The Online Library of Liberty

A project of Liberty Fund, Inc.

• Associate Editors
• Editorial
• Bibliographic Essay: Forrest Mcdonald, a Founding Father's Library
• Bibliographic Essay: Murray N. Rothbard, Modern Historians Confront the American Revolution
• I: Paradigms of Freedom
• Conflicting Paradigms
• Paradigms As Procrustes' Bed
• Interest and Ambition
• Thesis and Antithesis
• Freedom and Authority
• Sin and Society
• Autonomy and Authority
• Virtue and Status
• Utility and Progress
• Diversity and Equality
• II: Nonspontaneous Order
• State Vs Society
• The Therapeutic State
• Order and Elites
• Order and Virtue
• Self-perfection
• Socialism and Freedom
• Market Socialism
• Centralism Vs Decentralism
• Voluntary Servitude
• Authority and Obedience
• Social Control
• Power and Ideology
• Hegemony
• III: Spontaneous Order
• Freedom and Knowledge
• The Case For Government
• The Case Against Government
• Community Vs. State
• State and Morality
• Freedom and Creativity
• Order Without State
• IV: Individual and Social Good
• The Right to Privacy
• Autonomy and Psychiatry
• Personal Choice
• Individuals, Groups, and States
• Social Dynamics
• Social Engineering
• Individuals and Groups
• Personal Vs. Social Goods
• Individual Rationality
• Self-interest and Social Good
• Self-interest Vs. Slavery
• Art and Autonomy
• Radical Individualism
• V: Ethics, Rights, and Freedom
• Objective Values
• Natural Law
• Preambles to Freedom
• Social Sciences and Values
• Reason and Change
• Reason and Choice
• Economics and Values
• Legal Naturalism
• Justice As Restitution
• Justice As Punishment
• Rights and Contract
• Virtue In the Market
• Justice Under Capitalism
• Profits and Choice
• Social Framework and Prosperity
• Ecology and Rights
• Business' Social Ethics
• VI: Equality
• Problems With Inequality
• Equality, Power, and Values
• Unequal Income
• Equal Opportunity
• Equal Liberty
• Equality of Condition
• The Egalitarian State
• Sexual Equality
• VII: Power
• Empire, Equality, and Envy
• Imperial Presidency
• Empire and Inflation
• Watergate As a Symptom of Empire
• The Pragmatic Presidency
• “absolute Power” and Corruption
• VIII: Planning Vs. Choice
• Origins of Planning
• Bureaucratic Growth
• Prediction and Control
• Government Planning
• Government Experts
• Useless Usury Laws
• Wartime Regulation
• Government Inflation
• Neomercantilism
• Compulsory Schooling
• Planning In Nonprofit Agencies
• Private Capital and Education
• Choice and Spontaneous Order

Business' Social Ethics

Shaffer, Butler D.

“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.

VI

Equality

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?