Few politicians, pundits, and educators seem to be able to defend capitalism effectively without apologizing for the prosperity is creates. I like to point out pithy, concise, and cogent articles that do so whenever I see them. Here’s a great one in a recent issue of Forbes.
www.forbes.com/sites/objectivist/2013/03/12/give-back-is-one-of-the-worlds-most-impoverishing-commands/
Authors Yaron Brook and Don Watkins attack the prevailing notion that successful firms should “give back” to society. This little quip has become so common in mainstream business and academic parlance that its illegitimacy is rarely noticed. Even CEOs use the phrase, lest they be charged with greed and insensitivity to society.
A person or organization can only “give back” to another if that person was given something in the first place. So what does society give companies that obligates them to give back at some future time? Indeed, customers purchase their products but they only do so voluntarily–when the purchase makes them better off. Employees provide labor, but only voluntarily and when they agree to the working conditions and compensation. In fact, because a firm must trade value for everything it receives, so it only acquires resources when it makes other parties better off in the process. Firms can give whatever their shareholders (through through their boards and managers) deem appropriate, but they are not giving anything back.
This is an important distinction because so many in our society have been conditioned to believe that business firms–by definition–are privileged and are constantly taking from society. As such, governments and the general public have a right to a share of the profits when they are succeed. This view rejects the fundamental notion of liberty. Individuals and firms are free to make investments, purchases, and sell their labor as they wish; society has no right to a piece of the pie when a firm succeeds any more than a firm has a right to a public bailout if it fails.
I challenge you to have this conversation the next time someone applauds a company for giving back.
I never thought about it like this
A company that has to give back must have taken something.
We, the customers, support the business and help it grow and succeed. Without customers, the business will fail. Thus, companies give us back for our constant support.
A few weeks ago I attended a conference of a regional educational organization in the South. I asked the founder of the organization why did he establish the organization in Jackson, Mississippi, and not in a big city like Atlanta? He, who was born and raised in Jackson area, replied:” I grew up in the 60’s. I give back”. We need more of that spirit of the 60’s.
But what about companies that get government bailouts? Shouldn’t they give back?