Corporations like me, they really like me

From David Callahan of the LA Times, through Mark Thoma:

Every few decades, America's business leaders change their minds about what obligations corporations and the wealthy have to society. This happened 100 years ago, when ex-robber barons like Andrew Carnegie invented modern philanthropy to address social ills, and in the mid-20th century, when leading executives stopped fighting unions and backed more generous wages and benefits. It also happened in the 1970s, when big business rejected that compact with labor, leading to the harsher free-market ethos of the 1980s and 1990s.
Now, corporate leaders are shifting their thinking once more, calling for a gentler form of capitalism.
...
[A]s more corporate leaders proclaim their commitment to social responsibility, and as politicians, unions and activists demand that they live up to this rhetoric, a new era of a gentler capitalism may truly begin.

Thoma is very kind:

[Y]ou have to wonder how much of today's corporate and philanthropic concern over global warming and and other such issues is really an attempt by corporations to avoid potentially more costly solutions being imposed upon them, or an attempt by the wealthy to avoid a political backlash that would result in much higher tax rates. But, maybe I'm too cynical and there really is a different type of corporation or powerful individual beginning to emerge in response to a shift in social values. In the end, though, count me as skeptical.

Skeptical. Count me as incredulous. I live in the Midwest, where corn prices are through the roof because "socially responsible" companies have a new subsidized market for corn, namely, ethanol. Not a solution that would pass the free market test, because ethanol is more costly and less energy-efficient, but, with the help of Uncle Sam, it has become the fuel of choice to save the planet.

Companies have one open, stated purpose: To make profits. That's what they do, and I don't particularly mind that they do that. (Their other purpose these days is to enrich executives beyond all reason, but that has little to do with this post.) Even the most apparently socially responsible companies have an ulterior motive for their altruism.

Story: I had the chance to know, albeit slightly, the former head of the First National Bank of Chicago (FNBC), Gaylord Freeman. He was one of the last people who saw banking as one of the great human inventions, vital to growth and prosperity. He greatly extended the reach of FNBC to overseas locations, regardless of whether they would be profitable, so the benefits of modern banking would be available to all.

I don't want to sugar-coat that too much. Mr. Freeman probably got a kick out of being photographed with foreign leaders, and he certainly wouldn't have minded if, say, Addis Ababa became a world financial center with FNBC right in the middle.

But there was a sense, at least in our time of greatest prosperity, that corporations could do more than simply grub for profits - more accurately, there was a greater concept of long-term building; Addis Ababa might not be profitable now, or ten years from now, but maybe someday.

[Side note: One day, I think, we'll separate history into pre-Internet and post-Internet. Mr. Freeman passed away in 1991, and a Google search comes up with about 1200 hits, many of which have him tied up with Da Vinci Code-type conspiracies. Jamie Dimon, current head of JP Morgan Chase, gets 78,900 hits. Mr. Freeman has virtually disappeared, while Dimon will live on in computer servers in perpetuity.]

Anyway, anyone who believes that the modern-day CEO is motivated by a desire to marshal the power of his multi-national to do good works is totally oblivious to the reality on the ground. To cite Bill Gates, as Callahan does in his article, as an example of the socially responsible CEO is ludicrous, TIME's man of the year appellation notwithstanding.

A balanced look at Gates does not come up with untrammeled admiration for his gloriousness. I won't mention positives here, as plenty of other people already have (and there are positives, don't get me wrong). But Gates is also a leader in offshoring jobs, in the granting of H-1B visas, in the commoditization of computer software. This is not the post to discuss these matters in depth, but it is not at all unfair to point out that these actions have changed the landscape, not always in a way that benefits the nation from which Gates drew many of his life advantages.

Getting away from Gates, corporations are not going green because they want to lead the way on combating global warming. They're doing so because there's a market in it, a market right now, and profits to be made in selling "good" products at somewhat higher prices. That's not per se a bad thing, it's why we have corporations, but we shouldn't give them social brownie points for doing so.