Why There's No Such Thing As An Ethical Business Under Capitalism

this episode is brought to you by curiositystream get free access to nebula with your subscription and check out the first five episodes of my original series the new f word so Nespresso is a b Corp now that seems a little weird if you haven't heard of them before B corporations are for-profit companies that have been independently certified as meeting certain social and environmental standards by a non-profit called vlab not to be confused with bone lab which is a VR game where you beat up skeletons or something I don't know in exchange for running their business according to B lab's ethical business code companies get rewarded for their good behavior with the right to put a little B on their products and in their ads and that way consumers know that they're not an evil business and that they're making the world a better place so now that you know the idea behind B Corps what is Nespresso doing in that club Nestle nespresso's parent company is undeniably one of the most evil companies in the world and it's not even a competition the company regularly monopolizes the water supply in disenfranchised communities Taps them dry and then sells the water back to the community at a massive premium in plastic bottles it's also responsible for rampant malnutrition disease and infant mortality in global South countries where it promoted using formula over breastfeeding starting in the 70s despite knowing full well that the countries it targeted didn't have widespread access to water that is safe for babies to drink so making formula with it was incredibly dangerous and as a bonus unaffordable not to mention still to this day Nestle uses child slave labor to harvest its cocoa according to multiple NGO investigations and that's the parent company Nespresso itself is no better Nespresso also uses child labor to Source its coffee it has also been found guilty of wage theft and not to State the obvious but nespresso's entire business model is based on selling aluminum pods you can use a grand total of one time per tiny shot of espresso now Nespresso says that around a third of its pods get recycled but there is a lot of skepticism about that number and even if it's accurate that's still a conservative 12 600 tons of aluminum going to a landfill every year now I'm no expert but this doesn't really sound like a company quote meeting high standards of verified performance accountability and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials in any case as much as these past 2 minutes and 32 seconds might make it seem like I'm going for the all-time any percent libel lawsuit speedrun this video isn't about Nespresso and it's not about the B Corp certification process either those are two interesting topics but for this video we're going to zoom out a little and talk about the umbrella that they both fit under corporate social responsibility if you haven't heard about this before it's probably because it has a couple different names but whether you call it CSR stakeholder capitalism or ethical business practices this video is going to look at how the language of ethical profit making whether it's honest or dishonest not only doesn't work but actually does the opposite of what companies say CSR as I'll be calling it for the rest of the video cements the social inequality exploitation and environmental destruction companies say they're fighting against and in fact actively prevents positive change from happening that is because beneath a veneer of change CSR conceals a deep dogmatic commitment to preserving the status quo let me make it clear from the beginning I have always supported the human right to water everyone should have enough Clean safe water to meet their fundamental daily needs if we give water value there will be an incentive to invest in looking after our supply it used to be the case that companies couldn't care less about having ethical Optics that's a huge generalization of course history is Rife with examples of companies facing public scrutiny over immoral business practices and rethinking the way they do things but for a while now companies operating under the neoliberal consensus have happily adopted Milton Friedman's idea that the only responsibility a business has is delivering profits to its shareholders after all it's an idea Milton inherited from Adam Smith who claimed the Invisible Hand of the market will naturally tend towards the greatest good when self-interested greed is the driving philosophy of an economic system you've probably heard that Smith quote that goes it is not from the benevolence of the butcher the Brewer or the baker that we expect our dinner but from their regard to their own interest we address ourselves not to their Humanity but to their self-love or along similar lines quote the rich in spite of their natural selfishness and rapacity without intending it without knowing it Advance the interest of the society that idea that businesses and the wealthy more generally are just gonna do what they do and consumers and competition will sort things out for the better had been hegemonic for a long time but it just isn't anymore and it's not hard to see why left to their own devices businesses absolutely do not do the right thing and I can prove that just by saying the words microplastics P bottles and Sweatshop or by putting these two headlines side by side and just like that I think I've made my point succinctly enough nobody genuinely believes in the Invisible Hand anymore so the new mantra of capitalism has become doing well by doing good businesses that wish to succeed now face a lot more pressure from the public to take an active role balancing profit with societal responsibility catering not just to shareholders but all stakeholders meaning employees suppliers local communities ecosystems and even future Generations at least so goes the story but of course plenty of companies are ready to be completely dishonest with this kind of rhetoric words like greenwashing and pink washing are all too familiar these days because there's just no