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1.2   Friedman and Tocqueville walk into a bar. . .

Deciphering the business and society discourse

Yoann Bazin

This is an honest introduction. Thanks to the editors of the present book, I went and properly read Milton Friedman. I was hoping to make a joke out of him—after all, this is a book about humor—by taking a few inflammatory extracts and shredding them to pieces, in the way that some overly casual referencing in our scholarship (and in some student essays) has done over the years. Was I wrong. . . Instead, I discovered a precise and honest thinker—more so than many authors that I admire and agree with. As a result, I had to question myself and dig deeper to find something to make my way back to my comfort zone. For that intellectual journey, I start this chapter with something unusual: absolutely no thanks to the editors for the emotional and intellectual distress this caused me.

Milton Friedman walks into a bar and presents his thesis. . . and then, many opportunistic academic followers, corporate executives and hasty journalists go on to caricature his words, pick and choose some extracts, and serve their own purpose. I have to admit that I was one of them until recently¹ and for that I express some regrets. Not complete ones, because in my caricature I hope I have contributed to limiting the work of these opportunists who use Friedman to advance their private interests against the ones of less powerful citizens. But there are some regrets nonetheless. What I would like to present here therefore is a synthesized, but closer reading of Capitalism and Freedom (Friedman’s famous 1962 book), and explain how I crawled my way out of that particular libertarian ‘black hole.’

Because after Milton Friedman walked into the bar, he saw Alexis de Tocqueville sitting in a dark corner. Indeed, I will aim to show how, helped by a conversation with de Tocqueville, but also Michael Sandel, it is possible to contradict the libertarian argument Friedman advanced. This is not in relation to its internal logic, for Capitalism and Freedom is astonishingly sound on that score. Neither is it in relation to its consequences, since its defenders have become good at finding creative alternative causes to many of them, for instance that the sole origin of the Global Financial Crisis is the Federal Reserve and its non-libertarian approach to markets. The same goes for the rise of social and economic inequalities in Western countries since the 1980s or the invasion of corporate and managerial rationales in our lives. I will do so by taking a wider point of view of democratic societies offered by Tocqueville’s Of Democracy in America, which perhaps surprisingly, even Milton Friedman partly agrees with.

In doing so, I will work to decipher the ‘business & society’ academic discourse in management and organization studies, and show that it encompasses two streams, one of which I will defend as being in fact about business in society.

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Milton Friedman walks into a bar. . .

Free capitalism or tyranny! A gentle libertarian warning

In Friedman’s perspective, capitalism is fundamentally the economic system that puts freedom at its very core. In his words, “exchange can therefore bring about co-ordination without coercion. A working model of a society organized through voluntary exchange is a free private enterprise exchange economy what we have been calling competitive capitalism.”² Any kind of regulation, for instance, will be considered under this measuring gaze: the extent to which it limits freedom. Given that freedom is the fundamental value—the one and only, as we will see later—any such limitation is problematic, no matter how popular it can be. As he notes,

the citizen of the United States who is compelled by law to devote something like 10 per cent of his income to the purchase of a particular kind of retirement contract, administered by the government, is being deprived of a corresponding part of his personal freedom. (. . .) True, the number of citizens who regard compulsory old age insurance as a deprivation of freedom may be few, but the believer in freedom has never counted noses (. . .) A citizen of the United States who under the laws of various states is not free to follow the occupation of his own choosing unless he can get a license for it, is likewise being deprived of an essential part of his freedom.³

Pushed to the radical status of an ideology, liberty and freedom thus become libertarianism.

Importantly, as a true, that is holistic, libertarian, Milton Friedman does not only preach freedom for corporations—as many opportunist readers have tried, and still try to pretend. Instead, this is extended to all forms of markets, and even the rest of society. In this way, he is much more intellectually coherent than many of his self-appointed heirs. In Friedman’s framework, liberty and freedom are untouchable values that infuse all structures, from economics to politics, and even education. This is where his economic doctrine becomes highly political.

For Friedman, this is a consequentialist concern. In particular, as soon as we contemplate limiting freedom in any manner, we are on a slippery slope leading quickly to tyranny:

Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like political freedom: the typical state of mankind is tyranny, servitude, and misery.⁴

Resultantly, his perspective tends to make him paint the world in black and white, with absolute freedom on one side and liberticidal rigid constraints on the other. As he argued,

fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place.⁵

Absolute freedom or dreadful tyranny. Not quite a subtle depiction of the world, is it?

