A self-denying argument

In today’s [Thursday} Fin (subscription required) Gary Johns continues the Institute of Public Affairs campaign against the idea of corporate social responsibility. The piece spends 750 words complaining about a Greenpeace exercise solely on the grounds that non-responses to a question were coded as zero.

The more substantive claim is that corporations should focus on making profits for their shareholders, and leave the shareholders to decide whether to keep the money themselves or to allocate it to worthy causes. One obvious implication of this argument is that corporations should stop funding organisations like the IPA. However much or little good the IPA does for Australian capitalism in general, its impact on the profitability of any individual corporation is clearly trivial. Hence, giving shareholders’ money to such organisations is a breach of the directors’ fiduciary responsibilities.

Update As Scott Wickstein points out in the comments, if shareholders want to support the IPA, they should do so as individuals.

3 thoughts on “A self-denying argument

  1. A good point. Of course, I’d just give the ABC the advertising tax levied on me by the producers of just about everything I buy.

  2. [Copying to new blogsite]

    “…I’m sorry, but the only time I see the assumption of perfection is when it comes from a mindless leftie (Clive Hamilton comes to mind) saying that neo-liberals believe it. I’ve never heard a neo-liberal argue market perfection…”

    And then a suggestion that I am approaching a straw man.

    But I was not in any sense commenting on people’s attitudes or beliefs. I was pointing out that this here example rests on a reductio ad absurdum, and that a crucial part of it involves the idea that markets say the bottom line is the true best measure rather than a way of estimating something underlying. The gap between reality and theory is what JQ was pointing up; it doesn’t invalidate either, and it doesn’t say anything about “left” or “right”. And neither did I.

    All this does show is precisely what you noticed, that you have to be a bit more careful. The warning is against taking things at face value, not against received positions coming from prejudice.

    Oh – and I didn’t say “…[were] perfect…”, I said “…[were] perfect ENOUGH…” (emphasis added). So, just who IS claiming that?

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