Pre-Industrial Revolution Social Responsibility Martin Addison - LS812 - 30 March 2015

Martin Addison - LS812 - 30 March 2015

Pre-Industrial Revolution

Social Responsibility


No Corporate Social Responsibility Decision-Making

• A firm focuses on one thing and one thing only - its profit

• This creates pressure to reduce costs by cutting costs internally

• The owners, managers and labour make their own personal charity decisions.– Is this is more or less democratic than forcing the

firm to give?


The Nation, The Community

The Law & Governmental Administration

IndividualLabour

Individual Manager

Individual Owner

The Firm

Charity

Charity

Charity

Profit

The Firm without Corporate Social Responsibility

Profit

Suppliers

Customers

Profit

Profit

Char

ity

Charity

Profit


Corporate Social Responsibility Decision-Making

• A firm giving to charity reduces its ability to reinvest, and its profit

• This creates pressure to reduce costs by cutting costs internally – this essentially represents a tax on labour

• Do the owners and / or the manager of the firm make the charity decisions?


The Nation, The Community

The Law & Governmental Administration

IndividualLabour

Individual Manager

Individual Owner

The Firm

Charity

Profit

The Firm with Corporate Social Responsibility

Profit

Profit

Suppliers

Customers

Profit

Profit

Char

ity

Charity

Charity

Charity

Charity


The Protestant Ethic

Premise:1. Stuff = Money2. Money = Labour3. Labour ≠ Free Time

Therefore:4. Stuff ≠ Free Time

And:5. Free Time ≠ Stuff

Where does charity fit into this equation?


Self-Interest and Selfishness

• “Fellow Feeling“ is crucial = sympathy• Bi-directional and inter-dependent sense of well-being• Self-interest = When you feel good, I feel good• The butcher takes care of his own self-interest, but

because he is not selfish he takes care of his clientele• Not all human actions are selfishly motivated; but he

understands that:– Altruistic actions are driven by a deep desire within the

self; and not by reason alone– This applies to all individuals


Relationship Between the Individual and the Entity

• Is business as an entity of men really different to the church, academia, military?

– "Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.” Smith: The Wealth of Nations (Page 286)

• What is the purpose the Church & Academia– To fund environmental studies? Homeless shelters?

• What about negative eudæmonia


Relationship Between the Individual and the Entity

• Structure of laws and administration limit all human endeavours:– Lag between innovation and legislation– Conversely creates a stable environment in which

it can grow due to predictability of some facets – The Navigation Acts were in place for 200 years.


On Defense

• Defense of the nation state is not just military in nature• More to do with “public interest”• Spending on the military nationally was good locally; and

business spending on infrastructure was good for military and for business– Of course, it is too bad that periodically the military has to be used

• Defense is dependent upon local capital• Surely, the more local the capital the better for a community• Boundary between public good and individual good


On the Nation

• Local government and County government was about to be radically restructured; but largely ineffective

• Closed communities all dependent upon a single business for profit– The Wentworth Estate

• What is good for the nation is good for the community and vice versa


Post-Information RevolutionSocial Responsibility

- An Alternative -


Smith gone wrong ……!

• Since the late 1970s the American middle and working classes have fallen further and further behind economically because policy changes in government favor the rich and super-rich

• Given little to no growth, skimming off some of the proceeds of growth to service the disadvantaged no longer works

• 1% vs 99%


The Individual Richest

• All together the 400 wealthiest Americans are worth $2.29 trillion - up $270 billion from a year ago:– Same as the gross domestic product of Brazil, a

country of 200 million people. • The average net worth of list members is $5.7

billion, $700 million more than last year and a record high.

– Forbes 400 (2014)


……and there are the business hypocrites(and we can’t get enough of them …..)

1. Yoko Ono Net Worth - $500 million. Tweeted: "I love #OccupyWallStreet. As John said, "One hero cannot do it. Each one of us have to be heroes." And you are. Thank you. love, yoko."

2. Russell Simmons Net Worth - $325 million The founder of a high fee credit card company called UniRush Financial Services visited the protests with Kanye West

3. George Clooney Net Worth - $160 million Says he also supports the movement against corporate greed, but admits he needs to educate himself more about the specifics.

4. Samuel L. Jackson Net Worth - $160 million While on “The View,” the 62-year-old Pulp Fiction star said: “I’m really glad when I look at those kids on Wall Street and I think, ‘Finally, someone got up and did something’. We used to be on the streets in the ’60s.”

5. Sean Penn Net Worth - $150 million Speaking on “Piers Morgan Tonight,” he says, "It resonates a great deal and in many ways. I applaud the spirit of what's happening now on Wall Street. I hope that increased organisation can come to it.

6. Jane Fonda - $120 million7. Roseanne Barr Net Worth - $80 million Tweeted: "The working class of this country were

destroyed by wall street as the middle class was encouraged 2 jeer at them & call them lazy"8. Deepak Chopra Net Worth - $80 million9. Kanye West Net Worth - $70 million Arrived to the protests in $1,000 jeans and a $300,000 car.10. Alec Baldwin Net Worth - $65 million Also the spokesperson for Capital One credit card


A Possible Solution: Predistribution

• Don’t wait until the $$ have been earned and then distribute.

• Distribute the earnings beforehand they land on a pay cheque.

• Focus on the voiceless middle classes.• Engineer markets to create fairer outcomes

from the beginning.


How to reinvigorate the centre-left?

• Jacob Stewart Hacker: Director of the Institution for Social and Policy Studies and Stanley B. Resor Professor of Political Science at Yale University

• Written works on social policy, health care reform, and economic insecurity in the United States

• Winner-Take-All Politics: How Washington Made the Richer Richer--and Turned Its Back on the Middle Class


The Precursor to Predistribution

• James Meade: Nobel prize-winning economist, in his 1964 book Efficiency, Equality and the Ownership of Property– older and more radical approach to predistribution – called a "property-owning democracy"– Looks to fundamentally to change individuals'

economic power within markets


Predistribution

• Focus on the economic engine of the middle class

• Fix the macro economy• Provide quality public services• Empower the workforce


Predistribution

• Acknowledges that:– The state cannot do everything– Vital place for active governance in the 21st

century economy– More than just softening the sharp edges of

capitalism by creating a positive role for the state (contrary to Hayek’s thinking)


Assumptions:

• Predistribution:– More on education and training to foster greater self-respect

and economic agency• Predistribution:

– Greater capital stake gives people the kind of independence that comes with being less in thrall to the vagaries of the labour market

• Predistribution:– Encourages those with a more secure economic position

(since they are freer) to refuse demeaning or badly paid jobs– this in turn bids-up wages and reduces inequality

Documents

Pre-Industrial Revolution Social Responsibility Martin Addison - LS812 - 30 March 2015