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In this somehow ontological take on freedom, the onus is instead on individuals, who must be left alone “to wrestle with” the ethical dilemmas they face. A libertarian like Friedman therefore cannot be simply either a conservative or a social liberal, as any pre-determination or limitation of individuals’ agency by any kind of system would be a contradiction. Indeed,

in a society freedom has nothing to say about what an individual does with his freedom; it is not an all-embracing ethic (. . .) The ‘really’ important ethical problems are those that face an individual in a free society—what he should do with his freedom.⁶

This take on ethical dilemmas is quite appealing and seems self-evident. Importantly however, it also leads to a view of markets and society as deprived of any politics, or even anthropology.

An a-political view of the social

To Friedman, free markets are the ideal place for the freedom of individuals to be expressed, through the exchange of goods and services. In these markets, no pressure or distortion should occur. But how idealized and utopic does the following description sound?

Indeed, a major source of objection to a free economy is precisely that it does this task so well. It gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.⁷

In this ideal, there are apparently no influential power plays by international corporations and no manipulative marketing campaigns, for instance.

When looked at closely, the world viewed by Milton thus entirely lacks any kind of anthropology. Although it is never phrased this way, it is far from being hidden. As he wrote in the first paragraph of the introduction, “to the free man, the country is the collection of individuals who compose it, not something over and above them.”⁸ He adds a little later that “in its simplest form, such a society consists of a number of independent households, a collection of Robinson Crusoes, as it were.”⁹ In Friedman’s mind, we are all castaways—who happen to be living on the same island.

Consequently, society appears as no more than a play or a set of rules followed by individuals. There is no community beyond—in a sense of something that would be part of these individuals. In his telling,

the day-to-day activities are like the actions of the participants in a game when they are playing it; the framework, like the rules of the game they play. And just as a good game requires acceptance by the players both of the rules and of the umpire to interpret and enforce them, so a good society requires that its members agree on the general conditions that will govern relations among them, on some means of arbitrating different interpretations of these conditions, and on some device for enforcing compliance with the generally accepted rules.¹⁰

In his libertarian view, therefore, individuals in society have no anthropological aspects, no cultural or common parts of themselves they would share with other members of the tribe. Their realities merely contain external constraints, which they freely choose to respect, or not.

p.17

This last aspect leads Friedman to what I found to be the weak point of his argument: justice. In particular,

the liberal conceives of men as imperfect beings. He regards the problem of social organization to be as much a negative problem of preventing “bad” people from doing harm as of enabling “good” people to do good; and, of course, “bad” and “good” people may be the same people, depending on who is judging them.¹¹

Indeed, how can you conceive a non-relativist system of justice without any core value other than freedom? This is especially since any judgment or limitation of what individuals do with their freedom is considered close to tyrannical. In addition, following this, how can you imagine a system of social responsibility and accountability for corporations in which such freedom is protected, without the prevention he himself refers to?

The libertarian influence on the relation between business and society

It is only after considering in some detail the thesis offered by Friedman that we can, in all intellectual honesty, assess his frequently quoted maxim:

Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. This is a fundamentally subversive doctrine.¹²

The infamous position, based on which we can paint Milton as an awful defender of corporations.

The very idea of a corporate social responsibility as a principle or a value predates Friedman’s 1962 classic. Indeed, critical examinations of the links between businesses and society can be traced back to the early 1920s. It can be argued that it led to an academic field in itself with the birth of the academic journal Business & Society in 1960. In his study of this field, Frederick¹³ found that scholarly works on the link between businesses and societies shifted slowly, moving away from the idea of responsibility toward the notion of responsiveness. He thus offers the underpinnings to understand CSR as an ability to account for, to respond and to react to the organizations’ environment and stakeholders. His non-normative take shows that a ‘business & society’ view is not necessarily anti-libertarian. Far from it, since many stakeholder analyses are strategic—if not opportunistic—rather than being about ethics or politics. Indeed, the famous “stakeholder theory” was initially offered in a strategic management perspective,¹⁴ therefore casting an ambiguous shadow over what the relation between business and society should be when it comes to corporations’ accountability and responsibility. As Wicks and colleagues noted,

one of the assumptions embedded in this world view is that the “self” is fundamentally isolatable from other selves and from its larger context (. . .) The parallel in business is that the corporation is best seen as an autonomous agent, separate from its suppliers, consumers, external environment, etc. (. . .) These definitions all share the implicit premise that the basic identity of the firms is defined independent of, and separate from, its stakeholders.¹⁵

