh, but he comes off sounding more honest than Mackey. As for Rodgers; he likes to make things interesting by throwing out a few seemingly ridiculous attacks on Mackey, but I believe there is purpose in these attacks. Mackey is clearly more left leaning and Rodgers is simply trying to test Mackey’s claim to being a libertarian.

So let’s cut to the questions: Should public corporations have more social responsibilities than an honest, maximized profit, or should they continue to maximize value to customers, shareholders and employees and then let them decide individually what is the socially responsible thing to do with the wealth that has been created and saved? This question is going to be heavily debated for years and years to come, and I believe this debate will be the starting point.

As for me: CSR sounds nice, but I am concerned that it could grow into something that will ultimately hurt the private, philanthropic and government sectors. Will it really make America more competitive? Is CSR just a sign that this country is headed toward a strong one party system? There have been hybrid Republican-Democrats forever, but I really get the feeling that the “socialization” or “hybridization” of capitalism is going to become mainstream, and we are going to see a lot of Republicans move toward center. According to the Center for Responsive Politics, as of Oct 29, 2007: 14 out of 17 listed industries are giving more money to Democrat Presidential Candidates than to Republican Presidential Candidates. Whereas in the 2000 presidential race between Bush & Gore - every single industry gave more money to Bush’s campaign than to Gore’s except for the TV/Movies/Music industry. I’m sure the best explanations for this, is the comparison of Primary Elections with Final Elections, but I’m still impressed. Corporations, which were once seen as a Republicans’ domain, don’t seem to be any longer.

I fear a strong one-party system, so perhaps my thoughts on the potential ‘Hybridization” of corporations through CSR is just paranoia, or is it?