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Debating Points
Has a Collective Insanity Overtaken the
World?
Some 50
years ago if you had seriously proposed any of the ideas and policies in
today’s neo-liberal toolkit, you would have been laughed off the stage or
sent off to an insane asylum. At least in the Western countries at that
time, everyone was Keynesian, a social democrat or a social-Christian
democrat, or some shade of Marxist. The idea that the market should be
allowed to make major social and political decisions; the idea that the
state should voluntarily reduce its role in the economy, or that
corporations should be given total freedom, that trade unions should be
curbed and citizens given less, rather than more, social protection - such
ideas were utterly foreign to the spirit of the time.
However incredibly it may sound today, the IMF and the World Bank were seen
as progressive institutions. When they were created at Bretton Woods in
1944, their mandate was to help prevent future conflicts by lending for
reconstruction and development and by smoothing out temporary balance of
payment problems. They had no control over individual government’s economic
decisions nor did their mandate include a license to intervene in national
policy,
In the Western nations, the Welfare State and the New Deal had got under way
in the 1930s but their spread had been interrupted by the World War II. The
first order of business in the post-war world was to put them back in place.
The other major item on the agenda was to get world trade moving – and this
was accomplished through the Marshall Plan, which established Europe once
again as the major trading partner for the USA.
On the whole, the world had signed on for an extremely progressive agenda.
The great scholar Karl Polanyi published his masterwork, The Great
Transformation in 1944, a fierce critique of 19th century
industrial, market-based society. Over 50 years ago, Polanyi made this
amazing prophetic and modern statement:
To allow the market mechanism to be sole director of the fate of human
beings and their natural environment….would result in the demolition of
society.
But Polanyi was convinced that such a demolition could no longer happen in
the post-war world. Alas, his optimism was misplaced: the whole point of
neo-liberalism is that the market mechanism should be allowed to direct the
fate of human beings. The economy should dictate its rules to society, not
the other way around.
So what happened?
o
How did neo-liberalism
ever emerge from its ghetto to become the dominant doctrine in the world
today?
o
Why can the IMF and the
World Bank intervene at will and force countries to participate in the world
economy on unfavourable terms?
o
Why is the Welfare State
under threat in all the countries where it was established?
o
Why is the environment on
the edge of collapse?
Why are there so many poor people in both the rich and the poor countries at
a time when there has never existed such great wealth?
Susan George
Associate Director, Transnational Institute. Amsterdam
President, Observatoire de la Mondialisation (Globalisation Observatory),
Paris

Ideopolis
International
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New Academy
Review: Volume 2 Number 3
Autumn 2003
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Professor Tom Cannon; Managing Editor
The death of Sergio Vieira de Mello, the United Nations High
Commissioner for Human Rights, has deeply affected all of us involved in
the Review. The loss of a person who could combine an awareness of the
challenges and opportunities across the human rights agenda with the
belief that positive change was possible is a loss for everyone. That he
was killed with colleagues from across world who had come together to
help the people of Iraq is doubly tragic.
Their loss is a challenge to all of those sharing his belief that good
corporate citizenship “is not, and must not be, a mere public relations
exercise … it is a platform for showing how markets can be made to serve
the needs of society as a whole (and in doing so) reconcile the creative
forces of private entrepreneurship with the needs of the disadvantaged
and the requirements of future generations.”
Delivering this is a challenge to the corporate community to achieve and
disseminate best practice. The academic community has a responsibility
to review, scrutinise and apply the best research tools to shape,
determine and communicate these standards. Public and voluntary sectors
can and should create frameworks, policies and where necessary regulate
to embed these practices while intermediary and advocacy bodies need to
represent diverse interests and ensure sound distribution. Across all
these communities and processes particular challenges exist to ensure
that the standards of responsible action expected of others elsewhere
are seen across the corporate social, ethical and sustainability agenda.
Leaders
are few and followers many for
a reason.
Anita Roddick
SMEs must develop greater knowledge of the different ways of creating
positive relations with their stakeholders, as well as the positive
effect that investment in CSR can have on company performance.