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In his seminal article, Carroll in turn offered a clear statement defining what he thinks CSR is: “the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.”¹⁶ It is worth noting that the categories mentioned (economic, legal, ethical and discretionary) are neither mutually exclusive, nor additive, but rather an evolving continuum of responsibilities organizations have to face. Here again, the approach seems to be strategic, in the sense of facing and managing expectations, and does not necessarily consider any built-in normative duties for corporations and corporate officers.

Such fluidity has consequences. For Wood, for instance, the expression “business and society” carries an ambiguity about the hierarchy between the two words.¹⁷ As a result, it tends to place first and foremost the corporation, its own constraints and its cherished objectives. Here he identifies a critical point: as a result, there could very well be some kind of “libertarian CSR.” This echoes Buchholz and Rosenthal (1997) according to whom such an assumption has actually “infused” and “plagued” the academic field of business & society. As they outlined,

this position is called atomic individualism which is based on the view that the individual is the basic building block of a society or a community, and that the society is no more than the sum of the individuals of which it is comprised.¹⁸

As such, it could be argued that Friedman’s Robinson Crusoes view of society is somehow constitutive of the “business & society” perspective, since the latter’s very title implies these are separate entities, which can be dissociated and eventually put on the same level.

In the same vein, Matten and Moon¹⁹ explain the different conceptions of CSR in the US, where they describe it as “explicit,” and in Europe, where it would be “implicit.”

If Friedman were to tolerate one column, given his principles as recounted, it would clearly be the explicit one, as it leaves the most space for freedom of executives and stockholders to run their companies in the way they intend. If they were to incorporate some elements of responsibility in their decisions, it would only be “voluntary” and strategic, and result from their own “motivated” reasons. Put differently, the idea of implicit CSR would rely far too much on constraints imposed by society at large, or the community, not to impinge on freedom as a central value.

p.19

However, Friedman did not stop at the infamous quote I mentioned earlier. He went on to finish the paragraph. I shall quote it at length, as it is far too rarely presented as such:

If businessmen do have a social responsibility other than making maximum profits for stockholders, how are they to know what it is? Can self-selected private individuals decide what the social interest is? Can they decide how great a burden they are justified in placing on themselves or their stockholders to serve that social interest? Is it tolerable that these public functions of taxation, expenditure, and control be exercised by the people who happen at the moment to be in charge of particular enterprises, chosen for those posts by strictly private groups? If businessmen are civil servants rather than the employees of their stockholders then in a democracy they will, sooner or later, be chosen by the public techniques of election and appointment.²⁰

Here Friedman says something that is too rarely mentioned, namely, if we ask corporations to be responsible, aren’t we putting too much non-democratic power in their hands? Aren’t we putting them in charge of deciding what justice should be?

This issue led me to pin-point what I think is one of the biggest blind spots of Friedman’s framework: justice vis-à-vis freedom. Taken as it is, it has an intellectual flawlessness: it is all-encompassing. If you accept the premise however that freedom is the one and only important value and that any other should be secondary, if not rejected, then Friedman has trapped you in the corner of our metaphorical bar, making it almost impossible to escape. However, if you notice that he struggles with the notion of justice in his view of the world, then you might have a Tocquevillian way out.

And sees Tocqueville in a dark corner. . .

Equality in Friedman’s blind spot

Going through Capitalism and Freedom, a quantophrenic reader would count the word ‘freedom’ 205 times. In comparison, outside of the tenth chapter on the distribution of income, ‘equality’ only appears 18 times, and ‘liberty’—freedom’s political synonym—even less (8 times). Moreover, in the aforementioned chapter, ‘equality’ is half the time written under its form ‘inequality.’ Finally, all such references are about economic income, not justice in society. In summary, in Friedman’s view, equality in the political sense does not exist, or has very little space.

