If advocates of social responsibility really wanted to improve people’s lot, they would encourage businesses to maximize —not forsake— profits. Their real motive, however, is not benevolence toward the poor; rather, they want to subordinate American business to a statist social agenda.
Advocates of corporate "social responsibility" want businesses and investors to serve an alleged "higher purpose". Businesses, it is argued, should sacrifice the goal of maximizing shareholder profits and instead look after the needs of society’s "havenots" —ranging from laid-off employees to any random group that claims a "stake" in the company. But contrary to the claims of such advocates, "social responsibility" is a poison that will harm us all.
Corporations must realize that they owe no debts to society. Wealth is created, not handed out from a social cookie jar that everyone has an equal claim to. Nor do the needs of others entitle them to your effort. Far from apologizing for the wealth they earn, owners and managers ought to be righteously proud. If you invest more wisely than others, you deserve every dollar of your profits. Corporations in which you invest are your property —not society’s— and it is your right to demand that they work to maximize your wealth.
By telling you to sacrifice profits, social responsibility advocates are demanding in effect that you surrender your opportunities for wealth and a happy life: a new car today, a college education for your children, a comfortable retirement.
Corporate social responsibility is the demand not merely to sacrifice the profit motive occasionally but to abandon it altogether, thus bleeding business owners dry. As a "socially responsible" storeowner, for instance, you must not manage the store for your own benefit, but instead sell goods at a loss because your poorest customers, who cannot pay full price, need them. You must never overlook any arbitrary need of any arbitrary "have-not" —you must think of yourself last, even if it means suicide for the business. Abandon profits, and the larger the corporation, the more losers there are.
It is a myth —and a central premise of social responsibility— that there is an inherent conflict of interests between rational shareholders, employees and customers. One man’s profits do not make another poor. On the contrary: a consequence of higher productivity and greater shareholder wealth is that the entire economy benefits. Higher profits mean increased job security and better pay for the good, productive workers, as well as better, lower priced products for all consumers. When stockholders prosper, the standard of living is raised for all.
Profit is moral, however, not because it raises everyone’s standard of living (though it does), but because you —as a stockholder— have a right to live for yourself and enjoy the fruits of your work.
If advocates of social responsibility really wanted to improve people’s lot, they would encourage businesses to maximize —not forsake— profits. Their real motive, however, is not benevolence toward the poor; rather, they want to subordinate American business to a statist social agenda. Observe, for instance, their loud denunciations of skyrocketing CEO pay, meant to induce guilt in CEOs and create public resentment. By planting distrust of business and by rousing the public’s anger, these advocates are leading us to ever more interventionist government policies. After all (they will argue), if businesses must be "responsible" to society, the government should wield its club and compel businesses to do their alleged duty.
What is the antidote to the poison of corporate social responsibility? Realize that profit is moral, and that you owe no debts to society. Assert your moral right to your own life, and to your profits. Refuse to become a sacrificial offering on the altar of social responsibility. Above all, do not shy away from the moral arguments —they are your best defense. Ayn Rand argued that philosophy was a life-and-death necessity of everyone’s survival. Today, no group needs philosophy more desperately than businessmen.