Persuasively documents how corporate America meets its social responsibilities.
Have you ever thought that companies who pursue the profit motive in their day-to-day operations might confer broad and measurable benefits to society? Probably not, because the media have influenced our perception of corporations as greedy, producing shoddy goods, polluting the atmosphere, exploiting workers, and promoting racial injustice-in short, corrupt, amoral institutions who are willing to make a quick buck at the expense of the broader community. This book sets out to prove the antithesis of these widely-held beliefs.
Wading into the long-standing debate about corporate social responsibility, the author approaches the issues surrounding business and the common good by examining business behavior in history and in the present day. He shows how businesses have become more socially progressive and responsible. With specific examples, he demonstrates how businesses can and do serve society through the pursuit of excellence, worker performance, competitiveness, innovation, and profit. He concludes that business can be viewed as truly "heroic" because of its unique means of solving social problems.
For an earlier version:
Commentators, analysts, and academics have long cherished the notion that there is a fundamental contradiction between corporate profit-seeking and ethical or social responsibility. In this powerful, long-awaited response to these critics, John Hood argues that business owners and managers have huge incentives to promote economic and social progress. Moreover, he finds, the vast majority do so. With compelling evidence, Hood demonstrates how the incentives of the private sector marketplace dwarf those of the public sector in advancing the common good. Replying to those who assert that firms must have social responsibilities beyond economic self-interest, Hood shows that corporations seeking economic rewards have made enormous strides on behalf of workers, families, consumers, and local communities by developing new products and technologies, discovering new ways to prevent workplace accidents, attempting to reduce bottom-line costs, and furthering their own long-term interests through social and community development. With detailed examples from nearly every sector of industry, Hood describes the significant contributions that most successful corporations have made to social welfare, without sacrificing their allegiance to shareholder value. By tracking the successful record of corporate involvement across a range of benchmark areas such as revitalization of the inner city, preservation of the environment, worker safety, and family values, Hood documents how businesses have brought about a wealth of positive changes to our communities. Hood turns the critics' concept of the "socially responsible" business, essentially a threat to free enterprise, on its head. Instead, by keeping a strong link between innovation and markets and competition, business continues to make its most serious social contribution by doing what it does best: providing the foundation for our standard of living and the new services that will allow us to live more comfortably and efficiently
From J. Daniel Hammond, Professor of Economics, Wake Forest University:
With an abundance of evidence from contemporary business practices, Hood shows how businesses serve the broader public interest when they aim to increase the wealth of their owners.
From Library Journal:
"In economics, free-market thinkers from [Adam] Smith to Milton Friedman have argued [that] the pursuit of profit by economic enterprises generates tremendous social benefits." With this thought in mind, Hood, vice president of a think tank called the John Locke Foundation and a syndicated columnist on business and public policy, sets out to update and revise Smith's Wealth of Nations. Hood describes the conduct and social effects of American business today, offering case studies and interviews with business executives that help define corporate social responsibility. Hood wants to demonstrate how businesses contribute and serve society, and he feels that society's belief in the "heroic enterprise" is essential if free enterprise is to survive and thrive. His arguments will make even those who oppose big business think twice. This important book will educate public as well as academic library patrons.Susan C. Awe, Jefferson Cty. P.L. System, Arvada, Col.
From Kirkus Reviews:
An upbeat and forceful audit that persuasively documents the many ways in which corporate America meets its actual and presumptive social responsibilities.
Hood (a Heritage Foundation fellow) offers an abundance of evidence in support of his premise that a prospering private sector confers great benefits on society. Arguing that the main responsibility of US business is to increase its earnings, he stresses that for-profit enterprises march to the beat of drums decidedly different from those of government agencies and charitable institutions. In this bottom-line context, the author does vigorous battle with activists who would instruct commercial concerns on their social responsibilities. Noting that philanthropy is crucially dependent upon a market system that can create wealth sufficient to be shared, Hood scoffs at the notion that companies should allocate capital to causes idiosyncratically embraced by either corporate executives or their critics. Nor does he accept the conventional wisdom that downsizing and layoffs have worsened the lot of American workers. Thanks to industry's greater competitiveness, the author points out, the domestic economy of the 1990s provides more employment and entrepreneurial opportunity than ever before. Along similar lines, he shows how enlightened (if toughminded) self-interest is inducing US business to play a more active role in education, the revitalization of inner cities, product as well as workplace safety, protection of the environment, health care, and the elimination of bias based on race or gender. Without gainsaying either the existence or persistence of socioeconomic inequities, Hood concludes that, as a practical matter, firms accountable to income-minded owners (in most cases, stockholders) do appreciably more to advance the common good than any advocates of programs reliant on other people's money.
An uncommonly sensible and evenhanded reckoning.
Profit-seeking and corporate responsibility are not fundamentally at odds, argues Hood, an up-and-coming writer based in North Carolina. In fact, they are intimately linked. Businesses motivated by economic self-interest have powerful incentives to promote the common good. Technological advancements in the private sector have improved everyone's quality of life, concerns for the bottom-line have made the workplace safer than ever, and a desire to retain loyal workers has inspired flexibility among employers. Filled with anecdotes, The Heroic Enterprise shows how the free enterprise system encourages businesses to do good by doing well.
In a quiet, unassuming manner, think-tanker and journalist Hood strikes both emotional and rational chords concerning the social responsibility of business. Key to understanding his passionate support of corporate America is his definition of the common good: that it must be seen in light of the goals of the specific institution, whether government, charity, or business. Hood offers success stories and statistics to prove that profit seeking is not immoral. Barbara Jacobs
Common sense on a subject that usually lacks it.
Since even before Milton Friedman famously contended that the social responsibility of business is to maximize profits, there has been a vigorous debate between those who believe corporations should put purported notions of socially responsible behavior ahead of profits and those of who are skeptical that doing so leads to desirable results. One of the chief tenets of the Friedman-esque position is that responsible corporate behavior is profit maximizing. That is, the private interests of the corporation and the public interest are typically congruent.
In this excellent analysis, John Hood convincingly demonstrates that compassion and capitalism are not inconsistent, but go hand in hand. Hood combines statistical evidence with telling anecdotes drawn from a plethora of industries to show that profit maximizing firms consistently also advance the common good. Indeed, by the end of Hood's text, one is ineluctably lead to the conclusion that for profit corporations have done far more good than government or nonprofits. Highly recommended.
John Hood is President and Chairman of the John Locke Foundation, Raleigh, North Carolina. He is also a syndicated columnist, television commentator, and a radio host. He has authored three books and written articles for national publications such as The Wall Street Journal, Investor's Business Daily, Nation's Business, and Reader's Digest, while also appearing on CNN, CNBC, Fox News, and other channels. Photo from the John Locke Foundation website.