J. has started organizing a virtual Aid Blog Forum, in which he’s encouraging a lot of bloggers to write on the same issue in a single week. It’s a great idea. The inaugural topic: corporate social responsibility (CSR). Here’s his description of it, and here’s a link to the contributions.
The contributions represent a wide range of perspectives on the topic. Which makes sense, given that the topic itself is wide-ranging. Since I’m already late in posting, I’ll avoid trying to offer any comprehensive analysis of CSR. Instead I’ll share two related thoughts that I haven’t seen mentioned elsewhere. The result is out of left field, leading to the interesting cast of characters in this post’s title. You’ve been forewarned.
1. CSR is marketing, so the alternative is more Charlie Sheen.
I tend think that CSR is just thinly veiled marketing. This is basically true whether the CSR occurs through monetary donations to NGOs, in-kind contributions of goods/services, or changes in business practices that have socially beneficial impacts. It’s ultimately about improving the corporation’s image in the eyes of customers, employees, investors, regulators, and other stakeholders. If a CSR activity is worthwhile without the marketing effects (say, an environmental efficiency initiative that saves on energy costs), then it just makes good business sense – and there’s no reason to give it the special label of “CSR”. We only call it CSR when it’s a net cost. Furthermore, a corporation will only do something with a net cost when it improves the corporate image. That’s not because the people running corporations are evil; it’s simply a result of the systemic constraints they face. Don’t believe me? Here’s a simple test: for a given CSR initiative X with net direct costs, would the company still do it if no one knew the company was doing it? Doubtful.*
The marketing imperative leads to some discomfort with CSR. If it’s all about marketing, then it exists to promote the donor’s others goals and it will come with restrictions that serve those interests. The marketing imperative distorts the good that could otherwise be done with the same resources.
Now, re-read the previous paragraph with a few substitutions: “national interests” instead of “marketing”, and “official development assistance” instead of “CSR”. This is why I don’t feel much discomfort with CSR. Most of the same problems are endemic to all of international aid.
So yes, it’s all about marketing. Yes, the resources dedicated to CSR could usually be used to promote more social good than they are. But the alternative to CSR is not a better use of those resources. The alternative is this:
Because that’s what marketing dollars usually buy. Corporate ads that run on television sets around the globe are funding shows like that. If a corporation didn’t get marketing benefits from CSR, it would instead spend those resources on more traditional marketing. While I love some television shows, I think the world has more than it needs. I’d rather see one less reality show or sitcom, and one more funded NGO program – even if that program has to put corporate logos on everything.
Okay, let’s switch gears a bit so I can explain how…
2. CSR makes Karl Marx cry.
Apparently most of our friends in the economics departments don’t study Marx anymore. They’re pretty sure he was wrong and they leave it at that. So recently there’s been some consternation after two otherwise-sane economists suggested that Marx was right, at least in his critiques of capitalism (see here and here, especially the 650+ comments on the latter).
Of course, if you came out of a different academic department, this might not be news to you. Especially if you come at Marx from the standpoint of intellectual history. Every thinker is subject to Sturgeon’s Law, which states that 90% of everything is crap. The corollary is that 10% of everything is worthwhile. So it would be amazing if Marx’s thinking on economic history had no useful insights for our present situation.
As noted by the formerly-sane economists mentioned above, a relevant insight from Marx is the idea that workers become alienated when they feel divorced from the product of their labor. There’s something inherently gratifying about creating a physical object or providing a tangible service for someone. Marx predicted that workers on increasingly efficient assembly lines would feel less meaning and purpose in their lives. Little did he know that many Americans working in cubicles would feel even further removed from their outputs. This has been exasperated by the efficiency of modern management and production systems.
I believe the following illustrates my point.
Office Space was released in February 1999, when the dot-com boom was still, you know, booming. It was supposed to be the best of times! And yet Americans loved that movie. Not in the “look at those poor saps, I’m glad I love my job” way. More like the “I, too, want to beat the crap out of a fax machine with a baseball bat” way.
Corporations have tried all kinds of things to help employees feel meaningfully invested in their work. Bob and Bob, Office Space’s iconic consultants, suggested an employee stock option program. Peter, the everyman hero, wasn’t really interested. For most of us, there’s a limit to how satisfied we feel with monetary compensation and physical comforts. (If you were an economist, you might even say there are diminishing marginal returns.) There’s also a limit to how much corporations can provide these types of incentives, especially today.
CSR has gotten a boost in recent years as a relatively cheap way to fight worker alienation. The burgeoning “social enterprise” movement taps into the same dynamic, especially among young and educated Americans. The revolutionary zeal of youth has been channeled in a different direction. And that’s why CSR makes Karl Marx cry.**
3. Final thoughts
Let’s come off the Marxist track. It was a bit of a non sequitur, but it was fun, right? I just looked back at J.’s post, in which he asked for actionable suggestions. Yet I haven’t offered any of those. Crap. Um, how about this:
None of the above is incompatible with the idea of corporate donor education. Just because CSR is already better than Two and a Half Men doesn’t mean it can’t be even better. NGOs, bloggers, journalists, MBA programs and others should take responsibility for helping CSR officers understand how their efforts can have the greatest positive impact. This will also improve their results on marketing and reducing alienation.
* Incidentally, this same argument might apply to individuals. For those interested in moral philosophy, think of it like an inverted Ring of Gyges.
** I’m actually being a bit unfair to Marx, I think, by suggesting that he would dislike CSR. If I’m not mistaken, Marx didn’t spill much ink recommending socialist revolutions so much as merely predicting them. CSR is just one element of a panoply of reasons to think the worldwide proletarian revolution will never happen. A few other reasons include the expansion of the American middle class in the second half of the 20th century, the growth of welfare states in both Europe and the US, the failure of the Soviet Union, and the spread of markets in nominally communist China. Marx might cry at these developments, but only because they demonstrate the flaws in his analysis. (If I’m wrong on this, maybe someone who has more familiarity with Marx’s writing can correct me.)