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Friday, November 24, 2006

On Corporations & 'Social Responsibility'

I was probably viewed as a pariah by many in graduate school (1998 to 2000). Corporate responsibility toward protecting the environment and bringing about world peace and ending global hunger and preventing AIDS was all the rage at the time, and here I was arguing in class that corporate heads had absolutely no obligation (inside the four walls) to participate in any of these then-trendy social movements. Their only responsibility was to maximizing shareholder equity through low prices, lower costs, efficiencies of production, product quality, customer satisfaction, etc. Shareholders, reaping the rewards from such sound and effectual corporate governance, could then plow their capital gains and dividends (if such were paid out) into whatever goofy fly-by-night crusades they deemed appropriate. Global warming comes to mind.

It turns out I was - I am - in good company:
Milton Friedman Was Right
"Corporate social responsibility" is bunk.
By Henry G. Manne, Writing in the Wall Street Journal

Milton Friedman famously declared that the sole business of the managers of a publicly held corporation was to maximize the value of its outstanding shares. Any effort to use corporate resources for purely altruistic purposes he equated to socialism.

The illusion of great and threatening power, the superficial attractiveness of the notion, and the frequent repetition of the mantra of corporate social responsibility have made this fallacy a part of the modern corporate zeitgeist. Like the citizens who were afraid to tell the emperor that he was naked, no responsible business official would dare contradict the notion publicly for fear of financial ruin, even though the practice continues to cost shareholders and society enormous amounts. This is especially so in large-scale retail businesses like Wal-Mart or Coca-Cola or BP that are highly vulnerable to organized public criticism. Our laws against extortion do not function effectively when it comes to corporations. And so to some extent these private entities have indeed, via the social responsibility notion, been converted into crypto-public enterprises that are the essence of socialism. Milton Friedman was right again. (link)
The most recent and glaring example of corporate irresponsibility? Click here.

9/10 Mindset

A whole host of terrorist attacks on American interests over a period of recent decades did nothing to awaken the citizenry - and our political leadership - to the fact that we are not safe simply because an ocean separates us from those who hate us and want us all dead. The posterboy for that era of blind naivete, Bill Clinton, dealt with the attack on Khobar Towers and the bombings of our embassies in Africa and the first attack on the World Trade Center and the killing of 17 sailors aboard the USS Cole by playing hide-the-cigar with Monica Lewinski. Oh, and he blew up a tent in Afghanistan. Oh, and he left office a very popular president. A commanding statesman.

It took 9/11 to shock Americans into understanding just how vulnerable we actually are.

Well, most Americans. Some have gone back to believing the problem to be, in fact, "over there":
The Politics of Murder
By David Ignatius, The Washington Post

The people of the Middle East are destroying themselves, literally and figuratively, with the politics of assassination. So many things are going right in the modern world -- until we reach the boundaries of the Middle East, where the gunmen hide in wait.

The idea that America is going to save the Arab world from itself is seductive, but it's wrong. We have watched in Iraq an excruciating demonstration of our inability to stop the killers. We aren't tough enough for it or smart enough -- and in the end it isn't our problem. (link)
As of last count, 1,150 men, women, and children are still missing from the last incident - in New York City - on September 11, 2001 - that, "in the end, wasn't our problem."

Now They're Using Grannies

I wonder why those who cry out the loudest for jihad in the Arab world don't strap a bomb to their waists and send themselves to hell? Instead of little old ladies:
Grandmother Blows Self Up in Gaza Suicide Blast
By Steven Erlanger, The New York Times

Jerusalem, Nov. 23 — In the first suicide bombing claimed by Hamas in nearly two years, a grandmother blew herself up on Thursday near Israeli soldiers operating inside Gaza, near the town of Beit Lahiya.

The soldiers threw a stun grenade toward the woman, who the Israeli authorities said had been acting in a suspicious manner, and she detonated her explosive belt, killing herself. Two soldiers were slightly wounded. (link)
The Muslim world rejoices over her death. And our new leadership in Washington wants to sit down and negotiate.

The've all gone mad.