Why Corporate Responsibility is a Myth
People get mad at individual corporations a lot. The other week, a famous shoe company started running ads with a controversial football player in them, and that made some people very happy with the shoe company and other people very angry with it. These people wrote about the shoe company a lot, and by writing about the shoe company they gave it $43 million in free advertising. See, it didn’t matter to the shoe company which stance it took on the controversial football player–by taking any stance, it could induce the media to give it free attention, and that free attention translated into sales for the company. People thought the shoe company was taking a stand because of some kind of commitment to social responsibility–but this is a shoe company which has happily, for years, employed child labourers in sweat shops, stolen their wages, and verbally and physically abused them. But this isn’t because the shoe company is especially immoral–it’s because all companies are subject to a set of structural incentives which, by design, prevent them from taking moral considerations into account independently of their ability to contribute to revenue.