Are capitalism and a social conscience mutually exclusive?



August 28, 2019 - 10:23 AM

America’s captains of industry are political orphans. Until relatively recently, both political parties struck a respectful, indeed solicitous, posture toward companies and the chief executives who ran them. The near-collapse of the economy in 2008 shook the legitimacy of both capitalism and its corporate stewards, however, with lasting repercussions — prominent among them a bipartisan swing toward populism.

In 2020, the nominees of both parties could be anti-business in the sense that they may feel little deference to the independent judgment of corporate leaders. That includes President Trump, who has launched a tariff war in defiance of traditional business lobbies and claims the power to “order” U.S. companies to prepare an exit from China. Among Democrats, the top contenders include a socialist and a Harvard law professor emerita who proposes a new federal corporate charter requiring firms to put unions and environmentalists on their boards.

There is, accordingly, just a trace of anxiety in the Business Roundtable’s newly issued “Statement on the Purpose of a Corporation,” an update on the corporate mission statement the influential association of chief executives last put out in 1997. Back then, the Business Roundtable emphasized that “the paramount duty of management and of boards of directors is to the corporation’s stockholders.” Today, “shareholders” don’t rate a mention until about 250 words into a 300-word promise that defines the corporate raison d’être as “an economy that serves all Americans.” It promises diversity and inclusion, environmental sustainability and other laudable objectives usually considered the province of explicitly socially responsible institutions — such as government. Yet the 181 signatories are eager to remind the public of their long-standing sense of responsibility, so as to help restore public trust in capitalism generally and big companies specifically. (Jeff Bezos, who owns The Post, was among those who signed, in his capacity as chief executive of Amazon.)

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