On Corporate Social Responsibility and the intrinsic weakness of Stockholder Capitalism

Any corporation has a single raison d’etre, that is the maximizing of wealth accumulation. This is particularly true for stockholder companies. For these the accumulation of wealth and the maximizing of profit is not just a cause in itself, it is also the responsibility of the company. So much so in fact that a shareholder can legaly take his/her own company to court if he/she feels that this responsibility is being shunned. Many analysts have taken this to be proof that Corporate Social Responsibility (CSR) is an impossibility. True, on a purely moral basis, a company owned by shareholders cannot be morally responsible if the consequence of such responsibility is a net loss in profit, but the simplicity of such an analysis is defeatist in that it doesn’t look closely enough at the structure of these companies, and hence is incapable of realizing that in this there is a weakness that can be used. This weakness is the possibility of moral choices having economic consequences.
If we examine the shareholder company structure more closely, we will come to the realization that although companies cannot act morally if doing so adversely effects their profits, by the same token, they must act morally if not doing so adversely effects their profit. By this I mean to say that if an immoral act is negative for the profit of a company, it must cease committing the act. From this one can deduce the idea that a purely moralistic attack on a company won’t have an effect, however a combined economic-moralistic attack must have an effect.
Hence the question arises: How does one go forth with such a combined approach? The answer is theoretically simple, yet highly difficult in practical terms. The answer is consumer awareness. Rather than approaching the company by saying: “so and so, in which your company partakes, is immoral”, we must rather approach the consuming public by saying: “this and this company, whose products you buy, partake in such and such immoral crimes”. This approach is difficult, as one is dealing with a vast amount of individuals, but if completed correctly it will result in consumers, and in some cases certain morally conscious shareholders (the Norwegian Oil Fund stands out) will withdraw their support for the given company. Once this has been done and the resulting calculated loss for the company, as a whole, exceeds the profit in the criticized area of investment, the shareholders will find the investment transformed into an economic liability and hence can take the given company to court if a divestment doesn’t take place.
Allow me to illustrate with an example: Caterpillar, or Caterkillar as it has been dubbed. This tractor company has become infamous for its role in the collective punishment towards Palestinians through the house demolitions as completed by the Israeli army (IDF) using the specially designed Caterpillar armoured bulldozers. Rather than informing the Caterpillar shareholders of this moral violation (although this has had some effect as there has actually been a shareholder vote on the issue), we should inform consumers of the crimes committed by the company. Caterpillar’s consumers include building companies as well as middle (or higher) income individuals that buy products from the Caterpillar clothing brand. This approach can further be strengthened by working with and through labour unions who will, (hopefully) induced by their solidarity with the Palestinian people, urge their contractors to use alternative machinery. If this is done correctly, and consumers react, one need only wait until the loss of income in these sectors surpass the income from selling bulldozers to the IDF. When that occurs Caterpillar will be forced, by its own shareholders, to cease selling equipment to the IDF. If this campaign is a success we can logically extrapolate from this that no other bulldozer producing company will dare invest in the IDF for fear of suffering a similar economic setback.
Some will argue that we cannot demand such a sacrifice from average consumers. Against this argument two points come to the fore. First of all, is it really a sacrifice to change brands so that an act of injustice will cease? Secondly, if an individual cannot be expected to stand for an ethical society, then who? This approach is difficult, indirect and defeatist in the sense that it “gives up” on companies as institutions able to make moral decisions. It can also be said to unjustly abuse the guilt of the average Joe. However, unlike the CSR-approach it is realistic. It is naive to hope that companies will become moral beings on their own accord. In fact, as I have shown, such a free will moralism is almost structurally impossible. It is therefore time that we realize the need for a forced moralism, which is better than none at all.