Mario Molteni
Migration has become a hot-button issue…
John Morrison
Seventy percent of the studies reviewed showed a positive and
statistically significant relationship between CSR and financial
performance.
Marina Martin Curran
As corporations buy the crop with the prevailing low world price,
coffee farmers have begun to shift to other crops and some have chosen
to sell off their lands.
Chairmaine Nuguid-Anden
For the neo-liberal, the market is so wise and so good that like God,
the Invisible Hand can bring good out of apparent evil.
Susan George. |
Contents
A View
from the Chair
by Anita Roddick
Notes from
the Edge
by Tom Cannon
Human
Rights
Human
Rights and Business: an update
by John Morrison
Leader
to Leader
Re Sergio de Mello by Lord John Browne
Debating
points
How a collective Insanity has taken grip of the World by
Susan George
Refereed Papers
Investigating the link between corporate social responsibility and
financial performance by MM Curran
Corporate Social Responsibility in Small/ Medium Enterprises by
Mario Molteni
Recognizing Saintly Business by Robert Sexty
Managing
Codes
by
Tom
Cannon
Case
Studies
Saving the Barako Bean: The Figaro Coffee Company’s Approach to Fair
Trade by Charmaine Nuguid-Anden
Research Notes
The Ethical Ratings Phenomenon by Christopher J. Cowton, and
Christopher J. Low
Web News
Parting
Shots by
David Grayson
Guarding
against
‘complicity’ in human rights abuses
In
theory, there are several possible layers of corporate complicity in
human rights abuses, which might be characterised as ‘direct’,
‘indirect’ or ‘silent’.[i]
Companies feel that it is not clear what might be regarded as complicity
and what might not. A company’s presence in any country where the
government is unwilling or unable to uphold universal human rights
standards must raise questions about possible indirect complicity. Yet
only rarely is it the appropriate solution for a business to withdraw
from a country completely. In fact it can be argued that, accept for one
or two cases, any business is likely to exert more influence by
remaining in the country. The challenge for any initiative focused on
business and human rights is to develop criteria and tools that can be
applied effectively within the local and national operations of a
company to guard against any possible complicity.[ii]
An example of this is the recent interest in the nature of Host
Government Agreements (HGAs) between international companies, in
particular the extractive sector, and specific governments in areas of
operations. The consortium of companies, led by British Petroleum,
developing the Baku-Tbilisi-Ceylan pipeline have recently adapted their
HGA in light of human rights concerns.[iii]
The implication is that good corporate governance requires a respect for
international human rights, protecting the interests of a range of
societal actors, and these cannot be exempted through bilateral
arrangements with national governments.
[i]
Clapham and Jerbi (2001)
“Categories of Corporate Complicity in Human Rights Abuses”.
[ii]
For example to the tools developed by the Danish Institute for
Human Rights (www.humanrights.dk)
[iii]
Amnesty International UK (2003) Human Rights on the Line: The
Baku-Tbilisi-Ceyhan pipeline project, AIUK: London.
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Dame Anita
Roddick
Every real and good change of significance,
every revolutionary idea, every heartfelt gesture that changes one life
or a thousand, was once seen as eccentric. Leaders are few and followers
many for a reason: Change requires bucking the status quo, and bucking
the status quo requires a willingness to be perceived as crazy,
dangerous, or ridiculous. Like entrepreneurs, revolutionaries,
activists, and changemakers of every stripe lead because they cannot
follow that with which they do not agree, or which limits their
imaginations. They change the world because their passion and conviction
will not allow them not to.
