Corporate Social Responsibility and Inequality in the 20th and 21st Century

Saturday, 4 July 2015: 10:15 AM-11:45 AM
CLM.2.04 (Clement House)
Daniel Kinderman, University of Delaware, Newark, DE
In 2010 essay Crouch posed the question: “Is CSR the noblesse oblige of transnational corporate elites?” To date, there have been few systematic explorations of this claim. My paper aims to fill this gap by assessing the relationship between the rise of Corporate Social Responsibility – firms’ voluntary engagement for social and environmental ends – and the dramatic rise of inequality that capitalist societies have witnessed in the last decades of the 20th and the first decades of the 21stcentury. I maintain that there is a systematic relationship: inequality is a powerful driver of CSR – not the only driver by any means, but a significant one nonetheless. 

One indication of the interconnectedness of CSR and inequality is the fact that national-level business led CSR organizations first originated in deeply unequal societies – Venezuela, the Philippines, and South Africa. Moreover, while corporate CSR officers are often lower- or mid-level managers, many business champions of CSR are high in wealth and social status. The importance of these corporate elites for the CSR movement should not be underestimated: as these elites have liberated themselves from the shackles of the postwar social order their power, resources, influence, and social engagement have grown. This is an important facet of the growth of CSR in the past three decades since historically, the rise of CSR coincided with neo-liberal policies which dramatically increased inequality in many countries.

As unions were weakened and marginal and corporate tax rates were reduced, corporate power increased and the rich became richer, and the social expectations and pressure increased for them to do something – or to at least seem to be doing something – to address societal problems: richesse oblige. One of the most striking examples is Hector Laing, a member of Thatcher's inner circle and one of the leading figures in British CSR in the 1980s. Laing was a member of the British aristocracy who frequently travelled using his private jet. He explicitly endorsed corporate paternalism and was proud to be seen as one of Britain's 'city fathers.'

But is this relationship generalizable? I use Piketty’s wealth inequality data and my own data concerning the membership in national CSR organizations to find out. The data reveal that there is in fact a significant relationship between the increasing concentration of income and wealth and firms’ engagement in and for CSR from the 1970s until the late 200s. This relationship is especially strong in very unequal countries. To sum up, this paper cuts against the grain of the received wisdom: CSR is very much compatible with inequality, rather than at odds with it. Whether this amounts to a blanket condemnation of responsible business practice is less clear: in a world already pervaded by massive inequality and the privatization of governance and of the public sphere, it is surely better to have ‘responsible’ business elites than irresponsible ones. But egalitarians should recognize that CSR is part and parcel of that system, rather than a more democratic and socially accountable form of governance.