Can capitalism save the world?

3 11 2010

Recently  David Cameron spoke to the CBI and urged the private sector to step into the void which will be created by the government’s devastating cuts to public services.  Leaving aside the fact that the private sector, in the form of the global banking system, caused the financial crisis that necessitated a government bail out and caused the huge hole in the public finances, is there any possibility that capitalism can save us all?

Two things this month.  The Chilean miners, when rescued, were wearing Oakley sunglasses – Oakley Radar to be exact.  The sunglasses that were deemed to be essential to protect the eyes of the men who had spent the previous two months in the dark, were provided by a commercial organisation, free of charge.  This is clearly an act of altruism on the part of the company – one which has garnered them millions of pounds of free publicity as the image of weary miners and that of the President who insisted on wearing the sunglasses as an act of solidarity with the men, was beamed around the world’s news networks,  filled the front page of every newspaper and dominated the internet for days.

What should we make of this?

Product placement has been an integral part of film and TV for decades.  Should we really be surprised that the practice is now filtering into our news networks?  And is it actually something to be encouraged, as it did result in the miners getting the protection they required at zero cost to everyone but Oakley – whose donation of sunglasses cost the company less than £10,000.

And if you have had cause to spend any time on any British High Street this past month you cannot have failed to notice the profusion of pink.  October was breast cancer awareness month with every company, or so it seems, producing pink versions of their products in support of the campaign to raise awareness of breast cancer.

On the face of it, this is a good thing, surely?

I am becoming less convinced.  I am finding myself questioning the nature of this campaign.

The profusion of pink and the proliferation of fun ways to raise money trivialises what is a devastating, nasty illness by showing the smiling faces of fundraisers and their sponsors and further belittles women by presenting images of boobs and bras that  continue to titillate.

All of this pink fundraising also risks taking our attention away from the failure of the state to dedicate sufficient funding to research into cancer prevention and to support women and their families in the treatment and recovery process.

Is it reasonable that companies are able to sell more of their iffy merchandise on the basis that a small portion of the product price will be given to a charity?

Is this David Cameron’s ‘Big Society’?  One where commercial companies boost their sales and support areas of the public service that should really be provided by the state?

I haven’t reached a conclusion with which I am happy but I do believe that it is a debate worth having as our public services face cuts and possible collapse.

Do we really want private companies to step into the gap and if we do,  shouldn’t we first establish guidelines lest we drift towards disneyfication of our public services?

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2 responses

21 11 2010
Hollie Smith

Another aspect of ‘capitalism saving the world’ that fills me with a similar torn feeling is corporate CSR policy. Was Friedman right in saying that “The only social responsibility of business is to increase its profits.” Many academics argue Friedman’s statement no longer holds relevance in the fast-paced developments of CSR and the importance that it holds. Corporations are no longer solely profit-driven; they can’t be due to the new complexity of the global market place. A triple-bottom line is status quo; people, planet and profit or economic, ecological and social, it provides an expanded spectrum of criteria and values for measuring corporate and societal success.

There exist many problems with CSR, the first being that mainstream CSR lacks an understanding of the wider discursive power/ ideological debate. There exists the worry that corporations as there CSR develops are replacing government roles but without external regulation, there is therefore “a general failure to understand the historical and structural power of the firm leads to foundational assumptions that uncritically accept the firm as an axiomatic component within global rule and policy making structures and processes.” The corporation becomes powerful out with the global markets through CSR but is relatively unregulated in this sphere.

A second problem that exists is the lack of understanding as a form of legitimacy. Businesses like to appear legitimate by building partnerships with NGOs and discursively positioned partnerships with all stakeholders, appearing themselves to be part of this “citizenship discourse that assumes a harmonious set of shared macro goals.” There is a fragile line that separates the scepticism in neo-liberal economics and general worry over the future of the planet from widespread fury and demonstration against big business.

The most significant problem that arises with CSR is the rhetoric vs. Reality concern as there is a high incidence of corporate irresponsibility. This is due to a number of reasons: corporations are lacking in a moral framework, they often promote or claim one thing but are caught going against these claims, they choose not to do things that could be done by other actors e.g. governments, NGOs or communities, they often cover up negative actions by flooding it out with positive (but token) examples of positive actions and promote vague societal and environmental pledges and persistent rhetoric even when the evidence does not match the nature of the claims, “there is mounting evidence of a gap between the stated intentions of business leaders and their actual behaviour and impact in the real world”

We could use the example of Royal Dutch Shell as evidence of this problem; it was one of the first multinational corporations to develop a CSR strategy and therefore was a pioneer in this sense. In Shell’s CSR strategy they claim to create ‘sustainable development’, ‘cause no harm to people’, ‘protect the environment’, ‘report and consult’ with communities and NGOs, uphold the ‘best practices’ and promote ‘diversity and inclusiveness’. (Shell 2006). Shell Nigeria have won two corporate social responsibility awards in Nigeria: ‘SPDC emerged Best Company in the Poverty Reduction and Child and Maternal Health categories at the annual Social Enterprise Report and Awards (SERA) ceremony’ (Shell 2010). Other success stories include ‘SPDC Supports Deworming Exercise in Bayelsa State; 10,000 School Children to be Dewormed’ and ‘SPDC Hospitals Get International Accreditation’ (Shell 2010).

However, no matter how developed Shell’s CSR policy is, oil operations will always carry adverse effects that pose damaging threats to the environment at every individual stage of the supply and production chain e.g. exploration, transportation and refining. Third-world countries such as Nigeria have experienced disproportionate damaging effects comparatively with developed countries from oil-related pollution. ‘Nigeria is reported to have had over 300 oil spills per year in the early 1990s, many more than in the developed world’. Oil producing areas in Nigeria are the worst hit where local communities are frequently deprived of any way of subsistence due to construction of access roads, diversion of river, polluting of water supplies, destruction to private property and agricultural land, increase in local food prices and prostitution (and therefore also HIV/Aids).

Although Shell Nigeria claims to re-invest its profits back into local communities, the real figure of re-investment currently stands at ‘0.000000007% of profits that is pumped back into the community.’
There have also cases where oil spills that have affected local communities due to defective and old oil pipes in need of repair or upgrade have been blamed on sabotage by these local communities to avoid bad press and pay-outs of damage compensation.

I believe that this case study highlights that CSR is completely undermined by the real objective of a corporation like Shell which is profit. It uses CSR as a miniscule token gesture but exaggerates its effects to legitimise itself and its actions, using the few success CSR stories to try to cover up the many negative effects that it is responsible for. CSR is also a unique selling point for Shell as it promotes the corporation as being ethical to consumers, and in today’s markets, ethical companies tend to sell and survive longer. However, it is clear to anybody who scratches the surface of rhetoric vs. Reality for Shell and almost all other corporations’ CSR policies, that there is only one bottom line and that is profit and alas Friedman was correct after all!

21 11 2010
the3rdi

Thanks Hollie,
And it seems capitalism wins again as google ads is now serving an Oakley ad alongside this blog!!

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