Corporate social responsibility and offshore labor practices

Corporate Citizenship

Milton Friedman's 1970 worldview would be and ought to be rejected by today's corporations, many of which are embracing a Corporate Social Responsibility (CSR) program in response to consumer objections to practices and principles of various entities. From Enron to Pepsi Co. to Exxon Mobile to Pacific Gas and Electric (the case that involved Erin Brokovich) -- companies are constantly in the spotlight now thanks to the Digital Age revolution, which allows users of social media to spread information across the globe in seconds and to unite and communicate in ways never before possible. Thus, what is being witnessed is a unified demand from not just consumers but from people all over the world. Indeed, when Friedman identifies the issue of "social responsibility" as a political maneuver (a "socialist" maneuver), he misses the point. It is not political, but human: corporations have a social responsibility because it is society, ultimately, that they depend upon. If the corporation puts itself first (as a "citizen"), before its workers and before its public and community, it will eventually destroy that which should nourish it.

The trade agreements known as NAFTA and GATT are perfect examples. These agreements allowed large corporations to off-shore their facilities in places like China (Apple does this, for instance) so that it can profit from cheap labor. The products they manufacture are then shipped back to the West and sold at ever-increasing margins to consumers all too happy to pay ever-increasing prices for a product that will be replaced in a year with another, newer, better model. Eventually, however, peak buying sets in. There are no more consumers. Why? Because there is simply no more money. The corporation, by going off-shore to guarantee more profits for itself, neglects the very community it wants as consumers. By not hiring the people in its own community or market and thus ensuring that they work and have disposable income for such products, the company is basically guaranteeing that it will see limited profits for a limited time.

If the company were socially responsible and put the community first, it would not go off-shore in search of better profit margins by hiring cheap labor; it would respect its own community and the fundamental concept of market economics -- which is that if you want people to buy your product you had better help see to it that they always have money in their pockets. By taking jobs away from them, you only help to destroy the local economy. Who, for example, does Apple think it will be selling its products to in 5 or 10 years? China? Its market is imploding under a mountain of debt. The West? The West has enough Apple products to last it a lifetime. Obsolescence may not be as easy as such manufacturers used to think.