On Thursday, Fred L. Smith, founder and director of the Competitive Enterprise Institute, spoke in Grand Rapids at a talk hosted by the Acton Institute. The Acton Institute, which essentially exists to provide a religious justification for capitalism, brought Smith to Grand Rapids to talk about the “Irresponsibility of Corporate Social Responsibility.” Smith, who has a history of making statements dismissing the concept of global warming, opened his talk saying that earlier in the day he was joking with some of the people at the talk “about global warming” but that “sometimes it is hard to joke about these issues,” as their seriousness takes care of themselves, citing the recent cancellation of a hearing in Congress on global warming because of ice storms.
Smith’s Competitive Enterprise Institute, who like the Acton Institute has received money from Exxon-Mobil to question the idea of global warming, touched on the topic several times during his speech. Early on, Smith talked about how he recently spoke in Congress with a group of CEOs called the “Climate Action Partnership” who are working with the government to “create a carbon cartel to restrict the rights of all citizens in the United States to use energy.” He went back to this theme of regulating carbon emissions as a means of infringing on individual rights later in his talk, explaining that Enron was a primary backer of policies that would manage global warming because they stood to make considerable profit when energy became “rationed.” Smith claimed that Enron was aware that when every American had to have a “credit card” rationing energy when they filled up their gas tank, visited grandma, or decided that they would turn their lights on at night, they (Enron) would make money as the “managers of a carbon constrained future.” With this analysis, Smith stated that Enron supported Kyoto, a policy that would raise gas prices significantly higher than the $3 per gallon that had people “up in arms” in the United States. Smith also said that 13% of Americans have never heard of global warming despite what he called the “daily discussions of death, doom, and destruction.” This, according to Smith, shows that most Americans have more important things to do then “worry about the end of the world.” None of his statements on global warming were substantiated.
While Smith’s comments discrediting the idea of global warming are interesting and relevant in light of the support that his organization has received from Exxon-Mobil, the core of his talk was a defense of capitalism and an opposition to the idea that corporations have a responsibility to do anything other than generate wealth for their shareholders. Smith said that modern corporations, who have been responsible for creating the wealth that has funded several centuries of economic growth, are being pressured by the Corporate Social Responsibility (CSR) movement to address issues such as the environment or human rights that are unrelated to a corporation’s purpose. Smith argued that Corporate Social Responsibility is a misguided response to “a real threat to business in the world today” from special interest groups. The CSR response has failed to consider whether they can even meet the demands of the “so-called stakeholder groups” that pressure corporations and whether they should. Smith cited an unnamed acquaintance who once said that “a stakeholder is someone who holds a stake and wants to drive it through the heart of capitalism,” telling the audience that stakeholders want to run corporations despite having no direct interest–unlike employees, suppliers, or shareholders–in the corporation and whether it continues to function as a viable wealth creating entity.
Organizations such as the Rainforest Action Network, Wake Up Wal-Mart, and the Sierra Club have had some success in pressuring companies according to Smith, becoming what he views as heirs to the muckraking movements of the early twentieth century. Smith argued that corporations have been wrong to meet with these movements and to negotiate, because there is no way of “satiating the antagonisms of the enemies of freedom” whom Smith accused of being relentless in their attacks on corporations. CEOs have tried to push issues raised by campaigners under the table by cutting deals, admitting a certain degree of misconduct (often justified by saying they are not as bad others), or agreeing to regulations just to have some guide as to what standard they will be held to. Smith argued that these responses have been a failure, because corporations are not able to and should not address social issues. Instead, Smith argues that these issues should all be addressed at the individual level, because corporations’ only responsibility is to create wealth and knowledge which is then dispersed to individuals in society who can take that wealth and put it towards protecting the environment. If the Corporate Social Responsibility movement had its way, Smith argued that these choices would be “taken away” and given to the “rulers of society” who would then determine how money was spent.
This analysis of the importance of individual action fit within an argument that Smith made claiming that capitalism has been one of the greatest guarantors of freedom in the modern world. Smith claimed that capitalism gives ownership to many people, with competition fostering a “secure and orderly” system within the context of an “egalitarian society” that enhances freedom. Smith praised the “genius of capitalism” as being the way that it has “democratized the privileges of the elites.” Smith did not confine his exclusively to capitalism, but extended it to the whole concept of “civilization,” with Smith arguing that civilization has made the world freer, wealthier, and fairer, with the challenge of civilization being, in Smith’s words, to “bring institutions of liberty to the darker spots of the world.” Smith argued that corporations are “morally positive entities” because they help to disperse power and ensure that power is not concentrated within society. Smith’s praise of capitalism ignored the negative aspect of capitalism, making no mention of the concentration of wealth in United States society or the millions living in poverty or on the streets of cities across the United States. Undoubtedly, their view of the “genius of capitalism” and the spreading of “privileges” would be considerably different than the take of Smith, who has a comfortable job at an organization supported by a variety of wealthy rightwing foundations and corporations. Similarly, Smith’s praise of “civilization” made no effort to define civilization or to engage the various substantive critiques of civilization that question the sustainability of civilization, among other aspects.
However, Smith was not brought to Grand Rapids to have an honest discussion of capitalism, civilization, or corporations. Instead, Smith was brought to defend capitalism and to discredit the various movements and organizations working to fight the abuses of corporations. As such, Smith’s talk fit well within the scope of the work that the Acton Institute has historically done in seeking to provide a religious justification for discrediting activism. The Acton Institute has taken a variety of positions minimizing the threat of global warming, supporting genetically modified agriculture, attacking activists campaigning against PVC products used by the healthcare industry, among others. Smith’s talk was just one part of what has been an ongoing effort by the Acton Institute, and the Institute will likely bring many more such speakers to town in the future.