Corporations as Social Actors
In his seminal work Capitalism and Freedom, Milton Friedman says, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game…”
This philosophy directly contrasts with that offered by Pope Benedict XVI in his encyclical Caritas in Veritate: “Today's international capital market offers great freedom of action. Yet there is also increasing awareness of the need for greater social responsibility on the part of business […] Charity in truth, in this case, requires that shape and structure be given to those types of economic initiatives which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.” While I greatly admire much of Friedman’s work, I must side with the Pope, firmly believing that “Business activity has a human significance, prior to its professional one.” Indeed, investments in social causes are viable, valuable, and even essential.With the success of marketing and business strategies promoting social agendas, it is impossible to deny the viability and value of social investment in the business world. The RED marketing campaign and the abundance of Corporate Employee Volunteer Programs (CEVPs) in Fortune 500 companies is proof enough that the theme of social responsibility has taken hold in the business world. But why is this the case? Engineers Without Borders has outlined four areas in which CEVPs benefit a company, even without directly providing value to investors. They benefit companies by encouraging professional development, by facilitating mentorship, by encouraging corporate social responsibility, and by developing an Esprit de Corp among employees. Employees can contribute to massive development projects benefitting the worlds poor and needy while simultaneously adding value to the company.