If the business of business is business, why should corporations be involved with development?
Corporate social responsibility (CSR) is defined differently by different development analysts. In this post I will explore some different ideas and some of the criticism.
Hopkins (2007) says CSR is about the way that profit is made. He says that if a corporation is only concerned with making a profit it will not realise its potential. Successful business reduces unemployment. It can do all kinds of good for society from ensuring there is primary and secondary education available for all and helping to offer resources to tackle the major diseases in the world.
With CSR a company can enhance its reputation, attract and motivate employees, reduce risks in developing countries (where it may have suppliers) and ensure the sustainability of its own operations. If consumers earn decent wages, they can purchase what they produce. The private sector can assist governments in improving well-being.
Rajak (2011) calls CSR compassionate capitalism and defines it as “a movement promising to harness the global reach and resources of transnational corporations in the service of local development and social improvement”. She says business leaders now consider themselves “guardians of the social order”. Commerce is now tied to community, enterprise linked with the social. But Rajak says its important to look back at what as come before. Is CSR new?
Case Study: Founder of the De Beers diamond empire, Cecil Rhodes
In under 10 years Cecil Rhodes either invaded or brought British imperial authority to bear over a region over 3 times the size of France. He was born in 1853 and moved to South Africa from England to recover from an illness when he was a teenager. In the 1870s he founded a diamond business and found time to get a degree from Oxford University by travelling back and forth. He managed to get control of a region covering modern day Botswana, Zimbabwe, Zambia and Malawi. By 1888, he controlled the entire South African diamond industry, which meant 90% of world production, through De Beers. He was one of the world richest men and entered politics.
At first Rhodes would share meals with the African workers and stay with them in their huts, but as he increased in power and racist attitudes became dominant in England, he became more of a dictator. He dreamed of a white controlled Africa and enforced segregation. He bought the most popular newspaper to make sure his views were heard. Before long he had adopted the racist policies of the Afrikaners in their most extreme form.
Although he is perhaps the largest figure in British colonial history, Rhodes has received surprisingly little dramatic attention. The scriptwriter of the BBC’s ‘Rhodes’, Anthony Thomas, offers a possible explanation:
“We turn our backs on him historically because he is too embarrassing to deal with. Hitler described him as the only Englishman who truly understood Anglo- Saxon ideals and destiny. It is too chilling to think of how Hitler empathised with him.”
By failing to comprehend the perspective of indigenous people a violent rebellion took place in 1896-7. It became clear how important it is for big businesses, that were changing towns and thousands of lives, to have a much better understanding of local concerns and beliefs.
Corporate led expansion is still thought to be brutal with ruthless crushing of indigenous cultures by many in the global south. In order to be able to go into a place and extract its recources, you need to become popular. This can be done by building schools and forming relationships with people in the area. In this light, CSR is about security and bribery. (Litvin, 2003, Empires of Profit)
This raises the question, for what and for whom does business exist?
Blowfield (2005) says CSR has not only influenced businesses, it has also influenced development itself. “Business thinking has dominated the way we think about the world and has become the norm against which everything else is tested for true and false value”.
CSR spreads the values of capitalism:
- the right to make a profit
- the supremacy of private property
- the commoditisation of things
- the superiority of markets in determining price and value
Areas and communities that previously held different values are now persuaded that these principles are logical and the right way to live. Land that is considered sacred by a community is to be viewed as a ‘untapped resource’. Capitalist logic says all land should be used to maximise profits.
Keeping these views in mind, it becomes clear that corporations are economic, political and social actors.