This is why, in a libertarian perspective, government has no role to play in insuring equality amongst citizens, as it would impair their fundamental freedom. That being said, Friedman recognizes that it can and should serve one practical purpose: ensuring the respect of the rules of the game. In his telling,

we cannot rely on custom or on this consensus alone to interpret and to enforce the rules; we need an umpire. These then are the basic roles of government in a free society: to provide a means whereby we can modify the rules, to mediate differences among us on the meaning of the rules, and to enforce compliance with the rules on the part of those few who would otherwise not play the game.²¹

In such a view, government is only secondary to markets and to corporations, but also to individuals freely exchanging; a mere practical necessity. As he puts it, “the role of government just considered is to do something that the market cannot do for itself, namely, to determine, arbitrate, and enforce the rules of the game.”²² Importantly, these rules should be limited to the absolute minimum, i.e. to ensuring the sustainability of the game itself, as capitalism requires the protection of capital, a legal framework for contracts and some kind of labor law. A “business & society” perspective in this telling could thereby perfectly prioritize markets and corporations over the social contexts they are embedded in, hence the ambiguity noticed by Wood (1991).

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It is unsurprising then to find the equality ensured by government being mostly depicted in a pejorative light. As Friedman puts it, “but in the process (of regulating through standards), government would replace progress by stagnation, it would substitute uniform mediocrity for the variety essential for that experimentation which can bring tomorrow’s laggards above today’s mean.”²³ Friedman thus sees equality as evidence of government intervention, which is almost always a bad thing since it is synonymous with some limitation of freedom. Here, freedom and equality are thought to be in strict, mutually exclusive opposition, almost never capable of coexisting:

the catchwords became welfare and equality rather than freedom. The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth-century liberal regards welfare and equality as either prerequisites of or alternatives to freedom.²⁴

Consequently, and this is key to understanding how one can escape Milton’s libertarian vortex, democratic societies should be based on freedom, and freedom alone.

Published in 1962, Capitalism and Freedom carries the stigma of an opposition between capitalist societies—considered as free and democratic—and socialist ones—that can only be anything but. As Friedman puts it, “a society which is socialist cannot also be democratic, in the sense of guaranteeing individual freedom.”²⁵ However, and this is the beauty of Friedman’s intellectual honesty, he recognizes that there can be economies “that are fundamentally capitalist and political arrangements that are not free.”²⁶ Following the same line of honesty, he goes as far as respecting the right for someone to be a communist (something that was not exactly in fashion in the 1960s): “His freedom includes his freedom to promote communism.”²⁷ You can disagree with the man, but you have to acknowledge his coherence.

Analyzing the democratic rationale, Friedman asserts that markets in capitalist democratic societies could be seen as a legitimate system for the representation of citizens. He argues that “from this standpoint, the role of the market, as already noted, is that it permits unanimity without conformity; that it is a system of effectively proportional representation.”²⁸ To him, it is even less flawed than the idea of voting: “fundamental differences in basic values can seldom if ever be resolved at the ballot box; ultimately they can only be decided, though not resolved, by conflict.”²⁹ This makes for brutal coherence, doesn’t it?

Having equality in his blind spot however, Friedman sees citizens in a democracy only as being free, and nothing else. He therefore struggles in his second chapter with the notion of justice and the majority principle—as do many promoters of corporations’ rights and values in democratic societies. Although his argument is more than sound from a logical and purely economic point of view, it remains unbalanced and awkward as a political system. To me, it therefore presents no issue to see it as an intellectual contribution relying on a libertarian ontology, but I shudder when some use it as an unproblematic ideology, in order to promote politics in its mould.

p.21

Of democracy in markets?

According to Michael Sandel, “the case for free markets typically rests on two claims”: “letting people engage in voluntary exchanges respects their freedom” and “free markets promote welfare.”³⁰ But in arguing against this simplistic view, he reminds us that choices and decisions made by actors involved in markets are far from being always ‘free.’ Through a few concrete examples, especially the case of volunteering in the army, he shows how class discrimination and economic disadvantages can constrain people to some decisions despite the appearance of a free exchange. Through this argument, Sandel brings back the question of equality as an absolute requirement in building a system that is not only ‘free,’ but also ‘fair.’ As he phrases it, it is all about “how much equality is needed to ensure that market choices are free rather than coerced?”³¹

This simple idea is key to countering the libertarian, freedom-obsessed perspective, by stressing that for people to be free, a certain level of equality needs to be achieved. Here, Sandel is not the first, a fact he fully recognizes, as he knows very well the work of Jean-Jacques Rousseau. The latter argued in 1762 in the second book of his Social Contract that

if we enquire wherein lies precisely the greatest good of all, which ought to be the goal of every system of law, we shall find that it comes down to two main objects, freedom and equality: freedom because any individual dependence means that much strength withdrawn from the body of the state, and equality because freedom cannot survive without it.³²

Crucially, this conceptual articulation between freedom and equality underlies the Tocquevillian perspective on democracy.

