BFI 2015 LD Corporate Responsibility

8/18/2019 BFI 2015 LD Corporate Responsibility

1/32

LD: Corporate Responsibility

Corporations ought to value their

responsibility to shareholders over the

public interest when the two conflict.

By: Scott Pettit

Beehive Forensics Institute

skpettit@gmailcom

!"#$"%'

mailto:[email protected]:[email protected]


2/32


Corporations ought to value their responsibility to shareholders

over the public interest when the two confict..............................1

Topic Overview.....................................................................3

A Case...............................................................................6

1 AC...........................................................................................7Contention 1:.............................................................................................8

Contention 2:...........................................................................................12

eg Case............................................................................131 C.........................................................................................1!

Contention 1............................................................................................16

Contention 2............................................................................................18

Contention 3............................................................................................21

A Cards............................................................................"3

eg Cards..........................................................................."7

Additional #esources...........................................................3"


3/32


(opic )vervie*

Be+ore *e can a,,ress this resolution- *e must ans*er some important

.uestions /ho is consi,ere, to be a sharehol,er0 /hat is the public interest0

In *hich type o+ scenarios *oul, one group bene+it over another0

What is a shareholder?

Investope,iacom ,e+ines a sharehol,er as 12ny person- company or other

institution that o*ns at least one share o+ a company3s stock Sharehol,ers are a

company4s o*ners (hey have the potential to pro+it i+ the company ,oes *ell- but

that comes *ith the potential to lose i+ the company ,oes poorly 2 sharehol,er

may also be re+erre, to as a 5stockhol,er56 (his in,icates that sharehol,ers are

not the in,ivi,uals in charge o+ running the company on a ,ay7to7,ay basis

(hese are people or groups that have investe, money in hopes that a company

,oes *ell an, their investment gro*s in value

Sharehol,ers are more than 8ust people In the ma8ority o+ ,evelope, nations-

the general public has much o+ their retirement savings- either through mutual

+un,s- IR2s- or pension plans- investe, in corporations through the public

market (his makes this resolution a little more ,i++icult to ,ebate /ith this

un,erstan,ing- one coul, easily argue that the public interest nee,s to +ocus on

the success o+ corporations +or the bene+it o+ its sharehol,ers 9any times in

recent history- recessions have hurt the general public ,ue to ma8or loses +or

sharehol,ers

What is the public interest?

o* you ans*er this .uestion is going to have a great impact on this ,ebate

(here are many variances o+ the phrase 1public interest6 bet*een la*

applications- business applications an, government applications 2 basic

,e+inition +oun, through the online business,ictionarycom states that the public

interest is the- 1/el+are o+ the general public ;in contrast to the sel+ish interest o+

a person- group- or +irm< in *hich the *hole society has a stake an, *hich

*arrants recognition- promotion- an, protection by the government an, its

agencies6 In most cases- 1government an, its agencies6 coul, be replaces *ith

1corporations6

(he public interest is base, on sub8ectivity (here+ore- *hat is acceptable in oneinstance may not be acceptable in another (he a++irmative si,e is going to *ant

to a,,ress the ,e+initions in a more utilitarian *ay 9orality an, *hat is best +or

the community is also going to be important +or the a++irmative =nvironmental

polices ,o play a part in the public interest i+ it is ,e+ine, as such

(he negation is going to *ant to +ocus on the con+usion that is create, by trying

to ,e+ine the public interest >niversal rights an, application o+ i,eas may be


4/32


great +or some but not +or everyone For e?ample- liaise +aire capitalism might

not be in the public interest in all societies

“When the two conflict”

(he resolution asks us to only look at instances *hen one group is going to

bene+it an, the other is not It ,oes not promote the i,ea that corporations mustal*ays value their sharehol,ers an, vice versa (his begs the .uestion- *hat is

going to be an instance *hen the t*o si,es *ill con+lict0 =nvironmental policies-

harm+ul pro,uct sales ;tobacco an, pornography


5/32


Sin in,ustries are sectors o+ the economy that market pro,ucts ,eeme, to be

harm+ul to the general public- such as tobacco an, alcohol

2n a,,itional strategy is to accept that sharehol,ers are part o+ the public interest

but to ,i++erentiate the ,i++erences bet*een common sharehol,ers an, pre+erre,

sharehol,ers 9ost o+ the public *oul, be common sharehol,ers (hese arepeople *ho have investe, in corporations +or the purpose o+ +inancial gain but ,o

not have access to change corporate policies or manage the lea,ership o+

corporations

(he negation might also *ant to look at various i,eas o+ utopia- peace- an,

others Striving +or i,eals coul, bene+it society as a *hole *hile re.uiring the

limitation o+ corporate po*er 2lthough you coul, argue +or the i,ea o+ 9ar?ism-

be*are o+ ho* you a,,ress this topic Some 8u,ges *oul, be accepting *hile

others re8ect the i,ea in its entirety


6/32


2++ Case


7/32


AC!alue"In this ,ebate *e must value reality over conceptions I *ill sho* that the

a++irmative si,e o+ this resolution is obtainable *hile the negation is not

obtainable

Criterion"In or,er +or something to be *eighe,- it must e?ist It must be consistent an,

measurable (here+ore- I the a++irmative can sho* that the i,ea o+ the public

interest is not ,e+inable- than the a++irmative si,e must *in this ,ebate


8/32


Contention "

#he standard of “public interest” can never be measured ma$ing

it impossible for corporations to comply with the public interest.

