Corporate social responsibility revisited.

In the October reason, two businessmen and an economist--Whole Foods CEO John Mackey, Cypress Semiconductor CEO T.J. Rodgers, and Nobel laureate Milton Friedman--debated the idea of corporate social responsibility (CSR). The feature generated further conversation in other media outlets, from Time to The Wall Street Journal. Here's a sampling:

"Rodgers assailed the CSR-imbued philosophy that guides Whole Foods, calling it similar to those of Karl Marx and Ralph Nader. Mackey, an avowed libertarian, replied that his approach has brought a lot more wealth for Whole Foods' investors than the one embraced at Cypress, which, he noted, has struggled to be profitable. Indeed, though Cypress made a small profit in 2004, it booked losses in the three previous years."

--Unmesh Kher, Time, December 12

"[Mackey] realizes (as he should) that there are groups of parties whose 'good feelings' (trust which allows lower transaction costs and thus increased efficiencies) extend beyond the shareholder. But then [Mackey] throws the door open to the whole world--arguing that if the shareholders don't mind and it makes him and the other managers 'happy,' why not? And his point is well-taken--why should anyone but the owners (and, of course, the potential owners--takeover firms, hedge fund operators, institutional investors) object to this strategy?

"My problem is that there is no evidence that 'making nice' with those antagonistic to economic and technological change has any positive affect on the bottom line ... and there is considerable evidence that the Pharisee strategy ('Thank you God, that I'm not as bad as those other sinners') merely makes one a target. Gary Hart's 'If you can find anything bad about me, print it' is not a wise strategy for any profit-seeking firm."

--Fred L. Smith Jr., The Wall Street Journal Online, December 6

"It doesn't take much to send Thurman John Rodgers into full-scale pugnacious mode. Over the years he has taken on a Franciscan nun, Jesse Jackson and his own industry on behalf of the principle that corporate management should be freed from political fashions, foolish regulations and government handouts.

"So no one was particularly surprised at the intensity of his remarks in a forum on corporate social responsibility last month in the libertarian magazine Reason ... Rodgers went ballistic at Mackey's 'subordination of his profession as a businessman to altruistic ideals.'

"When I reminded Rodgers that San Jose-based Cypress also believes in corporate philanthropy and good employee and customer relations and thus that he and Mackey were not so far apart, he repeated that emphasis is important: 'I'm not a food bank contributor who decides to make semiconductor chips. I'm a chip guy who gives to a food bank'"

--Michael Hiltzik, Los Angeles Times, November 3

"A recent issue of Reason magazine features a spirited debate between John Mackey, the founder of the Whole Foods grocery chain, who lays out the business case for CSR, and two critics--economist Milton Friedman and [T.J. Rodgers], founder of Cypress Semiconductor, who argue that businesses do the most for society just by maximizing shareholder profits. Liberal advocacy groups, meanwhile, dismiss CSR as toothless self-regulation designed to gussy up the tattered image of investor capitalism"

--Steven Pearlstein, The Washington Post, October

"'The business model that Whole Foods has embraced" [Mackey] argues, 'could represent a new form of capitalism, one that more consciously works for the common good instead of depending solely on the "invisible hand" to generate positive results for society. The "brand" of capitalism is in terrible shape throughout the world, and corporations are widely seen as selfish, greedy and uncaring. This is both unfortunate and unnecessary ...'

"Oh, come on. The 'brand' of capitalism is in better shape today than probably at any time in history when compared with its discredited competitors. And where did Mackey get the idea he's the first capitalist committed to delighting customers while treating employees and the community with respect?"

--Vincent Carroll, Rocky Mountain News, September 30