Corporate social responsibility, morale, power and the ascent of man

Margaret Simmons had a lead article in Crikey recently in which she quoted Mark Day bemoaning the way in which, in his view Packers gaming interests were tearing apart the corporate culture of Channel Nine. As Day put it

I believe media is a positive force in society while gaming is a profound negative.

Take a walk through Packers plum gaming asset, the Crown casino in Melbourne. It is a soulless place that never sees sunlight; it is where bright lights flash and entice you to part with your hard-earned and then more; it is where mothers park their kids at the door as they throw away the housekeeping; it is where the come-ons shriek Win! Win! Win! in the face of the statistical reality that youll lose, lose, lose.

I regard the media as it is now as an awful institution, but am happy to accept Day’s and Simmons’ suggestion that at least it’s ‘mission’ is a worthy one. It has certainly had its attraction for idealists in the past and even (increasinly surprisingly) today. Days point was punditry the suggestion that Packer might sell off his media interests and focus on gaming. And Simmons point was to argue that that was well and good. It led me to wonder about the link between productivity and employees thinking that theyre doing something worthwhile.

Id like to wax lyrical and profound on the subject but, even if I were capable of it I dont have the time. But I do think theres a link, as soft and difficult to understand and to prove as it is and wanted to offer a few loosly connected thoughts.

For Warren Buffett whom I’ve just written about some sense of the social utility of what his businesses produce and the way they treat people is important because it is part of a larger picture in which people behave honourably, keep their promises and their trusts. Its part of a world in which, despite the ability to take advantage in the short term, managers manage as if they were trustees for owners. This is also a part of that larger picture where employees and managers understand that their interests may not be not the same, but understand just as well firstly that they have direct common interests in their joint productivity and that they have more diffuse common interests in decent, honest and ethical behaviour towards one another.

Adam Smith too presented a story of humanity in which human freedom and autonomy grew together with sociability and economic productivity. At one extreme Smith exposed the micro-economics of slavery as a system of labour that looked the cheapest but worked out as the most expensive because the slave had no incentive to better his productivity as the proceeds would go elsewhere. He might even take some more abuse or beating for laziness either before hand (why didnt you propose this before?) or after some suggestion is made (you are just suggesting this because youre lazy?). But Smith also showed how the commercial system diffused power and how people behaved better (even when they behaved rather frivolously in pursuit of baubles) with economic power diffuse rather than with it concentrated.

Eric S. Raymond who wrote the Cathedral and the Bazaar about the miracle of open source software wont work in other than open source software for reasons of job satisfaction. Open source – again an environment in which coercion and power are minimised – produces for him greater satisfaction and much better software. I think that one problem Microsoft may have in meeting the challenge of the Googles of the world is that it has built its success on a predatory monopolistic culture whereas Google’s is much more open and philanthropic (yes philanthropic – Google makes piles of money for its owners but as part of doing so it pays employees to spend a not insubstantial part of their time on philanthropic projects of the employees’ choice. Intriguingly Gates is I presume a philanthropist on a greater scale than the founders of Google but thats as the owner of Microsoft. I dont think it helps corporate morale much to say to coders were keeping your code secret and not doing as good a job as we might and users may still hate you, but thats so we can give more money to the starving millions).

And I was reminded of all the possible connections by another quote on slavery. Economists have an enviable reputation as traducers of slavery it was in the context of their attacks on slavery – their preference for that horrible impersonal cash nexus between employer and employee over domination of master over slave – that Thomas Carlyle was sufficient ly enraged to dub their discipline the ‘dismal science’.

An Irish economist J. E. Cairns, wrote a powerful book on Slavery called The Slave Power around the time of the American Civil War. In it he went much further than Smith arguing that the domination of slavery poisoned the whole society. But the quote I want to leave you with is not from Cairns but from Alexis de Tocqueville sailing down the Ohio river in the mid 1830s.

The traveler who floats down the current of the Ohio may be said to sail between liberty and servitude, and a transient inspection of surrounding objects will convince him which of the two is more favorable to humanity.

Upon the left bank of the stream the population is sparse; from time to time one descries a troop of slaves loitering in the half-deserted fields; the primeval forest reappears at every turn; society seems to be asleep, man to be idle, and nature alone offers a scene of activity and life.

From the right bank, on the contrary, a confused hum is heard, which proclaims afar the presence of industry; the fields are covered with abundant harvest; the elegance of the dwellings announces the taste and activity of the laborers; and man appears to be in the enjoyment of that wealth and contentment which is the reward of labor. Upon the left bank of the Ohio labor is confounded with the idea of slavery; while upon the right bank it is identified with that of prosperity and improvement; on the one side it is degraded, on the other it is honored.

These are the negative costs – many of them externalities – of abusive relations between humans.