Week 5 Globalisation and CSR

It is impossible that such governments as have hitherto existed in the world, could have commenced by any other means than a total violation of every principle sacred and moral Paine (1792) - Rights of Man

We know that the IMF and World Bank programs have greatly exacerbated poverty and undermined the basic human and democratic rights on people in Southern countries to determine our own destiny. Jubilee South Africa, 1999

Ugandan coffee price per kilo Grower = $0.14 Exporter = $0.31 Transport = $1.19 Processor = $15.96 Retailer = $8.80 (source = Oxfam, 2002)

Features of globalisation Market mediation Price competition Free movement of capital Free movement of labour? Transaction cost minimisation

Classical Liberal Theory freedom of the individual to pursue own ends assumptions: reason rationality society is merely the aggregation of self interest organisations are mechanisms for pursuing self interest markets as mediation

The conflicts of liberalism collective needs v individual freedom society to protect private rights Locke government as regulation De Tocquville metanarrative as explanation

Utilitarianism the greatest good of the greatest number Bentham, Mill actions judged by their consequences economics as explanation accounting as tool of analysis power differentials?

The three leading causes of death in Zambia today include AIDS, malnutrition and malaria. Each of these is related to the slavish pursuit by the Zambian Government of the IMF imposed structural adjustment programs. Africa Faith and Justice Network

The World Bank ‘…organs of international aid and so- called Third World development were invested with socialist error’ Ronald Reagan, 1981 Bank usually acts in support of American political and strategic interests 1982 USA investigation

The Third World debt to the North is at once fraudulent, odious, illegal, immoral, illegitimate, obscene and genocidal. Declaration of the Dakar 2000 Pan-African Meeting

Enacting globalisation Cost saving = downsizing = efficiency Effectiveness negated Public = bad; private = good Trickle down theory

We denounce and reject the globalization of the Neo-liberal model as exclusive, undemocratic, exploitative, pillaging and genocidal, imposed on the world…. Declaration of the South-North Exchange, Chiapas, Mexico, October 2000

The results Wealth transfer – from the poor to the rich Structural adjustment = Impoverishment Worsening public services Lower life expectancy Cash cropping instead of sustainability Proliferation of arms

Globalised CSR Cultural differences ignored Tick-box approach Window dressing as obfuscation

CSR does not exist Managerial primacy Returns to shareholders Short termism Conflicting claims of stakeholders

People of the same trade seldom meet together, eve for merriment or diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which could either be executed, or would be consistent with liberty and justice. Adam Smith

The myth of the market Ideology of the free market Utilitarianism Liberalisation = utopia Trickle down effect Benefit to all? Power imbalances

“After the genocide in Rwanda the situation was awful. There was also no infrastructure to get to the people in need. And so there were United Nations convoys that just couldn’t get through. This delegation literally just sat there on the road for hours going nowhere. By the time they finally reached their destination, they discovered that Coke had already been there for two weeks distributing what they needed. What a fascinating thing – Coke got there before the UN. It shows you just how powerful the global market is and this brand in particular… I suppose if Microsoft needs to be there, they’ll be there too.” NGO administrator

The Free Market Dominant ideology of the modern western world If unregulated: Maximises economic wealth Optimises its distribution Assumption of perfect competition ignored Power differentials ignored

Problems with the free market Assumption of perfect competition Information asymmetry Power asymmetry Number of buyers / sellers Role of the state Regulation Redistribution

Regulation Mediates for market inefficiencies Alleviates power imbalances Allows for wealth / income / welfare redistribution Imposes sanctions

The role of government Minimal = safety (internal & external) Regulatory Redistributive Collective The End of History?

Benefits of CSR Image Increased turnover Reduced future costs Reduced future liabilities Lower staff turnover Easier recruitment

Promoting CSR Regulation? Ethics education? The role of citizenship? Enlightened self-interest