Do Well By Doing Good
For 40 years the corporate world has embraced the doctrine of the famed economist Milton Friedman that "there is one and only one responsibility of business which is to engage in activities designed to increase its profits". In other words, CEOs work for stockholders and no one else. But recently, a group of 188 CEO's of America's most powerful companies met to discuss the purpose of a corporation. They concluded that businesses should be run to benefit "all stakeholders", that is, not only stockholders, but employees, customers, and society itself. In other words, companies should be concerned for the general welfare of the country, not just profits at any cost. This is what the social teaching of the church has long taught. Indisputably, free markets can be generators of wealth and progress, and have raised the living standards of millions of people around the world. But recent real world experience has undermined the belief that unfettered pursuit of profit invariably produces the best outcome for society. Banks reckless pursuit of profit triggered the landslide of the 2008 financial crisis. Big Pharma made billions by creating an opioid crisis that has ruined millions of lives. Fossil fuel consumption is altering the planet's climate. Executives cut themselves an ever growing slice of the economic pie while middle class workers get crumbs. Hopefully, CEOs follow through on their commitment to social responsibility. "Love your neighbor as yourself" should govern business practices too!