CSR Self Regulation

CSR Self Regulation

Corporate Social Responsibility (CSR) while sounding ethical, has many unethical features. Another fraudulent use of CSR is as a tool to reduce regulation. Advocates of CSR claim it is a form of ‘CSR self regulation’. Voluntarily going above and beyond government regulations.

As capitalists have repeatedly stated, it is the job of the government to impose taxes, spend on social programs, and enact regulations. These government regulations protect the environment, the worker, the consumer, etc. These regulations are imposed on businesses, and usually restricts them in some way. So when a business claims its responsibility to voluntarily go beyond those regulations, it is an interesting situation. If regulations restrict and impose costs on industry, why would they impose even more costs and restrictions on themselves?

As history demonstrates, responsibility is normally used as a pretext for de-regulation and to prevent new government regulation.

Responsibility & regulation in Nazi Germany

csr self regulation

As World War 2 grew difficult, the Nazi regime pressed its industry to produce more war material. However, businesses were handicapped by the regulations and restrictions imposed by government and Nazi Party officials . The young Minister of Armaments, Albert Speer, needed a way to keep the bureaucrats from interfering with industry. Speer couldn’t openly de-regulate or offend the Party. Instead he tactfully implemented the system of Industrial Self-Responsibility.

This system sounded harsh, it meant industry had to meet the demands placed on them, or face consequences. Speer even threatened to use the SS to ensure that businesses met their responsibilities. However in practice, industrial self-responsibility meant autonomy for businesses. It kept the government and Party officials from interfering with industry. Free from government regulation, industry used this autonomy to increase production.

Similarly, CSR Self Regulation sounds like additional regulation. But in reality, it keeps out real government regulation.

Responsibility & regulation in Communist China

After the communist takeover, farms in China were collectivized in large communes. Market capitalism was forbidden. This was a catastrophic failure, causing mass famines. Reformist government officials needed a way to reverse collectivization and return to a pre-communist way of farming. However, in Chairman Mao’s communist state, this was unthinkable. The communist collectivization had to be reversed, but under a different, unoffensive name. The Household Responsibility System was started.

Again, it sounded harsh. But in reality farmers and local managers had more autonomy in production. They could even sell the surplus in markets at unregulated prices. This was outrageous capitalism, but it had a reassuring name, the Household Responsibility System. 

Some have called this tactic: Signal Left, Turn Right. Imitate the rhetoric of Leftists, while the actions and effects are right wing. The Communist Party of China has used this tactic to create a booming capitalist economy. CSR Self Regulation

Enter CSR Self Regulation

In this context, it is no surprise to hear business-folk repeating leftist slogans about saving the world and solving social injustices. Corporate Social Responsibility is a classic ‘signal left, turn right’ tactic.

By creating a guise of self regulation, they give the impression that no new government regulation is needed. This allows businesses to ‘regulate’ themselves in a way that suits them. It’s also useful in advertising, brand management and keeping out new competition.

Leftists would argue that this addition CSR self regulation is needed because current government regulation is not enough. Milton Friedman answered this point in 1970. Current government policy reflects the democratic elected policy. If that isn’t enough for the left wing, it is because the electorate doesn’t want leftist policy. Adding extra regulations outside of the government is the policy equivalent of extrajudical or vigilante justice.

Right wingers may argue that since CSR prevents new government regulation, it achieves a good aim.
However, by subverting proper government regulation, CSR self regulation subverts capitalism. Capitalism relies on a level playing field with the government setting standards for fair business competition. By letting businesses, the players, set their own rules the playing field will be unfair.
CSR also implies that there is something wrong with profit seeking businesses. Functioning as an apology and atonement. Capitalism needs no apology.

Read criticism on the concept of a Social License to Operate.