Last week's Economist observed:
Companies at every opportunity now pay elaborate obeisance to the principles of corporate social responsibility. They have CSR officers, CSR consultants, CSR departments, and CSR initiatives coming out of their ears.
Not surprisingly, the Economist isn’t convinced that that’s a good thing; and neither am I. My most direct analysis of the problem can be found in my article In Defense of the Shareholder Wealth Maximization Norm, which argues that the principle of shareholder wealth maximization is both a valid positive account of corporate law and also a legitimate normative proposition. Why? Well, it's a long article that makes a lot of arguments, but the Economist's conclusion is not a bad summary:
All things considered, there is much to be said for leaving social and economic policy to governments. They, at least, are accountable to voters. Managers lack the time for such endeavours, or should do. Lately they have found it a struggle even to discharge their obligations to shareholders, the people who are paying their wages. If they want to make the world a better place—a commendable aim, to be sure—let them concentrate for the time being on that.
I've got to give a talk on this subject to a conference on Friday, so I'll have more later.
