Andrew Work (SCMP, 15th May 2007)
In my native Canada, politicians dress up desperately needed market measures in heart-warming, economically senseless language protecting the state’s role. In Hong Kong, where people are acutely aware of the benefits of free markets, the opposite is true. Even ardent socialists try to dress up woolly ideas in the language of the market. However, the ultimate agenda, state control of the economy, always shows itself in the end.
Corporate social responsibility is the most fashionable movement dressing up the statist wolf in sheep’s clothing. It is a hodgepodge of whatever anyone can think up that a firm should be doing to serve their interests.
Animal-rights groups will demand to know your policy of saving the whales. Feminist, race-based, and sexual-orientation groups insist you plan for advancing their constituency not only in the company, but in the community, as well.
Imagine the task of business executives and entrepreneurs. In the past, a good citizen conducted business honourably with workers and clients, obeyed the law and contributed to charity. Now, leaders must sort through endless demands from special interest groups to avoid being tarred socially irresponsible.
Corporate social responsibility rhetoric claims that this is voluntary and good for business. In Hong Kong, however, we see the wolf lying in wait.
Albert Cheng King-hon’s May 2 article on The Link reveals the ultimate agenda of corporate social responsibility. He claims that he would never undermine the market. To that end, he advocates the government buy back 25 per cent of The Link to ensure that The Link Management carries out its social responsibilities. He criticises a fellow legislator for advocating government intervention in the market. If stepping into the market to buy companies that do not toe the corporate social responsibility line is not state intervention, what is?
If one can justify government intervention in buying up The Link, then why not extend such ideas further and apply them to any company? Why not our newspapers and independent media?
Of course, our government has no intention of nationalising The Link or, we hope, any other company. Ideally, we would find ways to return more of our taxpayer-funded assets, like the airport, Ocean Park and water services to Hongkongers and other investors. This could create wealth for the good of our economy and its participants. More market offerings to a broad range of citizens would be ideal. Hong Kong people, wealthy and struggling alike, have shown their enthusiasm to improve their financial situation by oversubscribing to these initial public offerings.
The rise of corporate social responsibility, and the idea that the government should intervene where voluntary action is not forthcoming, can only damage our economy.
The business community and those who would see Hong Kong free and prosperous should not bow to the insatiable demands of the corporate social responsibility gang. Economist Milton Friedman called this weakness the suicidal impulse of the business community; the tendency to fund organisations that would undermine the foundations of a free market society.
Andrew Work is executive director of the Lion Rock Institute, a Hong Kong-focused free-market think-tank.