CSR and the Social Contract :

CSR and the Social Contract: Locke or Rousseau?

Thomas Hobbes (1588-1679) The fatherofmodern Social Contracttheory

Hobbesian Social Contract (I) State of nature: • No government, no laws, thus no private property • Life is a war of every man against every other man; “nasty, brutish and short” • Essentially the law of the jungle

Hobbesian Social Contract (II) Social contract: • Every individual surrenders its “natural liberty” to a common centralized power, a Sovereign embodying the State • The Sovereign has a monopoly on the use of force, and more generally, on political power • The Sovereign defines and enforces what is legal and illegal. Private property is thus constituted, but subject to limitations imposed by the sovereign, including confiscation

The HobbesianSovereign • The Hobbesian Sovereign personifying the State, made up of individuals • The sword and the staff symbolize secular and religious power

Social Contracts and Economic Systems Mercantilism Classical Liberalism Social Liberalism • (Small government protecting Private Property) (Strong government expressing the General Will)

Contemporary Examples Social Contract Example Type of Capitalism Founding Idea Hobbes China Neo-MercantilisticState Capitalism Sovereign Power Locke USA Classical-Liberal Laissez-faire Capitalism Private Property Rousseau Europe Social-Liberal Welfare Capitalism General Will

Question: Where does CSR fit into this picture?

Assumption CSR is essentially about the social responsibility of business beyond what is stipulated by law, i.e. a voluntary responsibility. (Cf. Carroll 1991/1999, Schwartz & Carroll 2003, Windsor 2006.)

Basic observation The notionof CSR doesnotfitwiththeHobbesian, Mercantilisticmodelbeacuse in thismodeltheSovereignarrogatesallsocialpower and thusallsocialresponsibility. I.e. in theHobbesiansocio-economicmodelthere is noroom for a voluntarilyassumedsocialresponsibilityonbehalfof private citizens and private firms. Why? Becausevoluntaryresponsibilitypresupposesindividualfreedom, and in theHobbesianmodelthere is essentiallyonlyonefreeindividual (in a strongsenseoffreedom), thesovereign. In thissense CSR appears to be an intrinsically liberal, post-Hobbesiannotion. In otherwords, CSR seems to be intrinsicallylinked to thepolitical and economicalthoughtoftheEnlightenment, emphasizingthefreedomoftheindividual, includingtheindividualfirm(corporatecitizen.)

Whichapparentlyleavesuswiththechoice: Locke or Rousseau? That is – doestheconceptof CSR fit best with A Locke-styleSmall-governmentClassically-liberal type ofsocio-economic system, or: A Rousseau-styleStrong-governmentSocially-liberal type ofsocio-economic system?

To me, thiscomesdown to thequestion: Does CSR figure as a complement or a supplement to thesocialresponsibilityenacted by government? • I expressthis in terms ofwhat I callthe ”complementary” and the ”supplementaryhypotheses”…

The Complementary Hypothesis (Locke-style) Social responsibility is a null-sum game; public and private social responsibilities crowd each other out. Thus the more social responsibility is arrogated by centralized, public institutions (elected government, labor unions, etc.) the less social responsibility is voluntarily assumed by individual/corporate citizens, i.e. the private sectordefined by its private property.

The Supplementary Hypothesis (Rousseau-style) • Social responsibility is not a null-sum game; public and private social responsibility does not crowd each other out but rather reinforce each other. • Specifically, the more formalizedresponsibility for public affairs is entrusted to the general populace through centralized institutions expressing the general will (elected government, labor unions etc.) the more informalsocial responsibility is simultaneously encouraged among citizens acting privately(which could be conceived to hold for corporate citizens as well.)

The hypothesescould be thestarting point for: • Furtherconceptualanalysis • Empiricalinvestigation Thankyou for yourattention!

CSR and the Social Contract :