On May 16, President
Clinton invited about 100 business executives to the White House to
announce the new "Ron Brown corporate Citizenship Award." Clinton
spotlighted 13 corporations that in his view had exhibited social
responsibility by providing employees with family leave, health and
pension benefits, safe workplaces, training, and policies that avoid
layoffs.
As intended, this event
garnered a great deal of attention and praise in the news media
(naming the award after the recently martyred Brown was a crafty, if
somewhat sleazy, device for attracting food press). The Wall Street
Journal’s May 17 story was typical. It featured quotes from Clinton
and the corporate executives being honored with only a one-sentence
nod to Republican critics, who were never identified or quoted.
The latest push for
so-called "corporate social responsibility" is part of an ongoing
media assault on the concept of the profit-seeking business, not
only in the news media but in entertainment. During the 1950s, wise
TV dads like Jim Anderson of Father Knows Best and Ward Cleaver of
Leave It to Beaver were an insurance salesman and an accountant,
respectively. Nick Charles, the Thin Man, was a publisher, as was
the Green Hornet. Bruce Wayne, a.k.a. Batman, was a rich
industrialist. Even into the 1960s, TV often portrayed business in a
positive light, especially in Westerns. Remember that Ben Cartwright
of Bonanza ran a sprawling ranching and mining empire on the
family’s thousand-acre Ponderosa estate.
But throughout the 1960s
and into the 1970s, both the popular culture and public sentiment
toward business underwent a dramatic reversal. Investigative
journalism became a romantic calling, with the name of the game
being to catch greedy corporations in the act of polluting the
water, gouging consumers, and exploiting workers. On television and
in the movies, business executives increasingly became the villains,
who were challenged by heroic lawyers, policemen, reporters, and
activists.
In a study of the hundred
highest-grossing films, researchers found that nearly nine of 10
business characters were portrayed positively before 1965, but two
of three were portrayed negatively thereafter. After 1975, the
proportion of negative business characters rose to three of four.
The same pattern held true for TV: 31 percent of business characters
were villains before 1965, compared to 58 percent afterward. Compare
the Cartwrights of the 1960s to the Ewings of the 1980s and you get
the general point.
Public sentiment is
influenced by what people read and what they see. In 1965, almost 60
percent of Americans believed that businesses made a "reasonable
profit" compared with only 24 percent who thought businesses made
too much. By 1975, the trend lines had reversed, with more Americans
calling profits excessive than reasonable. Even in 1939, as the
economic stagnation of the Great Depression lingered, 56 percent of
Americans said that the interests of employers and employees were
basically the same, while only 25 percent said they were opposed.
But by 1994, more Americans thought the interests of the two groups
clashed rather than coincided.
Advocates of so-called
corporate social responsibility believe that corporations have aduty
to look beyond profit and serve society. In reality, the American
corporation is a phenomenally successful social institution
precisely because of its focus on profit. Most new drugs for curing
disease and alleviating pain come from the private sector, not the
government. Workplace safety, health standards, wages, economic
advancement for minorities and women - these have all been improving
for decades regardless of, and often in spite of, government
intervention in the economy.
Nevertheless, the corporate
social responsibility movement continues to influence public opinion
and public policy, mostly via the news media - particularly the
network news and the New York Times, which have grown increasingly
divorced from reality. They have convinced millions of Americans
that we are currently in the midst of an historic downsizing of the
economy, though there is actually little evidence that we are
experiencing more layoffs than usual. Through irresponsible
reporting on scare stories about Alar on apples, silicone breast
implants and most recently start-up air carriers like ValuJet, the
press has destroyed companies and jobs and kept consumers from
getting what they want, which is, after all, the purpose of free
enterprise.
As successful as free
enterprise is, its continued survival is not a given. It is
especially not a given if the American public is not adequately
informed about true corporate responsibility.
John Hood is president of
the John Locke Foundation and the author of The Heroic Enterprise:
Business and the Common Good (the Free Press, 1996).