In his analysis of the American society of the early nineteenth century, Alexis de Tocqueville grounds democracy in two core values: freedom and equality. In doing so, he does not oppose them, but shows their necessary interactions and interdependence in democratic society. As he noted,

it is possible to imagine an extreme point at which freedom and equality would meet and blend. Let us suppose that all the people take a part in the government, and that each one of them has an equal right to take part in it. As no one is different from his fellows, none can exercise a tyrannical power, men will be perfectly free because they are all entirely equal; and they will be perfectly equal because they are entirely free.³³

But before this extreme point, an articulation has to be achieved in order to build a fair and democratic society.

Tocqueville considers equality as the very fundamental norm of all relationships in a democracy. If hierarchies and differences can obviously exist—between employers and employees for example—they shall not be constitutive of the individuals’ identities as citizens. Consequently, social positions should never interfere in individuals’ exercise of political sovereignty. According to Tocqueville, this aim for equality in rights will be anchored in an “imaginary” equality in the minds. This is an equality that cannot ever be perfectly reached, but that instigates a core process: the equalization of conditions. In his words,

in democracies servants are not only equal amongst themselves, but it may be said that they are in some sort the equals of their masters (. . .) Why then has the former a right to command, and what compels the latter to obey?—the free and temporary consent of both their wills. Neither of them is by nature inferior to the other; they only become so for a time by covenant. Within the terms of this covenant, the one is a servant, the other a master; beyond it they are two citizens of the commonwealth—two men.³⁴

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Put differently, although differences will arise from the other core value of democracy—freedom—fairness will be insured by a duty of individuals to respect this idea that they are all equals, and therefore should be treated equally.

This echoes Sandel’s take on justice, which he strongly connects to duty, and the risk of its commodification leading to its demise. Referring back to Jean-Jacques Rousseau’s Social Contract, he shows how a society of citizens solely involved in free exchanges and without any sense of a higher purpose than their individual interest leads to the disappearance of democratic justice. As Rousseau suggested, “as soon as public service ceases to be the chief concern of the citizens and they come to prefer to serve the state with their purse rather than their person, the state is already close to ruin.”³⁵ Importantly, Sandel sees in the libertarian obsession with free exchange between individuals an inversion of, if not a risk for, justice. He argues that “we are inclined to view the state, with its binding laws and regulations, as the realm of force; and to see the market, with its voluntary exchanges, as the realm of freedom.”³⁶ Notably, his phrasing could not be closer to Friedman’s, which we saw in the first section.

In the Tocquevillian perspective, freedom is the other core value in democratic societies, but only as another pillar, not in itself. Even further, Tocqueville sees equality and freedom as the remedies for one another: “but I contend that in order to combat the evils which equality may produce, there is only one effectual remedy—namely, political freedom.”³⁷ Freedom in itself can therefore not be the sole source for justice in a democracy. An environment that would over-emphasize its importance would quickly disrupt the status of equality amongst citizens, and lead to a slow demise of democracy itself as a political system.

The idea therefore is not to reject freedom, but to refuse Friedman’s assertion that anything short of absolute freedom is a move toward tyranny. Jean-Jacques Rousseau cherishes it as one of the highest values mankind should aim for:

to renounce freedom is to renounce one’s humanity, one’s right as a man and equally one’s duty. There is no possible quid pro quo for one who renounces everything; indeed such renunciation is contrary to man’s very nature; for if you take away all freedom of the will, you strip a man’s actions of all moral significance.³⁸

However, being less radical than libertarians—and probably less terrified by communism—he sees in the State (the institution encompassing and insuring the existence of a social contract) a way to achieve a balance. In his phrasing,

power shall stop short of violence and never be exercised except by virtue of authority and law, and, where wealth is concerned, that no citizen shall be rich enough to buy another (. . .) Such equality, we shall be told, is a chimera of theory and could not exist in reality. But if abuse is inevitable, ought we not then at least to control it? Precisely because the force of circumstance tends always to destroy equality, the force of legislation ought always to tend to preserve it.³⁹

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But what place remains for the State in a “business & society” debate mostly concerned with entities such as ‘the social,’ ‘the community,’ or even ‘the stakeholders’? What kind of “business & society” does this recognition demand? And what lessons does this hold for our scholarship?