shortage of companies out there willing to use the language of social justice and ecological sustainability to make a quick Buck without actually changing the awful things they do whether that's a little green sticker that doesn't mean anything or promises to be carbon neutral in 50 years without doing anything to change right now CSR is good PR so companies are A-Okay with l-y-i-n-g who wrote that that was but what about companies that put their money where their mouth is and actually engage in CSR the truth is that they aren't any better and I can make that point with both a weak realistic case of a company behaving in line with CSR principles and a strong hypothetical scenario where I stack the deck against my arguments take Salesforce as an example of a realistic case of how CSR works in the real world last year Salesforce made a big show of donating 1.5 million dollars to fund anti-homelessness organizations and in typical Silicon Valley Fashion launched an anti-homelessness app because that's what the anti-homelessness movement needed an app but anyway forget the app the point is that Salesforce got a bit of good press about Their donation in Outlets like Business Insider which they expected because back in 2020 the company got the same kind of favorable coverage when it donated 118 million dollars in education grants the same year it made five billion dollars in quarterly sales together the acts of generosity and Sky High profits got the CEO of Salesforce on CNBC where this happened can we conclude that being good actually generates great numbers well as I said Jim this is a victory for stakeholder capitalism it shows that you can do well and you can do good at the same time and then the next day in August of 2020 Salesforce fired a thousand employees when companies actively engage in CSR and put their money where their mouth is by doing something charitable or ethical very often it's not to do actual good but to divert attention away from the ways they're still doing their usual morally reprehensible business CSR like billionaire philanthropy exists largely so that companies can launder their reputations and come out looking if not good at least marginally better than the rest companies rely on consumers succumbing to moral self-licensing the idea that a little good here justifies evil somewhere else so that they won't face too much backlash and it works because we're very vulnerable to it in a study out of Germany that's consistent with the rest of the literature researchers found that telling test subjects a towel was made out of organic instead of conventional cotton made them less likely to care about the treatment of workers sewing the towels together then test subjects who are only presented with conventional cotton towels in the study's own words if one facet seems ethically fine another unrelated facet becomes significantly less relevant companies know that if they do one good thing they can get away with continuing to do bad stuff and in this way CSR isn't really about creating a more ethical economy just one where a single instance of good ethics can be traded in for a blank check but let's assume for a second that we live in a fantasy world where everything I've just said doesn't apply a world where companies never greenwash and never rely on moral self-licensing to do one good thing so they can cover up all the bad basically a world where ethical businesses are actually ethical all the way through what would be wrong with CSR then well two things one it wouldn't last long because companies know that they can't be blameless in all aspects of their business and remain profitable without universally enforced rigid standards voluntary ethics clashes with competition the market in most economic sectors is simply too punishing for Good Deeds it's almost always cheaper to do things the unethical way and that gets reflected in a business's profit margins and in the price at the counter at the end of the day most consumers don't have the time to find out which companies are actually doing an ethical job and which ones don't care or are lying to them and most can't afford not going with the cheapest option on anything but maybe a few Choice products cheapest wins nine times out of ten in an economy where there are barely any limitations on how unethical a company can be to bring the price down in theory the B Corp certification was supposed to help with the first part of that equation telling consumers succinctly which companies are good and which ones are not but like Nespresso or another B Corp Brew dog have shown the little B doesn't really mean that much and even if it did paying your workers fairly eliminating pollution from your manufacturing process recycling waste in-house those are all extra expenses for a business running an ethical business is fine while the money is steadily flowing in but the moment the tap starts to run dry businesses have to make a decision either they stay uncompromising in their ethics and run their business into the ground or they get bought up by a more profitable less scrupulous competitor or they become less scrupulous themselves and abandon whatever it was they were doing right no matter what businesses choose things get worse some companies might might make it out of that scramble holding on to their social justice practices but only exceedingly few in business ethics are a luxury profits are still the bottom line no matter how much a business wax is poetic about doing well by doing good the minute they stop doing well the good can beat it under a capitalist system you cannot be unprofitable and that will always take precedence over any concern for social and environmental justice because if it doesn't it's chapter 11 time the second problem is that the world shareholder capitalists are selling us isn't even desirable in the first place to quote anans it's a vision of the world in which social justice and the concentration of power would somehow increase in tandem at infinitum what shareholder capitalists are selling us with their corporate responsibility rhetoric is a world in