Good Samaritan Capitalism
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest," wrote the father of capitalism, Adam Smith. And the theory goes that self-interest makes the economic world go round to everyone's benefit. "The Good Samaritan as Bad Economist" is the wry title of an article by economist Donald E. Frey in the ecumenical journal Cross Currents. He notes the argument that even helping thy neighbor can be interpreted as self-interest on the grounds that aiding another pleases oneself. But he also notes the Biblical tradition that social morality is required as a counterweight to self-interest.
This is the challenging realm of motives and acts in which today's young MBAs - not to mention corporate elders like the J. C. Penney Company - are trying to conduct themselves according to their ideals. In May comes the fourth in a series of satellite conferences from the JCPenney Leadership Institute on School Improvement, which is trying to bring business expertise to school management as part of a commitment to corporate social responsibility. It is one of countless ways many businesses seek to be responsible citizens as well as responsible employers, managers, and producers of goods and services. If that be self-interest, we say go for it.
"The difference between good managers and good leaders is the difference between doing things right (management) and doing the right things (leadership)." That is the doctrine according to educator Mark S. Albion, guru to the expanding network of business graduate students and alumni in Students for Responsible Business (SRB) of which he was a cofounder. Begun by 17 MBAs in 1993, the San Francisco-based organization has grown to more than 800 members from more than 100 business schools.
"Not for 'hippies' or 'tree huggers,'" says SRB executive director Nancy Katz. "It's for smart business people who are looking for new ways to make business more ethical, more human, and more sustainable."
Surveys have found enough consumers interested in buying from companies with such business practices that some firms try to capitalize on the trend. Some declare themselves to be environmentally or socially responsible when they're not, says Ms. Katz. SBR members can help companies prove that genuine social responsibility is "win/win for everyone."
This means investors, too, as the American Medical Association (AMA) found after it discovered to its dismay that tobacco stock was part of a mutual fund in the employees' retirement program. AMA officials added a socially responsible fund (no tobacco, etc.) with comparable returns.
In that fund's portfolio, not unexpectedly, is the J.C. Penney Company mentioned above. If companies are trying to be socially responsible ... and so are enough business students ... and investors ... and consumers ... and if all are doing well, than maybe it will turn out that the Good Samaritan was not such a bad economist after all.