Corporations, Business Ethics, Social Responsibility and Collectivism—Confronting the Culture of Fear in the New Millennium

Human beings are social creatures. The very foundation of civilization lies in human interactions that are social in nature and in manifestation. Everywhere and throughout history human beings have created complex social structures that have lasted for millennia: for spiritual and moral edification, for family and procreation, for living together in communities and groups, for trade and commerce, for the education and welfare of all living creatures who inhabit our planet. From birth, children are taught to respect and collaborate with these social structures. Throughout their lives they learn about the rules of conduct humanity has so diligently codified into law. However, our planet has long been segregated into races and cultures each having developed their own distinct codes of conduct. One commonly held point of view widely proliferated throughout humanity is the idea that every being has a responsibility to abide by some sort of code or law. Law has become the “religion” of humanity in the sense that law has become institutionalized and functions as a system of supreme governance over human interactions demanding reverence from those human beings within its dominion. However, any law itself cannot be supreme unless all choose to voluntarily obey or be compelled to obey by a mechanism of enforcement—a penalty for non compliance or deviation.

At some point in history the concept of money was introduced to human social interactions. It perhaps began when certain individuals or groups who rose to positions of power due to wealth, strength, intelligence, cunning, deceit, or force. In the interest of preserving their acquired power, they introduced symbols of trade, either coin or currency bearing the image of the rulers or ‘revered ones’. All people under their jurisdiction would be compelled to use these symbols for trading goods and services. These symbols have been so extensively used throughout history that money, as it is called today, has become an integral and dominant component of human social interactions impacting all human beings; and has created many groups or categories of humans commonly known as levels of class. However, money has also created another entity entirely. An entity comprised of human beings from different classes, but given the distinction of being something separate unto itself: the corporation.

Corporations are very interesting indeed. They come in all shapes and sizes. A small corporation can be a corporation of one with the same individual acting as chief executive officer, secretary, and board; or, corporations can be large with many individuals serving as members of the board: vice presidents and secretaries each in charge of their own structures or departments within the corporation. Corporations exist for different purposes. Some exist for profit while others exist for charity. Regardless of their composition or structure corporations function within the same legal framework as human social interactions—or do they?

Milton Friedman asks in the second paragraph of his essay entitled The Social Responsibility of Business Is to Increase Its Profits:

"What does it mean to say that 'business' has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but 'business' as a whole cannot be said to have responsibilities, even in this vague sense. The first step toward clarity in examining the doctrine of social responsibility of business is to ask precisely what it implies for whom."

In this statement Freidman distinguishes what a corporation is by declaring it “artificial” with “artificial responsibilities” going so far as to say that business as a whole does not have even a “vague sense of responsibility.” I love the way Friedman uses the word “artificial” to marginalize responsibility; relegating it to the arena of only flesh and blood. The whole reason that people are debating corporate responsibility these days is that too many corporations and their executive directors have abused their power in pursuit of profits. Many corporations have acted with impunity, hiring professionals to analyze local laws and advise them on how to best take advantage of legal loopholes. All these things have been done in the name of profits. Friedman claims in his essay that the only responsibility an executive director has is to his shareholders. He claims that obligating an executive director to have a “social conscience” is the same as obligating him to engage in “taxing without representation.” Those being taxed are presumably the stockholders of the corporation.

It is surprising to me that a man who has been awarded a Nobel Prize for economics could make such a statement suggesting that business operates in a social vacuum. All of these companies, corporations, proprietorships, etc. are organizations (collectives) of people. People are employed by them; people are the consumers of the products and services offered by them. It is the people who are most affected by these organizations in one form or another. To say that businesses are isolated from social impact and responsibility, to make a profit, does not make any sense at all. People are social creatures.

If an executive director "cooks the books" is he not "taxing without representation?" His charity or "social conscience" is squarely upon himself and maybe a few of his buddies who are going to get stinking rich in the process. Many executives have demonstrated themselves to act like selfish little children who say "Gimme, Gimme, mine, mine, it's all mine. You can only have what's left when I am done taking my share." The impact of the executive director’s choices is squarely on the people. The executives and a few inside stockholders get rich, while the corporation goes bankrupt, people loose their investments, people loose their jobs and the trickle down effect is felt down to the man or woman on the street. Whose responsibility is it for breaking the law, for the bankruptcy, and for the social impact? Who is liable to give account for what has happened? Someone has to be responsible, why not the corporation? The fact that what a corporation or business does has an impact on social structures, by default, makes it responsible to society at large.