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The Human
Rights Debate Revised
Abstract
A
final area of predicted growth is the relationship between business and
the migration and diversity debates. This is an area of policy where it
has been government that has failed to provide any real leadership and
now migration has become a hot-button issue across Europe, Australia,
parts of Asia, southern Africa and parts of the Americas. It is in
Europe and Australia in particular that being ‘tough on migration’ has
become an election winner for politicians: note for example the recent
election results in Switzerland. The ‘business case for migration’ is a
strong and compelling one and it emerges periodically through the pages
of the Wall Street Journal, Financial Times and the Economist. It is
perhaps only a matter of time before business leaders in Europe feel the
need to take some direct responsibility, the way that Bill Gates and
others did (successfully) in the face of the large cuts to US
immigration proposed by Congress in 1995. In 2002, Kofi Annan called on
the business sector to play a more direct role in the shaping of future
international migration policies and there are now several initiatives
in place through which they can.
John Morrison
[ii] Kofi
Annan welcoming ‘The Declaration of The Hague on the Future of
Refugee and Migration Policy’ at the Peace Palace, The Hague in
November 2002. Article 18 of this Declaration relates directly to
business. (www.sidint.org).
[iii] For
example through interaction with the ‘Club of the Hague’ or the
planned United Nations Commission on Migration.
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Recognizing Saintly Business: Lessons from Saint Homobonus
Abstract
The history of saints and of one saint in particular, Homobonus, known
as the patron of businesspersons, provides lessons regarding how
contemporary business persons are recognized for socially responsible
initiatives. The paper gives background on sainthood and Homobonus and
identifies issues relating to the recognition of social responsibility
in contemporary society. Robert W. Sexty Memorial University of
Newfoundland

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Developing Codes of Management
Practice
Abstract
Despite Enron and MCI,
hardly a week seems to pass anywhere in the business world where the
ethics, values and behaviours of managers and business leaders are
questioned. In the US, the Justice Department is questioning executives
at struggling IT giant, Qwest Communications International Inc. while in
Britain politicians complain against corporate greed as CEO’s walk away
with massive bonuses while shareholder value and jobs are destroyed. In
India, the Bofors scandal rumbles on, seemingly forever, but in Russia
President Putin has moved to challenge the Bandit capitalists.As
the criticisms have mounted, organisations have attempted to respond by
introducing codes of practice for managers. The aim of this paper is to
review the nature of these codes, explore the roles of different agents
who play a part in advocating, introducing and embedding these codes.
The paper reviews managers attitudes to codes by drawing on a major
study of management codes undertaken under the auspices of Britain’s
Management and Enterprise National Training Organisation.
Professor Tom Cannon, Ideopolis International |
Corporate Social Responsibility in Italian SMEs
Abstract
This
article presents the results of a study on the state of Corporate Social
Responsibility (CSR) in Italian Small and Medium Enterprises (SMEs). It
was carried out on a sample of 427 companies which employed from 20 to
250 workers and included seven technical areas: the relationship with
personnel, corporate governance, the state of health, safety and respect
for the environmental, relations with the community, the relationship
with customers and suppliers, CSR instruments and CSR awareness. From
many points of view the results were encouraging although there are some
areas where SMEs have weak points. In particular there is strong
concentration of decisional power in the hands of the company head,
limited career possibilities for women, little interest in voluntary
environmental projects, little knowledge about new forms of
‘partnership’ with the community and social marketing and little use of
the typical instruments of CSR.
On the other hand, many areas show that social values are written into
the DNA of Italian SMEs. This is shown above all by their personnel
relationships, strong integration with the local community, and the
importance given to the ethical control of the supply chain. In the
final part of the article, we have made some suggestions of how to
intensify the social responsibility of Italian SMEs, which are also
relevant in a European context.
Mario Molteni Full Professor of Management at
Università Cattolica del Sacro Cuore |
The Ethical Ratings
Phenomenon
- ABSTRACT
IThe
rating of companies’ ethical, social and environmental performance is an
increasingly common practice. This paper describes a research project
designed to explore empirically this phenomenon of growing importance.
It outlines a framework that positions rating agencies as information
intermediaries and from this derives an initial list of research
questions relating to the three major categories of players involved –
companies, rating agencies and users of the ratings generated.
Professor
Christopher J. Cowton and Dr Christopher J. Low
Centre for Enterprise, Ethics & the Environment Huddersfield University
Business School |
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