We all know the adage “with freedom comes responsibility.”
Some of us belief strongly in a completely free market, where businesses are free to produce and sell with as little (or no) regulation from external parties.
I really don’t believe business as it is conventionally practiced should be trusted with rampant freedom to do what they have been designed to do.
What is the responsibility of businesses and corporations in a free market? And to whom?
A corporation as it is currently defined is a legal entity much like you and me. Its directors are charged with looking after its welfare, much like parents are charged with the welfare of their children. It is even illegal for a director to use the corporations name/goodwill to benefit him or herself for example.
Unlike you and me, a corporation only has a very limited purpose – and that is to make money. Imagine if your sole purpose in life is to make money – and you don’t have an ego to pander to nor do you care about food, sleep or sex. What sort of person would that make you?
Large multinational corporations also wield a lot of power – both financial and political. More so than many actual nations.
And so, if the primary responsibility of corporations is to make money for their shareholders, and they have huge influence on our collective welfare, is this not tantamount to having psychopaths run our world?
This one-track mentality also explains why a for-profit business model is ill-suited to running public service institutions like education. Face with a choice between greater profits and doing a good job educating kids, I know which side a business would choose.
Of course I am deliberately polarising the concepts here for the purpose of illustration. Thankfully the free market is not yet as utterly free as its proponents would like. Thankfully there are good people within corporations who insist on doing the right thing at the expense of more profit now and then.
What would be great is if we can redefine business practice to incorporate, at a fundamental level, ideals of social and environmental responsibility; such that corporations of the future will be responsible equally to shareholders, employees, communities and the planet. Perhaps only then should corporations deserve to be recognized as legal entities.