Alfred Marshall: Founding theorist of Corporate Social Responsibility/Shared Value and social enterprise

Who knew that Alfred Marshall published an essay entitled “The Social Possibilities of Economic Chivalry” (1907) (pdf)? I didn’t until I came upon it the other day. Having now read it, it’s thoroughly Marshallian – very much of a piece with his dissenting meliorism which I discussed here and which runs like a thread through mainstream economics from Smith through Mill to Marshall and (at a pinch) to Keynes, with economics staying true to its roots in enlightenment moral philosophy.


In any event, the way Marshall couches his case is very dated, as indeed is his choice of the idea of chivalry to convey his meaning. I was rather taken with it as a rhetorical or linguistic stratagem. There’s something to be said for ideas and terms that have some history behind them. There’s nothing much that’s all that new in the world and it’s healthy to remind ourselves that human history, even Western history, even modern Western history is long. Within that tradition, there’s nothing much new under the sun, though there are new takes on things, new interpretations of circumstances.

In any event, he takes chivalry rather further – rather more seriously:

War is more cruel even than competition to oust rivals from their work and living; but there grew up around it a chivalry which brought out the noble, emulative side of war, and even something of the finer sympathies. If in the Elysian fields a mediaeval warrior be now discussing with late inhabitants of worlds many billions of miles away from our own the experiences of his old world, he may hold up his head as he speaks of the chivalry of war, the thing that occupied people’s imagination most in that age.

As the Duke of Wellington, upon being greeted as “Mr Brown I believe” once said “If you believe that, you’ll believe anything”.

I certainly find it hard to believe, but perhaps Marshall was trying to tap into the neo-gothic zeitgeist as primed by mid Victorians William Morris, John Ruskin and, somewhat earlier, Sir Walter Scott. In any case it’s hardly relevant for our purposes. The point is that Marshall is exploring the scope for social good to come from the good intentions of those whose main day-job is to pursue profit. That idea has surfaced on and off, and now very much on, in the guise of corporate social responsibility (CSR) and/or shared value and social enterprise.

Thus Marshall observes:

I want to suggest that there is much latent chivalry in business life, and that there would be a great deal more of it if we sought it out and honoured it as men honoured the mediaeval chivalry of war. If we do this for a generation or two, then people bringing the latest news from this world may talk boldly of the chivalry of wealth: they may be proud of the elevation of life which has been achieved by training the finer elements of human nature to full account in the production of wealth and in its use. Chivalry in business includes public spirit . . .  1ut it includes also a delight in doing noble and difficult things because they are noble and difficult. . . It includes a scorn for cheap victories, and a delight in succouring those who need a helping hand.

Most modern proponents of CSR and social enterprise tend to situate their thoughts in a fairly apolitical and indeed ahistorical context. They don’t say how their thinking relates to more ‘traditional’ means of achieving social benefit except in so far as they might observe that modern ‘one size fits all’ government or ideology isn’t solving ‘wicked problems’ etc. It’s interesting to speculate how much CSR and social enterprise might be able to substitute for and/or augment such things.

Marshall’s outline of economic chivalry might also have been called “Why I’m not a Socialist”. In fact as Karl Fugelso observes Marshall’s essay devotes as much if not more space to a rejection of collectivism as it does on its subject. Marshall says he is a Socialist in the sense that J.S. Mill was a Socialist: That he, along with so many in his profession “desire increased intensity of State activity for social ameliorations that are not fully within the range of private effort”. But he stops short at “that vast extension of State activities which is desired by Collectivists” even though he has “watched with admiration the strenuous and unselfish devotion to social well-being that is shown by many of the able men who are leading the collectivist movement”. But, for all his admiration he is:

convinced that, so soon as collectivist control had spread so far as to narrow considerably the field left for free enterprise, the pressure of bureaucratic methods would impair not only the springs of material wealth, but also many of those higher qualities of human nature, the strengthening of which should be the chief aim of social endeavour.

The other part of his case is that, very much as activists now do in punishing companies for base behaviour, and seeking to encourage the consumption of ‘ethically’ produced goods and services, the court of public opinion can be economically influential. In addition to ordinary ethical business . . .

there is also much getting of wealth that is not chivalrous, and much expenditure that has no touch of nobility. . . . An endeavour should be made so to guide public opinion that it becomes an informal Court of Honour. Then wealth, however large, would be no passport to social success if got by chicanery, by manufactured news, by fraudulent dealing, or by malignant destruction of rivals: and that business enterprise which was noble in its aims and in its methods, even if it did not bring with it a large fortune, would receive its due of public admiration and gratitude; as the work of the progressive student of science, or literature, or art does now. The discriminating favour of the multitude at Athens and at Florence gave the strongest stimulus to imaginative art. And if coming generations were to search out and honour that which is truly creative and chivalric in modern business work, the world would grow rapidly in material wealth and in wealth of character. Noble efforts would be evoked; and even dull men would gradually cease to pay homage to wealth per se without inquiring how it had been acquired. Wealth-getting by sordid means would not win its way in society, nor in popular favour . . . . Sordid practices would then prevent wealth from yielding that social éclat for which sordid men chiefly prize it, and would go out of favour with men of ability and common sense, however devoid of high principle.

So at least it all hangs together (apart from the idea that medieval military life was really about being a Nice Guy which sticks even in my craw!). One can think what he wrote ridiculously, Pollyannaishly optimistic, but then what he’s engaging in is rhetoric – persuasion. He’s urging his readers not just to adopt his point of view but thinking that if they do so they’ll be contributing to a better world. The discipline he helped build existed happily at the time against a cultural backdrop in which the kind of ‘virtue ethics’ he evinces were a commonplace. Schools, governments, institutions generally existed to embody and so to teach good character and the idea that ultimately those of high standing aspired to the higher things in life.

And his conclusion was simultaneously modest, benign, inspired and inspiring:

If we can educate this chivalry, the country will flourish under private enterprise. Or, should collectivists succeed in showing that human nature had at last been so firmly based in chivalry that their great venture might be tried without running violent risks, some other civilization than that which we can now conceive may take the place of that which now exists. It may, of course, be higher. But those who believe that all the commerce of the world will ere long be carried through the air should make a few aeroplanes carry heavy cargoes against the wind before they invite us to blow up our railway bridges. For similar reasons it seems best that the difficulties of collectivism should be studied much more carefully, before the scope for creative enterprise is further narrowed by needlessly intruding collective administration into industries in which incessant free initiative is needed for progress. Thus the end before us is a great one. It calls for steady, searching analysis, and for a laborious study of actual conditions. Economists cannot do it alone. Perhaps it may be found that their share in it will not be large, but I myself believe it will be very large. I submit, then, that a most pressing immediate call on us is to associate in our own minds and those of others economic studies and chivalrous effort.

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