Social responsibility can be said to simply consist of being honest and doing what’s best for the entire “collective”, that is everybody concerned including the stockholders, the employees, and the consumers of the products or services provided by corporations to derive their profits. Corporations have enjoyed a long run under the honor system. Business ethics are mostly an unwritten code and totally subjective. What is ethical to some may be unscrupulous to others. Just simply following the law and managing corporations by set standards would suffice as "social responsibility." But, the reality is that money has become like a God of the free market system. The desire to acquire vast amounts of money tempts and compels men to break the rules in all sorts of creative ways. Not every executive is a philanthropist or a socialist. There needs to be strong mechanisms to enforce compliance and protect healthy competition, especially when violations are likely to have an impact on the environment, on human rights, and the economic stability of nations. Social responsibilities therefore must be legislated and perhaps all citizens should also be stockholders as well. Then the responsibility to the stockholders would be a responsibility to the people; for all people would be stockholders. Without legal mandates for "social responsibility", corporations and/or executive directors can simply run amok.

In sharp contrast to Milton Freidman’s point of view as a conservative economist advocating the free market system there are the views of Raymond Williams, a British theorist who wrote a book on concepts of individualism vs. collectivism entitled Culture and Society: bourgeois/working class binary. In his book Williams states:

"The crucial distinguishing element in English life since the Industrial Revolution is not language, not dress, not leisure — for these indeed will tend to uniformity. The crucial distinction is between alternative ideas of the nature of social relationships.

'Bourgeois' is a significant term because it marks that version of social relationship which we usually call individualism: that is to say, an idea of society as a neutral area within which each individual is free to pursue his own development and his own advantage as a natural right....The individualist idea can be sharply contrasted with the idea that we properly associate with the working class: and idea which, whether it is called communism, socialism or cooperation, regards society neither as neutral nor as protective, but as the positive means for all kinds of development, including individual development. Development and advantage are not individually but commonly interpreted. The provision of the means of life will, alike in production and distribution is collective and mutual. Improvement is sought, not in the opportunity to escape from one's class, or to make a career, but in the general and controlled advance of all. The human fund is regarded as in all respects common, and freedom of access to it a right constituted by one's humanity; yet such access, in whatever kind, is common or it is nothing. Not the individual, but the whole society, will move." (Williams, pp 325, 326)

This quote hints at a definition of collectivism. Simply put, collectivism is "power to the people". We as human beings have relied heavily on a system of government through representation. We elect officials to preside over us and to represent our values when decisions affecting all citizens come to play. However, throughout history, we have seen the corrupting influence of money, property and prestige seduce men to seize the day "carpe diem" and, in so doing, trample over the human rights of powerless individuals among masses. The graves of millions of innocent human beings cry out for retribution, for the countless trillions in profits realized by multinational enterprises. Collectivism redistributes the power from the ruling class to the working class. It gives every human being a voice.

Democracy, Socialism, and Collectivism are compatible and in many ways the same. In capitalism, individuals control wealth. In socialism, the mechanism of production and distribution is owned collectively by all, and the political power is exercised by the whole community. This system is similar to the ideals of Democracy that we have now in the US. However at this time, less than 6% of the population controls 90% of the wealth which means that this 6% has most of the political power. A shift to socialism and collectivism would mean the power is shared by all. But socialism and collectivism have huge hurdles to overcome due to years of bad press and failed attempts. The bottom line is that someone needs to confront the fact that the rich are firmly entrenched in the power structure.

A good example of collectivist ideology comes from the book The Grapes of Wrath by John Steinbeck. In this story we become acquainted with people who had been a part of the Jeffersonian Democracy of America their entire lives. They lived on the same land and identified with it as though it were their very soul. Then the government steps in and begins to tax their land until they take it away from them when they can't pay. Then they sell the land to Capitalist/Industrialists who, in the name of profits for stockholders etc., arrive with bulldozers and force all of these humble folks off of their land. (This was during the transformation of America from Jeffersonian Democracy into Wilson Capitalism through the mechanism of the Industrial Revolution. I say Wilson because his presidency is marked by many legislative measures designed to consolidate money and power for a few rich constituents.) In the story, we follow one man, Job, who has been serving a sentence in prison. He comes home to find everybody has disappeared and his farm and home are abandoned. Eventually he catches up with his family who are heading west in search of jobs and food. On the way they see all the collateral damage of the Industrial Revolution and the devastation to humanity: the great depression, Hoovervilles, starvation, people robbing and killing each other, homelessness, and discrimination. They become slaves for wages that were essentially, by today’s standards, around $100 a month (to feed a whole family of seven). Every member of the family has to work, and not just for eight hours a day. No, try like 12 hours a day or more. After a lot of terrible things that happen, the family ends up in a government campground called Wheat Patch. They learn about how people can organize together to create collectives to force changes in the status quo. They begin to see that no longer can they live by the principle of "every man for himself" (the individual); they begin to realize that they must live "for one and all" (the collective) if they are going to survive in the "dog eat dog" world of capitalism.

