Is the currently in-vogue CSR — Corporate Social Responsibility — a load of crap? That’s the Q that Aaron Chatterji and Siona Listokin address in Democracy (may need to get a free subscription to read the whole thing).

In their opinion, CSR could do more harm than good, cuz “instead of fighting social-movement organizations in shaping legislation, firms could sit down with these groups to create and monitor less-stringent private regulation.”

And creating watered-down regulation is something corps are really, really good at doing. As the writers point out, we now have the Workers’ Rights Consortium (WRC), the Fair Labor Association (FLA), and the Worldwide Responsible Apparel Production (WRAP) accord for the clothing industry. The differences between these are many and vast — but few consumers know the difference:

Unfortunately, one feature of voluntary codes of conduct is that companies can pick and choose the standards to which they adhere, particularly if consumers are confused about the basic differences.

And this consumer confusion makes it difficult for nicer companies, cuz even if they wanted to go with the tougher standards, “the high costs could make them uncompetitive in supplying retailers” — especially if consumers can’t tell the diff.

The authors argue that CSR’s “left behind a patchwork of confusing codes, voluntary standards, and weak or nonexistent monitoring” — and perhaps weakened the demand for progressive govt. regulations to boot.

Thus, the authors argue that instead of trying to engage companies in “the attractive branding of the corporate social responsibility movement,” we should just lobby for govt. action, putting our energy and capital towards efforts that might actually make a difference.

For especially large market failures, government action simply may be the only way to comprehensively address the problem…. It is time to recognize that most market failures can only be solved by governments and multilateral agreements, and progressives need to redirect activist pressure appropriately.

I definitely hear the consumer confusion thing…. What do you think about the authors’ stance?

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