Front Page Titles (by Subject) Business\' Social Ethics - Literature of Liberty, January/March 1978, vol. 1, No. 1
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Business' Social Ethics - Leonard P. Liggio, Literature of Liberty, January/March 1978, vol. 1, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Business' Social Ethics
“The Social Responsibility of Business: A Dissent.” Business and Society (published by Roosevelt University), 17 (1977): 11–18.
In recent years many have vociferously contended that privately-owned firms have a “social responsibility” to alleviate a myriad of social ills (ranging from pollution to income maldistribution). Poised against these critics, and coming to the rescue of the supposedly beseiged businesses, are the defenders of the paramount profit ethic.
Now we see a new twist to this conventional polarization. “Social responsibility” advocates are often members of the business community itself, rather than (as is generally assumed) representing “anti-business” interests. Businessmen are drawn to the guaranteed markets, stable tax-generated revenues, and noncompetitive environment in which government operates. These attractions encourage corporate officials to advocate programs of “social responsibility” which they can manage as funded government agencies.
Various corporations, including Litton Industries, operate Job Corp projects on a cost-plus guaranteed basis. Litton has also proposed operating public school systems on the same basis. Other firms have sought business management of urban traffic, housing, and urban development. Private security companies have sought to contract state and local police and fire department functions. We cannot consider such business proposals as marketplace alternatives to government services. For example, Litton did not wish to start privately financed schools to compete on the open market with public schools. It proposed, instead, its own private management of the government-owned and tax-financed public schools. In a similar vein, as the Vietnam War wound down in the late 1960s, several defense contractors suggested rechanneling defense money into solving “social problems”—under their management.
Businesses that assume roles as government agents operate on an undisciplined and subsidized “cost-plus” basis. Competitive efficiency and sharpness erode as each representative of the business sector takes on the motives and the operational structure of political institutions. Suddenly, they feel no need to run an economic tight ship because tax dollars can cover for mismanagement and blunders. The firm now finds itself with an unlimited revenue base.
The immediate consequences of such a government-business “marriage” is the noticeable lack of efficiency which spreads from one partner and begins to rule the affairs of the other. And in the long-run, management myopia could produce a growing pattern of national politicization of economic activity.
Interested businesses often promote the “social responsibility of business” and may confirm Gabriel Kolko's thesis of the corporate state. A mixed economy results from the amalgamation of “government” and business. Government, through the regulatory process, would run the business system, and business, in turn, would run the government.
We must scrutinize the long-run consequences of confusing economic and business institutions. To the extent that businesses adapt the motives (“social responsibility”) and operational structure of political institutions, they will lose market incentives for the efficient management of resources.
The ambiguous slogan of Égalité has become the hallmark uniting numerous modern social trends. Oftentimes the conflicting claims of equality are advocated by rivals (e.g., the Bakke case). Sometimes we witness a striving to make persons equal in contradictory ways.
Can individual freedom, human diversity, and personal rights be reconciled with an equality in incomes, status, education, that is achieved by coercive means? How is equality of condition or result related to equal liberty and equality before the law?