Today in this country we have unions, worker safety laws, labor laws (such as not hiring children and exploiting them), the eight hour workday, even the ACLU etc. because of the efforts of so called "communists" and "socialists" who were beaten, shot, mauled, burned and slaughtered, by our government under Woodrow Wilson all in the name of capitalism and free enterprise. Remember the Wobblies of the IWW (i.e. WOW hall). Our constitution has the words "Government of the people, by the people, and for the people..." However, the huge monetary requirements people have to generate to get elected places "true representation" out of reach for the average working class person. What we have ended up with under our current system is that "representation" is sold to the largest political contributor, and the largest contributors are corporations. Politics has become a business with virtually no enforceable rules.

Another very interesting point made by Thomas L Friedman commenting on Nike CEO Philip H. Knight and the University of Oregon donation scandal is that:

"the best way to create global governance—over issues from sweatshops to the environment—when there is no global government is to build coalitions, in which enlightened companies, consumers, and social activists work together to forge their own rules and enforcement mechanisms."

Is this not a collective?? Even though Friedman intended that his comments be supportive of Phil Knight and his advocacy of the FLA, it seems that Friedman does support a multilateral collective that is inclusive rather than exclusive of socialist and collectivist agendas. More could be said about the controversy surrounding Mr. Knight however, Friedman’s comment about building coalitions is what is significant here.

Looking to the future of our planet and with the advent of the Internet, for the first time in history, human beings have the opportunity to create a global social democratic community where each inhabitant of the appropriate age can participate in the decision making process. With so much knowledge and information, we have the power and the resources to self educate on the issues that are most important to us. No longer do we need as many leaders or representatives. The whole governmental system can be turned upside down where leaders become "trusted servants who do not govern." It surely would not be easy to establish. Much debate over the unification of cultures and codes of conduct must surely take place before such unity could be accomplished. But, in the long run, it would empower people more to know that they have a say at such a high level of authority. Such a system could be like a check and balance against the votes of elected officials or corporations. If the people don't like what the representatives or executive directors are deciding then their decisions could be overturned by a popular vote of the people. Especially in America, on the Federal level, it would be great for all citizens to have this kind of vote.

A perfect example of a system in need of reform is that of electing a president. American presidents are not elected by a popular vote of the people but through an electoral college. Look at what happened in the last election. The popular vote went to Gore. But, the electoral vote went to Bush; and that was after, recounting of votes, much wrangling by lawyers and intervention by conservative judges of the Supreme Court. If the people had the power to elect, then the outcome of the election would have been completely different. Whatever side of the political spectrum may be speaking they are both saying the same thing; that neither side wants to be subject to the others “doctrines.” The only difference seems to be in how each side intends to enforce their “doctrine” on the other. Everyone's idea of what is fair is different. That is why the standard of fairness has to be set by law.

Have we as a species lost touch with our sense of the family, community, brotherhood/sisterhood, etc.? We need to begin to see ourselves as "one people of the earth" instead of loosely bonded groups of nationalities and cultures brought together for economic dominance/security. Too many people are suffering to justify the global profit machine. That is why people are rising up all over the world in violent opposition to economic globalization efforts.

Our economic prosperity is tenuous at best. Just look at the cascade of economic decline since 9/11. This demonstrates why terror is so effective in forcing changes. However the changes that occur are two-fold. Those who look at the danger and expect the worst will clamp down on human rights even more for fear that everyone is a potential terrorist, while those who are fearless will seize the opportunity to win over their enemies by courageously promoting candid and open discussions. The best way to diffuse a volatile situation is to embrace your enemies and build bridges of trust through communication and discourse.

We can no longer afford to continue in the direction we are going as a nation. America is a "culture of fear." Barry Glassner, in his book The Culture of Fear: Why Americans Are Afraid of the Wrong Thing, argues that American consumers are motivated to consume through fear tactics. For example, the threat of terrorism has motivated people to spend money on defense, insurance, stocking up on food, home security, etc. We are bombarded with negative realities on a daily basis and behind most of these realities are fearful consequences that we must protect ourselves from, disease, pollution, violence, and effects of old age, insurance, identity theft; the list goes on and on. This manipulation by fear is supported heavily by the media and advertising. Many media channels still demonizes anyone who isn't white, perpetuating the idea that people of color are behind most of the crime in this country. In fact, Americans are lead to believe that their communities aren't as safe as they really are. Fear also helps to make us "good little citizens" afraid to rock the boat, afraid to stand up and say “NO MORE FEAR!” Fear makes us pay our taxes and obey the law. Fear distracts us from realizing that we are being controlled and manipulated. And yet why are we so fascinated by people who are fearless? Our superheroes are fearless. We all long to be fearless and inhabit a world that truly supports human rights while at the same time offers opportunities for prosperity and peace to all inhabitants. Only through courageous collective action can we confront the corporate monster.