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The Dichotomy of Business and Charity

There are several competing views on capitalism in America. There are those against it, the extreme being Marxism, which would claim it is solely the manifestation the “haves” oppressing the “have-nots,” The competing group, the quasi-marxists, are over-critical attitudes who are mostly found throughout academia and in books and movies such as Freakonomics or Michael Moore’s Capitalism: A Love Story.

The negative view has a much stronger influence on discussion in America, particularly in recent years. There are those who view it neutrally, which can come from people who are generally apathetic towards capitalism (not to be conflated with those who do not think critically about it). And then there are those who view it neutrally due to a balancing of its pros and cons. This can come from a more broad attitude of centrism that sees valid arguments from those for and against capitalism, but it can also come from less relevancy placed on material economics. The latter position can come from a variety of worldviews like that of Edmond Burke’s paleo-conservatism (which places much more value on things such as religion and tradition), or Christian theology (which places much more attention to the individual soul and virtue than political economy). Christian theology can also be found to have a negative attitude towards capitalism, in that capitalism is a manifestation of a “consumerist” worldview that attempts to replace God with material well-being. Then there are those who view capitalism positively, which normally manifests from a nationalistic perspective that capitalism must be good because it is intertwined with the American identity, or from the Austrian school of economics which views capitalism as the best power structure in accordance with a constrained human nature to achieve a positive result. There’s also the individualist perspective that the freedom found in capitalism is an end within itself whether or not the world becomes “better” because of it, or from a more developmental economics that views capitalism as the best route to social good. There are likely many other positions on capitalism, but these seem to be the most dominant and distinguishable ideas on capitalism in contemporaneous times.

I bring up this context of capitalism and our views on it to distinguish it with a separate plane of thought on business. There is an idea – an extremely pervasive one – that businesses ought to cater to what is socially good. This is the idea that businesses should contribute to charities, or even more directly that businesses should act in the world to bring about justice and the social good for those they can influence. This is the idea that in natural disasters, price gouging is wrong because the supplier should just offer the product for a price that is more kind and charitable to the plight of the demanding party. This is the Facebook philosophy in how they decide to punish publishers of what they deem to be “fake news.”

Pursuing what is just, giving to charity, and leaving a positive mark on the world ought to be fervently pursued outside of business. To clarify so that my argument is not mistaken or conflated, I wish to see a more just world with higher rates of charitable giving where more people tend to work for the good of humanity. However, business is the worst route to go about accomplishing these tasks.

When we enter into a discussion on how to best go about justice, naturally the question becomes: “What is justice?” If you have ever read a book on the matter, you know there are an infinite number of answers to that question. Given the variance among the influences and life experiences of all people, it stands to reason their derived ideas of justice may be quite different. However, there are many fundamental agreements among a strong majority of people: most of these agreements come from our biological impulses of survival. These biological impulses present in all humans do not fully shape our ideas of justice though. The question then becomes: “Whose definition of justice do we pursue?”

This is the inherent problem with pursuing justice via business. Justice is a political issue, no doubt, so then we must view the political structure of a business. There are only two functional ways power can be dispersed in a business: oligarchy or dictatorship. A functional business can either be run a sole proprietor (CEO), or a board of members. This would mean that we are ceding all of our political power as a society to define what is good and just to the CEO or board of these companies. This is an utterly elitist argument, but the people making it may not realize it.

One caveat I will add to this view of business and justice is to the actual money-making practices of the business. Individuals within a business should always watch to make sure the monetary incentives of a business do not lead it to do evil things, like Google’s mantra of “don’t be evil” suggests. Furthermore, anything found to be evil in a business should be punished by leaving the business, whistle-blowing, or whatever is most appropriate to the situation. This acts as a check on the dictator or oligarchy’s power, rather than expanding it.

Instead of businesses giving to charity, they should give more profit to their shareholders, which currently includes 52 percent of Americans. The shareholders should be the ones getting to decide which charity is the best allocation of money rather than the dictatorship or oligarchical structure of a business. Instead of businesses figuring out how to put more effort into the abstract “social good” –  which is in reality defined by the CEO or board – they should realize the limitations of business and decide to work on those endeavors off-the-clock. This view of business and charity, while I don’t arrive at it from Marxism, is not inherently conflicting with Marxism. You may think that business and capitalism are disgusting and oppressive, and likewise that justice and the social good cannot be achieved through its structure. Even if you are neutral or balanced on capitalism, you can see that this would produce a more elitist structure of good and justice. You can also believe as I do, that business and charity should be separated and that we still ought to put more effort into charitable causes.

The structure of a profit-seeking business is undeniably good at executing economic activity. The structure of allowing a CEO or board to decide how an organization should make money and how to efficiently make money, works. However, this power should never extend to deciding what our society should use resources for when it comes to justice and the social good. So instead of donating that 20 percent of profits to charity, maybe just give it out as a bonus to your employees, and allow them to decide what to do with it.

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1 Comment on The Dichotomy of Business and Charity

  1. Ryan Marhoefer // November 8, 2017 at 5:45 am // Reply

    This is an absolutely great article. When is this guy coming out with a book??

    Like

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