Tuesday, May 09, 2006

A sharp CSR debate!

Whole Foods has reprinted a Reason Online double-team on its CEO John Mackey by Nobel laureate Milton Friedman and Cypress Semiconductor's T. J. Rodgers. The topic is corporate social responsibility and a whole lot more.

These gentlemen are way smarter than I will ever be, but the exchange (at least the one between Mackey and Friedman) seems to be a rhetorical argument where there are simply hard-to-quantify intangibles like purchasing goodwill and consumer loyalty. Whole Foods pays an arbitrary 5% of profits on certain days throughout the year. Mackey calls it social responsibility and Friedman, I think, calls it self-interest. I call it "enlightened self-interest" and I would like to see it grow.

I don't appreciate T. J. Rogers tone. He seems to forget that corporations can export externalities and costs that investors can't see. Yes, a bank that practices predatory lending to low-income areas, a gun company that sells assault weapons abroad in war-torn hell holes and oil companies that fight efforts to increase fuel-efficiency may be upstanding corporate leaders making high return on investment within the law, but the costs of their trade hurt.

In my humble, humble opinion, Mackey wins the debate!

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