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The business of business is business, despite what some might think

Yet another obscure syndicalist organisation - has anyone ever heard of UNI? - is stamping its tiny foot over the mechanisms of global capitalism, and this time it is private equity with which it has beef: "The philosophy is buy it, strip it and flip it," Mr Jennings [of UNI] said. "It's all about value extraction and not value creation." Gosh, how wicked. I would counter with the words of the Sage of Lichfield: "No man is more innocently employed than in the making of money".

The weapon of choice in combating private equity is the touting of nostrums of 'good corporate governance', which in this case boils down to little more than moaning about 'social responsibility'. Companies have an obligation to their shareholders - c'est tout - and anything that they do beyond that should be a question of choice, not attempted blackmail. However, it gets better: "the rates of return expected by the new private entrepreneurs were incompatible either with good corporate governance or the fight against climate change".

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Anonymous verity said... 1:33 pm

These people make my stomach curdle. Corporations have no responsibility, as you rightly note, to anyone outside their shareholders. In a way, corporations are to blame for this strange misconception because around 15 years ago, they started whimpering about being "good corporate citizens". Of course, corporations aren't citizens, so they have themselves to blame, in one sense, for this confusion.  



Anonymous Colin said... 2:35 pm

Excellent, Croydonian.

Your post made me aware that this is a new deceptive strategy for plundering. If I understand it correctly, it is a kind of blackmailing. To avoid bad publicity, the targeted company has to comply with the demands, i.e. to somehow pay the attacker.

I am wondering how much of the numerous moral outrages about big businesses ! (little companies don't have enough money) reported in the MSM are attempts of blackmail.  



Blogger Croydonian said... 2:44 pm

The Left having failed to best free ranging capitalism with either nationalised businesses or through workers' co-operatives, the 'corporate social responsibility' movement is essentially an attempt to gain leverage over business by embarassing it into acccepting a shakedown based on the Left's agenda.

I may well do an extended post on CSR, but it would be hugely remiss of me not to point out that if one clicks on 'The Case For CSR' at the CSR.gov.uk site, it throws out this immensely amusing error message: 'Not Found
The requested object does not exist on this server'.
 



Anonymous Colin said... 5:32 pm

Croydonian,

"'corporate social responsibility' movement is essentially an attempt to gain leverage over business by embarassing it into acccepting a shakedown based on the Left's agenda."

Yes, you are right that is the most likely explanation.  



Anonymous Colin said... 5:38 pm

The link seems to work now. From the CSR.gov.uk site, I got to the corresponding EU site . Good to know that the Left is trying to improve the living standard in Europe by making European business less competitive. This is bound to become a success story in times of globalization.  



Anonymous Colin said... 5:51 pm

Croydonian,

You are going to like the applied logic of the EU commission. I found this perl at Resolution of the Employment and Social Policy Council on CSR:

"the Commission's view that a strategy to promote CSR should be based on:

recognition of the voluntary nature of CSR;

...

Emphasising that CSR is behaviour by business ...which should ... be properly enforced"
 



Blogger Croydonian said... 6:11 pm

Colin - Good spot. Thanks.  



Anonymous Anonymous said... 3:12 am

I am not sure that I entirely agree with the bald comment that companies have no responsibilities other than to their shareholders. While that is undoubtedly high on the list of priorities, surely their horizons must be wider than that? While I agree that they have no social obligations to support eg the local netball team or old folks' home, they must take account of the social consequences of their daily activities. For instance, I cannot believe that you would be silent should the local Croydon oil extraction company start dripping crude oil sludge all over the Whitgift Centre approach roads; or the local Coulsdon quarry spewing cement dust all over your back garden; or the roof of your local swimming pool collapsing because of corner/cost-cutting by the constructors. Social reesponsibility comes in different forms and companies do have to take account of them - even though they might be in the process of "extracting value" and ripping off everyone in sight! There is a difference between "social" and "corporate" responsibility.  



Blogger Croydonian said... 10:23 am

Anon - Thank you for your input, complete with a fine degree of verisimilitude. Naturally corporate entities should be subject to the law, and in the cases suggested, while I cannot immediately pin down the elements of criminal law that would be applicable, they would certainly fall under the tort of nuisance.  



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