The Role of Business in the Modern World: Progress, Pressures and Profits for the Market Economy by David Henderson (PDF)

Description

It is now a widely held view that a new era has dawned in which businesses must adopt a new conception of their mission, purpose and conduct, by endorsing and implementing corporate social responsibility. In The Role of Business in the Modern World, Professor David Henderson argues if we ask businesses to achieve broader social goals, we risk undermining the very system in which business activity leads to opportunity and prosperity. Professor Henderson describes the unprecedented material progress that has occurred in the last century as a result of the wide-ranging entrepreneurial opportunities and competitive pressures that exist within a market economy. The material prosperity created by the activities of business is threatened by the ‘global salvationist consensus’ that has arisen in recent years and which seeks to change the role of business via the doctrine of corporate social responsibility. Professor Henderson shows that this consensus is based upon a set of fallacious beliefs about the nature of capitalism, profiteering and business enterprise.

User’s Reviews

Reviews from Amazon users which were colected at the time this book was published on the website:

⭐If you are a proponent or an opponent of the corporate social responsibility (CSR) issue, you will want to read this great book which is based upon a lecture series by the author.Henderson points out that the purpose of business is to drive the economic engine of society and that when NGOs and activists attempt to co-opt the corporation to other non-business purposes, society misses a key component in its development and is therefore sub-optimized.Indeed, he says that companies are not designed to be engines of social progress, and that when companies are asked by NGOs and activists to assume that role they can perform it very poorly.All analysts of anti-corporate movements should read this excellent work.

⭐Living in America as I currently do, I tend to feel like a disembodied brain. Currently there is a court case involving Enron, the MCI Worldcom case has recently ended and Martha Stewart is on television and yet there is no talk of corporate governance but daily reports of corruption in business and much less reporting of the widespread corruption in politics which is a fact of life here in New Jersey.David Henderson does a marvellous job of dissecting the arguments for Corporate Social Responsibility and, in the eyes of this writer at least, demolishes the whole notion of Stakeholder theory. I do not wish to reproduce the most salient points of his discourse but rather wish to focus on one point which he deals with towards the final pages of his work. That is not because I want to gloss over the work but I think that his coverage is worth persisting with and I would encourage anyone who works in any aspect of corporate business or public policy-making to carefully study this material at the earliest opportunity.My focus is on the notion of DIY (Do It Yourself) Economics which Henderson quite rightly distinguishes from academic economics or business economics but which is constituted of half-truths, fanciful notions held by many, both educated and not about economic ideas which they perceive to be true. I do not wish to denigrate any ideas or those who hold them as I recall, as a teenager, holding views about the kind of society I wished to see and some of the policies which I believed would be beneficial. Education and experience have jointly served to change these ideas which I can now justify with a great deal of rigour that I was unable to apply before. If I understand Henderson correctly, his contention is that collectivism has not died with the collapse of communism but has been transformed into interventionism through bodies like the United Nations and NGO’s (Non Governmental Organisations) to name just two. Policies in the name of equality and the environment are produced and passed by these organisations and are transmuted into laws through the treaties and agreements entered into by sovereign governments into domestc legislation. The impact of these is primarily felt by businesses in the first instance who are seen as the villains of the piece but which are later felt by the consumer through higher prices and diminished choice, not to mention job losses as some businesses relocate to avoid these demands.My departure from Henderson comes in two points. Firstly, although I support markets I amwary of the giant coporate bodies which dominate business life. Experience in America under the second Bush presidency has been illuminating in exposing the vast power of corporate business entities in corrupting the political system for their own ends, and in particular through the guise of “levelling the playing field” adjust the business environment to favour the indigenous business which they are attempting to do on a global scale favouring American firms. Competition is severely lacking and it sorely tests the strength of view of technological developments undermining established monopolies when the legislature is so biased toward these incumbents. My second point is in relation to regulation. By accepting a limited role for the state and the application of general rules rather than detailed rules, it is only to be expected that there will be a regulatory role for the state to ensure that the spirit of the rules is followed. Clearly Henderson is right when he advocates a reduced role of the state in business affairs but the implication is that there will be a greater regulatory role which can be bent, according to the political beliefs of the time, into a tool of state manipulation. The success of CSR is achieved when the vast majority of wealth producing countries accept the basic doctrines and apply them leaving businesses with nowhere to go except to absorb and include those reules and regulations.The challenge, aptly for the Institute of Economic Affairs under whose aegis this book appears, is to convince policy makers of the need to bring in general rules with the minimum of regulatory regime in order to achieve the accepted goals of environment or equlity or whatever, through market methods otherwise known as working with the grain of human nature.All in all this is an admirable little book which I would heartily recommend to the general reader.

⭐Very Interesting Book

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