The Limits of Corporate Social Responsibility
by Professor Prabhu Guptara
The vastness, complexity and contradictions of India
require some minimum historical background if one is to have any hope
of clarity regarding this subject.
These tensions and contradictory pulls are paralleled in the rest of the world. Continental Europe sees declining pensions, health care, and investment in public service infrastructure, while OECD countries have an increasingly lively debate and progressively more telling action in the area of social responsibility (for example, in requiring ethical, environmental and social transparency from Pension Funds14).
Whether the shareholder-activists win or the stakeholder-activists, it is clear to everyone that SR means higher wages and higher taxes - better quality of life but at a higher cost. That does not mean that all differential advantage will disappear, since countries have different natural endowments as well as different cultures and values. Denmark may be as "developed" and socially responsible as Sweden, and the East Coast of the US may be as developed and socially responsible as the West Coast, but that does not make them the same. Harmonisation does not equal sameness.
Nor will increasing worldwide social responsibility necessarily dampen trade and investment flows - most trade and investment even today is within the developed world, not from the developed to the "developing" world. Moreover, the key determinant of trade and investment is risk. It is easy to forget nowadays that India and China were, through history, some of the richest countries in the world. Even as late as the eighteenth century, each of these countries commanded nearly one-third of global GDP. Since then development accelerated in the West while India and China actually regressed. In the case of India, at least part of the decline was due to British imperialism, but at least a part of the progress that India made was also due to the same imperialism. And India has declined in the world league much more in the 50 years or so of Independence than it did in three hundred years of British rule. I would be very interested to see some estimates of the amount of wealth consumed and withdrawn from the country by the British in the three centuries of their rule versus the amount of wealth consumed and withdrawn by the Indian ruling class in the last 50 years.
Today, President Bush likes neither the Kyoto Agreement
nor the International Criminal Court. The governments of most developing
countries would rather base their comparative advantage on simple things
such as cheap labour. Most companies (whether Indian or foreign) would
find it easier to live in the simpler world of shareholder value than
in the more complicated world of corporate social responsibility. Most
individuals too would find it easier to care only for themselves and let
the world go hang. Nevertheless, it is clear that there is and has been
an increasing trend through the last century and indeed the last millennium
towards global standards and global social responsibility. The communications
revolution and global markets make increasingly clear to everyone that
we are all together on this little planet for good as well as for ill.
A single incident at Bhopal makes everyone sit up and take notice. The
collapse of an insignificant currency such as the Baht has consequences
around the globe. The collapse of an Enron or an Anderson changes rules
and attitudes not just in the USA but right round the world. So while
late capitalism presses us all to take less and less time even for ourselves,
it also forces us to ensure that each country makes minimum investments
in infrastructure, education and health. September 11, 2001 has made it
clear to everyone that the global community has a vested interested in
good governance. While a certain degree of poor governance on the part
of certain countries can be tolerated, there comes a point where the consequences
of poor governance make it impossible for us not to intervene, whether
in Afghanistan, the Balkans or the Middle East.
2. St Thomas's first came to north India overland (there were well-established trade routes in what are now Afghanistan and Pakistan). His second journey was by sea to the area around Bombay. His third journey, also by sea, was to South India, which historically had sea links both to the west as far as Africa and Europe and to the east as far as China. There is no record of how long he stayed each time. But there were Christians in north India as a result of his preaching till the eighteenth century. And in South India, the "St Thomas Christians" exist to this day. Not large in numbers, Christians have had a culture-changing influence in India, particularly through their schools and hospitals.
3. Vishal and Ruth Mangalwadi, William Carey and the Regeneration of India: A Model for the Transformation of a Culture, Nivedit Good Books, Mussoorie, India, India, 1993.
4. Geoffrey Oddie, Missionaries, Rebellion and Proto-Nationalism: James Long of Bengal 1814-1887, Curzon Press, U.K., 1999
5. Daniel O'Connor, The Testimony of C. F. Andrews, Christian Literature Society, Madras, India, 1974
6.. J.S.Grewal, The Sikhs of the Punjab, vol. 2.3 of The New Cambridge History of India, Cambridge University Press, 1994
7. Raymond Brady Williams, An Introduction to Swaminarayan Hinduism, Cambridge University Press, U.K., 2001.
8. K. L. Seshagiri Rao, Mahatma Gandhi and C. F. Andrews: A Study in Hindu-Christian Dialogue, Publication Bureau, Punjabi University, India, 1969.
9. William Storrar, Christianity and Democracy, Handsell Press, Scotland, UK, 1997.
10 Vishal Mangalwadi, India: The Grand Experiment, Pippa Rann Books, U.K., 1997;
11, Pat Barr, The Memsahibs: The Women of Victorian India, Secker and Warburg, London, 1976; Dennis Kincaid, British Social Life in India, 1608-1937, Routledge and Kegan Paul, London, 1973.
12 S.K. Das , Public Office, Private Interest : Bureaucracy and Corruption in India, Oxford University Press,. Delhi, 2001; Madhusudan Karmakar, Bubble : A Study of Scam, Scandal and Corruption in Indian Stock Market, Regency Publications, New Delhi, 1999; Bhure Lal, Corruption : Functional Anarchy in Governance, Siddharth, New Delhi, 2002; Tushar Kanti Saha, Democracy in Danger : Criminality and Corruption in Lok Sabha Elections, Kanishka, Delhi, 2000; Francis A. Schaeffer & Vishal Mangalwadi, Corruption versus True Spirituality, 1998.
13. Vishal Mangalwadi, The Quest for Freedom and Dignity: Caste, Conversion and Cultural Revolution, to be published in 2002.
14. From Summer 2000, the British government introduced historically unprecedented legislation, requiring Trustees of Pension Funds to declare in their Statement of Investment Principles, whether and if so to what extent, they take into account social, ethical and environmental criteria. Other countries such as Switzerland, Germany and Australia quickly followed suit, and it is rumoured that the EU is considering standardising that throughout Europe.
15. John Boli and George M Thomas (eds.), Constructing World Culture, Stanford University Press, USA, 1999.
Contents of this website © South Asian Development Partnership 2001-2013.