NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, May 20, 2005

Are the capitalists abandoning capitalism?
Tomorrow, General Electric Co. — icon of American business and the most widely held stock in the world — will release its first-ever “Citizenship Report,” a 75-page bow to the bevy of nongovernmental organizations pushing for ever-more “corporate social responsibility.” The release comes just nine days after GE took the surprising step of self-imposing restrictions on greenhouse gases to combat global warming.
What harm is there in companies taking more responsibility for social and environmental problems? Plenty, if you adhere to the theories of Adam Smith, argued more than 200 years ago that the general welfare was better served by people pursuing their enlightened self-interest than by misguided attempts to serve society. The 20th century proved his point: Profit-seeking corporations, constrained and buttressed by moderate government regulation and spending, did far more to increase the welfare of the world than a proliferation of “socially responsible” governments. And the 21st century is proving it yet again: China’s embrace of Adam Smith has yielded the greatest alleviation of poverty in history.
Opinion found here.