By Dr. Michael Hopkins, CEO, MHC International Ltd.
It is a sad fact of our times that strident action with a hint of violence gains more attention than peaceful words. Today’s protests of Wall Street and big business certainly have a rationale as the distribution of income worsens in our major economies and the drivers of this mess, banks and financial institutions, emerge unscathed.
For many years the twin ideas of free markets and social responsibility to curb the excesses of the former have been in vogue. Believe it or not, the model has actually worked for many large corporations. As ever, those who pretend to act responsibly and some of those through published social or sustainability reports, have not helped an increasingly skeptical public – Enron, WorldCom, Madoff, Lehman Brothers, TepCo, etc. – to see that a radical change is taking place among many corporations – General Electric, Nestle, IBM, Ford, being some of these.
What has not worked has been government responsibility. Don’t forget that it was government that gave financial markets the opportunity to dice and slice mortgages through de-regulation. Followed soon after by the collapse of asset prices and a recession we have all experienced.
Lehman Brothers produced social responsibility reports extolling the virtue of their philanthropy but little else. The main manifestation of that normally being social or sustainability reports published on their websites. Yet, the incredibly powerful rating agency S&P ignores the topic completely.
It is interesting to see the Republican Party presidential debates in the USA. Each candidate, in pursuit of their dream of being head of government, preaches for smaller, or even no, government. Rare is it to see applicants for posts in other fields denigrate the institution they want to work for!
The result of this confused thinking led to the rise of the Tea Party, whose adherents wish to vastly lower taxes. Similarly, the reaction of Occupy Wall Street protestors believe their efforts will lead to improvements in the distribution of income, reduce poverty and create employment. Both have appealing platforms but misguided solutions. When interest rates are very low, government borrowing can be used to promote economic demand to lead to increased economic growth, incomes and employment. This can all be done with a more responsible and even a smaller government. It’s my belief none of us want a ‘Big Brother’ government that taps our Internet and phones, tortures prisoners, fights ridiculous wars and provides us with an incomprehensible tax code while reducing legislation for financial institutions.
We need a more responsible government that regulates Wall Street, but also one that increases spending to stimulate growth when times are hard. In fact we need both corporate and public responsibility to create the sorts of sustainable development we would all like to see across the whole planet.
About Michael Hopkins
Dr. Michael Hopkins is CEO and Chairman of MHC International Ltd., a research and service company on Corporate Social Responsibility (CSR) and Labor Markets. He is Professor of Corporate & Social Research at the University of Middlesex in London, UK and Adjunct Professor of CSR at George Mason University in Washington DC. Hopkins also is Founder and Director of Executive Programmes on CSR at the University of Geneva in Switzerland, among others.
Hopkins has authored 12 books, including The Planetary Bargain: CSR Matters (Earthscan, 2003) and CSR and International Development (Earthscan, 2007). His new book is on Strategic CSR (2012 forthcoming) where he widens the ‘corporate responsibility’ concept to all ‘bodies’ both private and public.
Readers: Should the Occupy movement be focusing on government instead of Wall Street? Tell on Talkback!