which change is constantly supervised by the winners of capitalism and their allies a world where the biggest beneficiaries of the status quo should play the leading role on the ways in which the status quo should be reformed it's not a more Democratic Society or a society that's more just it's a society where the ways in which change happens are exclusively limited to change that doesn't hurt those at the top and businesses bottom line it's all based on a promise that businesses will be better without giving up any control just because it's the right thing to do and you might be thinking that I'm exaggerating that after all businesses aren't asking for a monopoly on societal change they just want to participate in the process you might be thinking right now that if there's something businesses can't do because they need to remain profitable there's nothing to stop Civil Society from filling in the gaps right wrong CSR is a strategy conceived explicitly to avoid structural change and to block off alternative Avenues to It Business Leaders are hoping that by giving us crumbs of change they get to stay in charge and that the great evils of society that they profit from things like massive unemployment poverty environmental destruction and so on don't actually get solved they prefer a world of Band-Aids over structural Solutions because a structural solution would involve abolishing the power and the privilege they've accumulated under capitalism and this explanation isn't coming from me a capitalist hating Kami billionaires are openly admitting that this is a last-ditch effort to preserve the status quo they benefit from take vinod khosla a billionaire venture capitalist for years now he's been arguing for a guaranteed minimum income for everyone along very similar lines to the CSR crowd but costla isn't doing this for some humanistic reason but because quote to put it crudely it's bribing the population to be well enough off otherwise they'll work for changing the system they're just admitting it now with CSR companies are making sure that they can continue to profit that they can remain powerful by using that profit to Lobby against strict regulations and that by showing a little voluntary Goodwill they can prove to us that they should stay totally unaccountable that might work for a while but as with any system where power is kept unaccountable the real test happens during times of crisis how will you feel when things hit the fan about keeping decision making power in the hands of an unelected class of business savvy billionaires whose only claim to power is making the line go up and promising that they would be good personally I don't feel great about that but ultimately that is what is being sold to us with CSR let us businesses keep making our profits we'll be good about it just don't get involved yourself or actively try to change things in a fundamental way to prevent bad things from happening in the first place at the end of the day every company in the world will choose public pressure over public control you can always just ignore a protest when you're in charge and to quickly offer some solutions because I get comments every week complaining that I don't give Concrete Solutions I Do by the way they're just always the same so I don't put them in every video join a socialist organization unionize your workplace educate yourself your friends your co-workers without class Consciousness and class solidarity we do not have the power to force change all we can do is grovel at the feet of the capitalist class but if we learn from history if we understand what militant labor has achieved in the past the victories it's won for us vacation time the eight hour work day the 40 hour work week and so many more then we can begin to develop Mass power and make sure our words aren't seen as complaints but dictates no business however ethical they claim to be will ever act in the interest of the working class we have to do that ourselves hey there I'm gonna do the sponsor read a little differently this month because I could really use the support for the past year or so I've been working on a nebula original series called the new f word it's a deep dive into the history ideology and Resurgence of fascism around the world I'm really proud of what we've produced so far and if you'd like me to be able to keep making bigger budget original content please consider signing up for the Curiosity stream nebula bundle to watch the series it's less than 15 bucks a year for both platforms barely over a dollar a month which I honestly believe is the best deal in streaming we've got five episodes out right now with a new one scheduled for release every month through the end of the series I love making videos for YouTube but what I've always wanted to pursue is long-form on location documentary work because there are so few documentaries from an explicitly socialist perspective and there are so many stories to tell in order to get the funding to do that I need to prove that people want to watch my work but besides supporting me your membership gets you access to curiosity streams catalog of thousands of non-fiction titles in every category imaginable whether whether you're interested in history biology art you name it you can find it there and if you somehow haven't heard about nebula yet it's home to content from educational creators all across YouTube many of whom I'm lucky enough to call personal friends nebula gives creators a way to diversify their income to try things that wouldn't work on YouTube and to do the stuff we really want to do and curiositystream has supported those 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Channel: Second Thought

Views: 490,323

Keywords: Second thought, second thought channel, facts about, facts you didn’t know, things you didn’t know, socialism, capitalism, stakeholder capitalism, ethical business, csr, corporate social responsibility, nestle, child labor, Nespresso, b-corp, b corporation, learning, education, educational videos

Id: idBdAw5PuTI

Length: 18min 16sec (1096 seconds)

Published: Fri Jan 06 2023