Abstract
Corporate social responsibility (CSR) is a praised and promoted business behavior nowadays, widely understood as the entrepreneurs’ and managers’ attempts to make amends for some of the excesses that their economic activities bring about, for instance with regard to environmental negative externalities or to public ecological assets under-provision. It is of utmost importance to duly process and profess the CSR concept, one placed at a subtle interplay between business profitability and civic/social responsibility, between economic and ethical/legal realms, since the misrepresentation of economic agents’ benchmark of proper conduct might harm both social landscape and ecological environment. Still, despite its rich occurrence in scholarly literature as well as recurrence in business practices, CSR requires both further and thorough clarification, since many studies postulate that the free-market mindset is rather dismissive of CSR solicitudes. The current research paper fills such a sensitive conceptual gap by explaining why CSR regards are logically compatible with the free markets, with no reason to decree a market failure in this matter. The work takes the form of an analytical research, of an explicitly conceptual nature, based on praxeologically-deductive argumentation, documenting the fundamental compatibility of CSR with the free market order, populated by profit-driven capitalist corporations that, far from being reckless, are disciplined by the rule of law of clearly defined, defended, divestible property rights. As such, the plea adopted the methodological acquis of the Austrian School of law and economics. The main findings of the present study reveal that (a) in economic commonsense, the “profit motive” is the prima facia rule of judiciousness as the care for third-parties’ welfare can be ensured only after own well-being has been secured, while (b) ethically, “social responsibility”, as an extra-contractual duty, does build up on top of, not as trade-off with a robust property rights order.
Highlights
The environment is considered, in both mainstream economic and ecological paradigms, to illustrate “the common good par excellence”, as its maintenance is “the public service par excellence”
We will show that a more nuanced definition of the terms and deeper reflection concerning profit will reveal that Corporate social responsibility (CSR) is not necessary at odds with the interest of the entrepreneur/business owner. While this would probably be an impossible feat for a formal model to test out, we consider that a realist interpretation of the categories of human action and good old fashioned deductive reasoning can be used to great effect for arguing that CSR and entrepreneurial profit are more compatible than it might be suggested by the homo economicus type of behavior which characterizes the individuals who make the formal models work
At least two ideas can be noted from this study that brought to the fore some conceptual clarifications about CSR, with a focus on the environment-oriented discourse
Summary
The environment is considered, in both mainstream economic and ecological paradigms, to illustrate “the common good par excellence”, as its maintenance is “the public service par excellence”. The main assumption of this paper is that it is in the nature of corporate entrepreneurs/managers to behave economically, and socially/environmentally conscious and correct We infer that this extra-contractual responsibility drives the corporation towards higher and enduring profitability, which lets us demonstrate that CSR is perfectly compatible with the free-market mindset. A final section emphasizes the sustainable ties between profit-pursuit and CSR, as well as the only reasonable placement of (environmental) CSR in the specter of normative judgments, where it shall neither be confused with law-obeyance, nor misused as a guise for business over-regulation The originality of this analysis lies not in (re)inventing the wheel of classical liberal economic and political arguments, but in exposing these in a fresh manner in the context of the gone-global concerns about incorporating the bioeconomic vision into the production-consumption behaviors of the environmentally responsible economic agents. This should happen ahead of preaching and/or practicing sustainable individual and/or collective habits
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