The Conscious Capitalism movement also exaggerates the potential of
business firms to “do good.” An important insight and contribution of Conscious
Capitalism, and the corporate social responsibility and sustainability movements
in general, has been to show that firms have more potential to make positive
social and environmental contributions than many managers and owners, as
well as critics of corporate capitalism, have recognized. Most companies, for
example, have found profitable ways to treat their employees better or to reduce
their environmental footprints. In addition, some companies have discovered
profitable ways to address the needs of the world’s poorest citizens. The list of
such activities is large, and growing.
Some critics scoff at such profitable activities, claiming that they are not
socially responsible at all but, rather, “just good business.”28 Others claim that
most of these activities have been “low-hanging fruit,” and the opportunities for
future “win-win” business opportunities have been exhausted, or will be much
harder to come by in the future. In our judgment, such criticisms are misguided.
Many business opportunities to do both well and good are not like the proverbial
ten dollar bill lying on the street, just waiting to be picked up by any far-sighted
manager or economist. In fact, discovering such business activities has often
required, and will continue to require, a conscious commitment on the part of
entrepreneurs and managers to look for them.
Wal-Mart’s recent environmental efforts are an instructive case in point.
Many of the firm’s recent, highly publicized environmental initiatives have
resulted in substantial cost savings to the company.29 This raises an interesting
question: why didn’t the firm’s highly cost-conscious managers discover and
adopt them earlier? Why did they only begin to do so after the firm decided to
make sustainability an important strategic goal (albeit motivated, in part, as a
way of deflecting public criticism from its labor practices)?
Why weren’t these costless and cost-saving activities undertaken until the
firm began to work with environmental consultants and non-government organizations?
The most likely answer is that its managers had neither the time nor
the interest to focus on these particular business opportunities; they had other
priorities. In short, the “consciousness” of capitalists, or the values they bring to
their business activities, do matter; it can enable them to uncover opportunities
for virtuous behavior that more conventional owners or managers whose only
focus is on the “bottom-line” are more likely to overlook.
Yet, as we discuss below, the number of such “win-win” business opportunities
is also limited. It is unrealistic to suggest that even the most socially
conscious and committed business managers can “solve the world’s problems.”
Many of those problems are simply beyond the scale, scope, and competencies
of business firms to address. Some of those problems may require governmental
action, while others are better addressed by non-profits or by social enterprises
not required to deliver a market rate of return. Capitalism, as Kristol noted, is a
wonderful system whose ability to improve public welfare is indeed extraordinary—
but there are many laudable goals that the market is simply incapable of
accomplishing—however commendable the intentions and actions of Conscious
Capitalists.