Global Problems: Local
Solutions
Problems are Structural

If economic problems are structural, than
solutions should also be structural.

Corporations externalize costs of pollution
deforestation, overfishing, overconsumption,
energy use, economic stratification, etc.
Problems with Relying on
Liberalizing the Market:
Pressures on Short-termism


1) Short-termism--- pressure on businesses
to increase the value of their company each
quarter.
Such pressure makes it likely that businesses
will: Search for low labor costs, cheapest
materials and innovate in a way that benefits
the rich over everyone else.


Such actions harm:
environment
and
workers
Costly Innovations?
Derivatives – Very confusing; two parties agree to bet on
something that may happen in the future
• Short Selling – “borrowing” assets from a broker,
selling those assets and hoping those assets decrease
in value.
• Credit Default Swaps – buying something like
“insurance” on a company so that if the company goes
belly up, you get paid. However, you do not own any
part of the company
Who’s Responsible?
1) Historical conceptions of CSR

Adam Smith and Morality
 2) NGOs and Activists have forced
companies to care about “Image”
because Adam Smith’s idea of
informal control not longer works.

Solutions
Government Regulations:
In Europe, where centralization of state is more accepted,
this is more realistic. U.S. is more de-centralized and much
resistance.
•United Nations – It has no enforcement power.
•NGOs – Influence public perception
Corporate Social
Responsibility: What is it?

CSR: Including social and environmental costs of doing
business in your bottom line.

Laissez Faire concepts of CSR:
Milton Friedman: I have called it a "fundamentally subversive
doctrine" in a free society, and have said that in such a society,
"there is one and only one social responsibility of business–to
use it resources and engage in activities designed to increase
its profits so long as it stays within the rules of the game, which
is to say, engages in open and free competition without
deception or fraud."

Transparency and
Accountability: An Easy
Solution?
In the U.S., Corporations do not have to report:
Employment numbers outside US
Pollution numbers
Money spent on lobbying to continue harmful global problems
Wage distributions
Percent of workforce contracted
What is done with government tax breaks, subsidies, grants or bailout
monies.
Actual accounting realities to stock holders
Environmental degradation
If we made laws that forced corporations, not to change
policy, but to document various behaviors, consumers
would have more knowledge.
Socially Responsible Consumerism: Taking into
account companies social and environmental
record when purchasing goods

Consumers’ Choice: Is More Really Better?
The Irony of finding the “best deal.”

Is cheaper always better?
• Short and long term problems for consumer?
•
•
•
•
Environmental degradation
Lack of benefits in the marketplace
Health problems
Unemployment
NGOs:
What are Activists Doing?

1) Corporate Campaigns

2) Shareholder Activism

3) Corporate Dialogue

4) Codes of Conducts
 Global Reporting Initiative
 UN Global Compact
 CERES (Coalition for Environmentally Responsible
Economies)
How Companies Respond?

There are no laws, but companies can
voluntarily:

1) Join business associations like
Businesses for Social Responsibility

2) Hire directors of Corporate Responsibility

3) Agree to Codes of Conduct

4) Agree to Triple Line Accounting
GreenWashing?

1) Some activists fear that corporations
GreenWash instead of adopt true change.

Six Sins of Greenwashing

2) Many corporations do not change their
accountability or transparency – same
companies that agree to Codes and Triple
Line lobby government for “Free Trade.”

3) The case of Apple and Foxconn: Fair
Labor Association?
Shopping Responsibly?


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Equal Exchange
Coop America
Local Harvest: CSAs and other food locally
Environment: reduce, recycle, reuse.


Carbon Footprints
(http://www.carbonfootprint.com/)
Turn off your engines, avoid toxic chemicals
that harm water supply, encourage weeds,
Decrease Carbon footprints.
Shopping Responsibly

Get into Groups of 5:
What structural and cultural pressures
make being responsible difficult?
 Now discuss solutions you could see
yourself adopting.