Concluding on a drift: from business and society to business in society

According to Siltaoja and Onkila, the ideas of business and society and business in society refer to different understandings of what corporations consider to be their social responsibility.⁴⁰ For the defenders of the “in” articulation, corporations ground their legitimacy and their raison d’être in the mandate delegated by society to operate on segments of economic activities that give them the right to operate and to create value.⁴¹ In this perspective,

businesses and other organizations have been understood to interact with society because they are part of it and are in partnership with other focal actors—emphasizing the view we call business in society (. . .) The distinctive elements of this kind of ‘European CSR’ are the inclusion of regulated industrial relations, labour law and corporate governance.⁴²

Although respecting the rights of individuals vis-à-vis free enterprise, this perspective clearly bounds their freedom within a democratic framework that ensures equality is respected—or at least that inequalities are limited. Following this reasoning, for instance, since taxes and other fiscal apparatus are one of the ways nation states ensure and finance social justice, tax evasions practices would be considered anti-democratic, and tax opposition highly questionable.

Instead of understanding corporations as being ontologically and morally free to act however they want—or not—, and thus to be accountable—or not—for what they do, the “business in society” perspective thus puts society first, as source and frame of economic activity that also needs to respect and contribute to equality. In a somehow Tocquevillian perspective, Breton and Pesqueux, for example, strongly state that they “start by refusing to consider shareholders as the alpha and omega of the corporation while placing society, which is supposed to have the first and the last role in our western democracies, at the origins of every entrepreneurial activity.”⁴³ The wider point is that understood as social institutions, corporations cannot only claim their freedom; they have to also acknowledge the environments in which they are embedded and the State that structures them.

A “business in society” perspective is therefore a counter-point to the current managerialist trend, and its major development that is New Public Management, according to which every institution in society could, and should, apply managerial models and tools.⁴⁴ This trend is a direct heir to Friedman’s radical libertarianism, only it replaced his intellectual honesty and coherence with an opportunistic strategy to serve the interest of a few. Scholars working on the “in” perspective tend to question the legitimacy of corporations, to interrogate their responsibility and accountability, and call for a fine-grained understanding and integration of their multiple impacts. In such a vein, Buchholz and Rosenthal, for instance, offer to leave what they call “atomic individualism” in the past and instead turn to American pragmatism, since in this perspective, “the relationship between business and society is inherently relational, for no business organization can exist in isolation from society or from its environment, and society is what it is in relation to its constituting institutions.”⁴⁵

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One could thus place the business in society perspective within the opposition, offered by Breton and Pesqueux,⁴⁶ between the “live in” inspired by the Enlightenment (of which Alexis de Tocqueville is an heir), and the libertarian “live with” (which Milton Friedman would consider closer to his program):

The “business in society” approach is fully grounded in the perspective opened by Shocker and Setii, according to whom

any social institution—and Business is no exception—operates in society via a social contract, expressed or implied, whereby its survival and growth are based on: (1) the delivery of some socially desirable ends to society in general, and (2) the distribution of economic, social or political benefits to groups from which it derives its power.⁴⁷

This forces us to critically engage with the very notion of responsibility. In particular, it often leads to what Solomon considers to be a trap,

beginning with the assumption of the corporation as an autonomous, independent entity, which then needs to consider its obligations to the surrounding community. But corporations, like individuals, are part and parcel to the communities that created them, and the responsibilities that they bear are not products of argument or implicit contracts but intrinsic to their existence as social entities.⁴⁸

Surprisingly enough, this position is not far from Friedman’s, when one extends his quote to the full paragraph as we did earlier:

