In the past, anti-corporate pressure groups and trade unions have highlighted the unethical way in which many multinational companies have ‘externalized’ responsibilities and costs – keeping their profits but passing many of the costs of the way in which they do business to innocent third parties, writes Philip Whiteley. Other agencies have to clear up the pollution they emit, or deal with the social problems caused by low pay.
But are centre-left governments the new corporate villains? Across the western world, in a bid to maintain free social and health care for their populations (an understandable objective), and maintain a short-term appearance of economic growth (far more questionable) they have been borrowing, and borrowing big. The harsh reality, however, is an externalization of costs to future generations to pay for benefits today. The people most negatively affected by these decisions have not been able to vote for them, because they are not old enough yet.
Meanwhile, we discover that externalizing costs by corporations may not even make business sense, as this study shows. Corporations are smartening up their act, recognizing that responsible stewardship over the longer term encourages disciplines that help efficient operations and good customer service, helping profits.
It ought to trouble the left that it now has a worse record on ethical stewardship than the likes of Walmart, Coca-Cola and even some of the oil giants. But I don’t expect recognition of this any time soon