Business, the State and Social Responsibility

As private business continues to grow in Russia, the majority of businesspeople are coming to adopt a conscientious attitude to their own society as a core value. This attitude is part of human nature. A vague feeling of past guilt towards society is compelling well-to-do people to atone for it unconsciously.

The goal of business is limited to generating profits. The state, cognizant of this fact, is trying to channel the insatiable greed of business in a direction that would benefit society as a whole.

In the strictest sense of the term, “social responsibility” is the exclusive domain of the state, which has responsibilities to voters, taxpayers and vulnerable groups, while businesses, at most, have only to think of their shareholders. The state exists for the good of society and is responsible to it. By contrast, business only exists for the good of its owners and is responsible to society only insofar as it has responsibilities toward the state.

Still, businesses willingly take on social responsibility, which seems, on the face of it, to be contrary to its nature, because morals and ethics in the amoral market environment are an enormous competi-tive advantage. Private companies benefit from being honest and respectable not only under condi-tions of proper state regulation but under any more or less stable conditions. One way to win respect is to demonstrate “social responsibility”, for instance, showing care for vulnerable segments of society.

Envy and hostility towards the rich spring naturally from inequality, which is rapidly growing hand in hand with the global speculation business. Social responsibility has become an effective tool that allows the rich to soften and even temporarily neutralize this class hatred.

Finally, rich people know best of all how they became wealthy. Well known is the idea expressed by one multibillionaire – “I can tell you how I made all my money except for the first million.”

As private business continues to grow in Russia, the majority of businesspeople are coming to adopt a conscientious attitude to their own society as a core value. This attitude is part of human nature. A vague feeling of past guilt towards society is compelling well-to-do people to atone for it unconsciously.

Thus, social responsibility, though unnatural for moneymakers, is becoming a major instrument of their socialization. At the end of the day, humans are social animals.

In Russia, social responsibility is often perceived as extortion by another name, whereby corrupt officials urge businesspeople to pick up the tab for social services that they have themselves robbed or simply neglected.

Society generally considers the money businesses spend on social responsibility to be ineffective, if not irritating. The disintegration of the state, caused by rampant corruption, is also reflected in the reluctance of officials at all levels to act as professional administrators. They don’t go into details, don’t identify priorities, and don’t understand the difference between the indispensable and the redundant. As a result, socially responsible businesses receive very general instructions – build hospitals, improve playgrounds and repair stadiums.

Meanwhile, businesses cannot comprehend what is actually being asked of them. But it doesn’t need to, because its goal is to please the ruling bureaucracy and demonstrate humility rather than resolve genuine social issues. As a result, its philanthropy is often insincere and ostentatious, ineffective and useless for the public, which is not invited to this “social wedding” of oligarchs and corrupt officials.

This happens even in the ideal case when a business does not try to make money or steal back its own funds during forced missions of “social responsibility.”

However, in many cases, businesses can be truly helpful. Private companies (including small ones) considerably improve conditions in many orphanages in a true display of social responsibility. But, on the other hand, their help makes up for the criminal indifference of officials and lets them get away with it.

Efforts to promote conscientious charity and social responsibility among businesses, up to and in-cluding a Nobel Prize nomination for the Gift of Life fund, seem to be absolutely justified and neces-sary.

Charity funded solely by the small donations of ordinary people, without serious support of the state, foreign funds and big business, is possible in Russia but very difficult. The public continues to raise substantial funds for the treatment of sick children abandoned by the state. Massive volunteer move-ments often achieve spectacular results. However, this kind of charity is limited by the poverty most Russians live in and the hostile attitude of the state. Suffice it to recall how officials tossed out the humanitarian aid collected by ordinary people for the victims of forest fires in 2010.

To sum up, business is the backbone of charity in Russia. To understand its desire to demonstrate social responsibility, it is important to remember that the approval of one’s neighbors is the most important motive in Russian culture. In the era of mass communication, that circle has extended from the local courtyard to the entire country.

The state has an important role to play in cultivating the concept of social responsibility. Almost every successful society is irritated by its state and suspicious of it. But even in an imperfect democracy, the state also feels a sense of guilt and seeks ways to improve this situation.

One way is to encourage business to display social responsibility. Strictly speaking, when the state does this it is delegating its own responsibility, realizing that its capabilities are limited and it cannot resolve all the problems that society considers important. Therefore, the state concentrates only on key problems, informally outsourcing the rest to socially responsible businesses.

Thus, social responsibility and ethical standards not only help businesses derive profit but are also essential for individuals, the state and society.

It is very important to remember the obvious fact that social responsibility and ethics are unable to compensate for the fundamental social injustices perpetuated by a purely free market system.

These compensatory mechanisms are an insufficient substitute. We must drastically change the way society is ordered to correct injustices and create a humane society that corresponds to human nature.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.