CSR and the Social Contract:

Locke or Rousseau?

Thomas Hobbes (1588-1679)The father of modern Social Contract theory

Hobbesian Social Contract (I)

State of nature:

• No government, no laws, thus no private property

• Life is a war of every man against every other man; “nasty, brutish and short”

• Essentially the law of the jungle

Hobbesian Social Contract (II)

Social contract:

• Every individual surrenders its “natural liberty” to a common centralized power, a Sovereign embodying the State

• The Sovereign has a monopoly on the use of force, and more generally, on political power

• The Sovereign defines and enforces what is legal and illegal. Private property is thus constituted, but subject to limitations imposed by the sovereign, including confiscation

The Hobbesian Sovereign

• The Hobbesian Sovereign personifying the State, made up of individuals

• The sword and the staff symbolize secular and religious power

Social Contracts and Economic Systems

Mercantilism

Classical Liberalism Social Liberalism

(Small government protecting Private Property) (Strong government expressing the General Will)

Contemporary Examples

Social Contract Example Type of Capitalism Founding Idea

Hobbes China Neo-Mercantilistic State Capitalism Sovereign Power

Locke USA Classical-Liberal Laissez-faire Capitalism Private Property

Rousseau Europe Social-Liberal Welfare Capitalism General Will

Question:

Where does CSR fit into this picture?

Assumption

CSR is essentially about the social responsibility of business beyond what is stipulated by law, i.e. a voluntary responsibility. (Cf. Carroll 1991/1999, Schwartz & Carroll 2003, Windsor 2006.)

Basic observation

• The notion of CSR does not fit with the Hobbesian, Mercantilistic model beacuse in this model the

Sovereign arrogates all social power and thus all social responsibility.

• I.e. in the Hobbesian socio-economic model there is no room for a voluntarily assumed social

responsibility on behalf of private citizens and private firms. Why? Because voluntary responsibility

presupposes individual freedom, and in the Hobbesian model there is essentially only one free individual

(in a strong sense of freedom), the sovereign.

• In this sense CSR appears to be an intrinsically liberal, post-Hobbesian notion. In other words, CSR seems

to be intrinsically linked to the political and economical thought of the Enlightenment, emphasizing the

freedom of the individual, including the individual firm (corporate citizen.)

Which apparently leaves us with the choice: Locke or Rousseau?

That is – does the concept of CSR fit best with

A Locke-style Small-government Classically-liberal type of socio-economic system, or:

A Rousseau-style Strong-government Socially-liberal type of socio-economic system?

• To me, this comes down to the question: Does CSR figure as a complement or a supplement to the social responsibility enacted by government?

• I express this in terms of what I call the ”complementary” and the ”supplementary hypotheses”…

The Complementary Hypothesis (Locke-style)

• Social responsibility is a null-sum game; public and private social responsibilities crowd each other out. • Thus the more social responsibility is arrogated by centralized, public institutions (elected government, labor unions, etc.) the less social responsibility is voluntarily assumed by individual/corporate citizens, i.e. the private sector defined by its private property.

The Supplementary Hypothesis (Rousseau-style)

• Social responsibility is not a null-sum game; public and private social responsibility does not crowd each other out but rather reinforce each other.

• Specifically, the more formalized responsibility for public affairs is entrusted to the general populace through centralized institutions expressing the general will (elected government, labor unions etc.) the more informal social responsibility is simultaneously encouraged among citizens acting privately (which could be conceived to hold for corporate citizens as well.)

The hypotheses could be the starting point for:

• Further conceptual analysis• Empirical investigation

Thank you for your attention!