It’s outrageous that in the 21st century, companies in developed nations are still having arguments over whether it’s their responsibility to contribute to the common good. This isn’t so much an issue with individual companies- it’s a problem with government not holding the private sector accountable. Accountability isn’t just about companies paying their fair share of taxes, though. It’s also about them doing their part to make the world a better place.
When somebody receives a new driver’s license, there are a slew of laws they agree to follow. Drivers need to pay the taxes on their vehicles and registration fees, but they also agree to follow the rules of the road and be courteous drivers so that they don’t interfere with the welfare of others. If one person becomes a reckless driver, they lose the privilege to drive because they are infringing on everybody else’s ability to get where they need to be.
Companies should be regulated in the same way as drivers. Yes, they should be paying the taxes they are currently paying, but in addition they shouldn’t be doing anything that impedes people’s ability to live their lives. If a company is turning a financial profit but is causing environmental damage that impacts the folks that live in that area, the company isn’t producing a net benefit to society. When indicators like GDP are used to reflect the success of an economy, other measures like environmental friendliness, percent of people living in poverty, and ability for the next generation to be better off are often unaccounted for. When these measures are disregarded, financially successful companies are unduly credited while those companies that have a greater focus on their holistic impact on society are undercut.
The issue isn’t that companies are inherently evil and self-serving- it’s that the way economic success is measured encourages high profits while disregarding other benefits to society. If a company can make more financial profit at the cost of producing fewer external benefits to the rest of society, under the current system they are incentivised to do this.
The argument though isn’t that everyone should be provided with a high standard of living by the private sector. In fact, having an unnecessarily high basic standard of living hurts a country by creating few incentives for innovation and hard work. Complete economic equality shouldn’t be the end game. The aim should be to limit economic inequality. If someone works harder or builds a larger company, they should benefit from that work. But if someone is unable (or unwilling) to put that kind of work in, they shouldn’t be subjected to destitute poverty. Everyone doesn’t need to succeed, but no one should be failing.
When financial gains are the main (and often, only) economic indicator used to indicate the success of a company, a system is built that discourages companies from considering the larger impacts they have on the world. Policies shouldn’t force companies to go bankrupt, but if a company is unable to provide a net benefit to society while still breaking even, their business model isn’t consistent with the growth and development of society.