Is it tolerable that these public functions of taxation, expenditure, and control be exercised by the people who happen at the moment to be in charge of particular enterprises, chosen for those posts by strictly private groups? If businessmen are civil servants rather than the employees of their stockholders then in a democracy they will, sooner or later, be chosen by the public techniques of election and appointment.⁴⁹

p.25

However, as an heir of Tocqueville and Rousseau rather than Friedman, I advocate for a shift from “business & society” to “business in society” thus conceiving corporations as social institutions fully embedded in societies. Although refusing the libertarian assumption that these corporations would be above or outside societies—even if they are multinational—it acknowledges their necessary autonomy and their multiple contributions. Its aim is therefore to analyze their place and role as organizations within society today in a relational manner, not as autonomous entities. Consequently, the expansion of the managerial rationality—the infamous managerialism and its New Public Management—ought to be one of its main points of focus. In short, business in society offers a perspective understood in the wider sense (both conceptually and internationally) of critical analysis (understood as a position of distance and discernment) of the links and interactions between societies (their history, their culture, their laws and their State) and the businesses (in their diversity of form and aim) that operate within them. Moreover, the role of the State needs to be conceptualized, not as something that should only be reformed through economics and management, but as a key social institution—rather than an annoying limiter of freedom. For a more refined approach, one that takes both Friedman and Tocqueville seriously, such investigations are both analytically and politically necessary.

References

  1    Bazin, Y. (2016). Editorial. Society and Business Review, 11(2), pp. 106–109.

  2    Friedman, M. (1962/2002). Capitalism and Freedom. University of Chicago Press, p. 13.

  3    Ibid., pp. 8–9.

  4    Ibid., p. 9.

  5    Ibid., p. 10.

  6    Ibid., p. 12.

  7    Ibid., p. 15.

  8    Ibid., pp. 1–2.

  9    Ibid., p. 13.

10    Ibid., p. 25.

11    Ibid., p. 12.

12    Ibid., p. 133.

13    Frederick, W. C. (1994). From CSR1 to CSR2: The maturing of business-and-society thought. Business & Society, 33(2), 150–164.

14    Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach, Pitman; Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 497–505.

15    Wicks, A. C., Gilbert, D. R., & Freeman, R. E. (1994). A feminist reinterpretation of the stakeholder concept. Business Ethics Quarterly, 4(04), 479.

16    Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 500.

17    Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691–718.

18    Buchholz, R. A., & Rosenthal, S. B. (1997). Business and society: What’s in a name? The International Journal of Organizational Analysis, 5(2), 181.

19    Matten, D., & Moon, J. (2008). “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33(2), 404–424.

20    Friedman (1962/2002), p. 133.

21    Ibid., p. 25.

22    Ibid., p. 27.

p.26

23    Ibid., p. 4.

24    Ibid., p. 5.

25    Ibid., p. 8.

26    Ibid., p. 10.

27    Ibid., p. 20.

28    Ibid., p. 23.

29    Ibid., p. 24.

30    Sandel, M. J. (2009). Justice: What’s the Right Thing to Do? Penguin, p. 75.

31    Ibid., p. 84.

32    Rousseau, J.-J. (1762/2004). The Social Contract. Penguin revised edition, p. 58.

33    Tocqueville, A. (1835/1998). Democracy in America. Wordsworth, p. 201.

34    Ibid., p. 266.

35    Rousseau (1762/2004), p. 111.

36    Sandel (2009), p. 87.

37    Tocqueville (1835/1998), p. 186.

38    Rousseau (1762/2004), p. 8.

39    Rousseau (1762/2004), pp. 58–59.

40    Siltaoja, M. E., & Onkila, T. J. (2013). Business in society or business and society: The construction of business–society relations in responsibility reports from a critical discursive perspective. Business Ethics: A European Review, 22(4), 357–373.

41    Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691–718.

42    Siltaoja & Onkila (2013), pp. 359–360.

43    Breton, G., & Pesqueux, Y. (2006). Business in society or an integrated vision of governance. Society and Business Review, 1(1), 7–27, 8.

44    Kilkauer, T. (2013). Managerialism: A Critique of an Ideology. Palgrave Macmillan.

45    Buchholz and Rosenthal (1997), pp. 193–194.

46    Breton and Pesqueux (2006), p. 16.

47    Shocker, A. D., & Setii, S. O. (1974). An approach to incorporating social preferences in developing corporate action strategies, in Sethi, S. P. (Ed.), The Unstable Ground: Corporate Social Policy in a Dynamic Society. Melville, pp. 67–80, p. 67.

48    Solomon, R. (2008). Business ethics, corporate virtues and corporate citizenship in Scherer, A. G., & Palazzo, G. (Eds.), Handbook of Research on Global Corporate Citizenship. Edward Elgar Publishing, p. 126.

49    Friedman (1962/2002), p. 133.