(he resolution- by inclu,ing the *or,s 1*hen the t*o con+lict6 asks us to evaluate

the correct course o+ action only *hen corporations3 actions *ill bene+it the

sharehol,ers but not the public interests an, vice versa =ssentially- the

resolution implies that public interest is measurable an, consistent (his is not

realistic It is the a++irmative3s position that public interest is an inconsistent i,ea

that *oul, bene+it one group3s public interest *hile violating another3s

Sub%point A" #he idea of a “public interest” too abstract to be

realistic

&romell ' (odg$inson) *+* , -#ony Accountant/) 0obert

12ecutive 3irector) 4CA1W/) Acting in the public interest" a

framewor$ for analysis) 4nstitute of chartered accountants in

1ngland and Wales) 0eport published *+*5

(he public interest is an abstract notion 2sserting that an action is in the public

interest involves setting onesel+ up in 8u,gment as to *hether the action or

re.uirement to change behavior *ill bene+it the public overall A a +ar greater set

o+ people than can be interacte, *ith ,irectly It involves inter+erence in people3s

ability to go about their business or sometimes- as a positive policy ,ecision-

non7inter+erence in the +ace o+ alternative actions )ther terms can be use,-

largely interchangeably =?amples inclu,e public bene+it- the public goo,- an,

the common goo, A the latter in the sense o+ the public having a common

purpose- rather than goo,s to *hich there is common access /hile *e use the public

interest throughout- the same issues apply to use o+ these other terms Invoking the public interest

re.uires 8usti+ication o+ an ability an, right to ,eci,e *hat is +or the greater goo,-

in the +ace o+ a natural suspicion that those proposing an action in the public

interest are actually acting in their o*n interests

(he public interest is an abstract notion to argue an, be able to hol, out that an

action ;or inaction< is in the public interest can re.uire consi,eration o+ a numbero+ comple? +actors an, impose a bur,en o+ proo+ Fla*s in the argument or the

outcome can reboun, upon the reputation o+ those asserting that they are acting

in the public interest- *hich *ill harm acceptance o+ +uture matters sai, to be in

the public interest 2lternative means o+ 8usti+ication may be pre+erable- *here

much o+ the public is scope, out- or can opt out


9/32


(his i,ea o+ the public interest is important to the ,ebate (he negation must

sho* that the public interest is measureable an, there+ore obtainable

Furthermore- the negation must prove *hy the public interest out*eighs a

corporation3s responsibility to its o*ners an, sharehol,ers

Sub%point &" #he idea of a “public interest” benefits only one

groups way of thin$ing and not the public as a whole

&romell ' (odg$inson) *+* , * -#ony Accountant/) 0obert

12ecutive 3irector) 4CA1W/) Acting in the public interest" a

framewor$ for analysis) 4nstitute of chartered accountants in

1ngland and Wales) 0eport published *+*5

(he *hole o+ the public must be eligible +or consi,eration in respect o+ a matter-

*hich is asserte, to be o+ public interest- by its very nature o*ever- as a

practical point- there *ill be large numbers o+ people *hose *el+are *ill not

actually be a++ecte, by the action (he relevant public *ill there+ore only be a

sub7set o+ the *hole public: those a++ecte,3 (his *ill inclu,e those *hose

*el+are *ill be a,vantage, or ,isa,vantage,- although this is not al*ays clear7

cut also- others *ith a legitimate interest- +or e?ample E)s- representative

bo,ies an, others *ith a man,ate to speak on behal+ o+ people *ho are a++ecte, /ithin the relevant public there *ill also be ,egrees o+ impact- *hich may be relevant in ,etermining ho* to *eight vie*s

(he relevant public *ill not inclu,e those *hose interest merely lies in +in,ingsomething interesting (hat is a ,i++erent meaning o+ interest altogether

aving ,etermine, *ho comprises the relevant public- the proponent o+ the public interest action3s

+irst consi,eration in ,etermining *hat is in their interest shoul, be *hat their

*ants are an, *hether the action is consistent *ith those In some

circumstances +un,amental values may be the starting point but popular opinion

must be relevant o*ever- ,etermination o+ opinion is not easy First- by its

nature- the relevant public in a public interest matter *ill be broa,ly base,

Secon,- *hat people *ant is complicate,: it usually revolves aroun, happiness-

*hich is a sub8ective notion built aroun, a *hole series o+ +actors that o+ten

con+lict *ith each other- those o+ other people an, those o+ other cultures /antsthere+ore ten, to con+lict (hir,- interests can coinci,e *ith those o+ others an,

interest groups *ill be create, Inevitably some *ill have a public interest

perspective an, some not Some are more articulate or other*ise better at

making themselves hear, than others an, e?presse, opinion *ill not necessarily

be the same as actual opinion


10/32


(he negation in this ,ebate must sho* that public interest is truly the interest o+

the public as a *hole I+ any 1public interest6 overlooks a minority- in any*ay- one

cannot make the claim that it is in the interest o+ the public as a *hole

In the *or,s o+ ohn Ste*art 9ill- 1I+ all mankin, minus one- *ere o+ one opinion-

an, only on person *ere o+ the contrary opinion- mankin, *oul, be no more 8usti+ie, in silencing that one person- than heG*oul, be 8usti+ie, in silencing

mankin,6

Sub%point C" #he idea of “public interest” cannot be a decision

of a small group

istory sho*s us that groups o+ten hi,e behin, the i,ea o+ 1public interest6 to

bene+it themselves at the e?pense o+ others Recently- it has been argue, that is

in the 1public interest6 to prevent same7se? couples +rom getting marrie, In the

past- the i,ea o+ the 1public interest6 has been use, to promote racism-

encourage monopolies- an, limit *orker3s rights

2 speci+ic e?ample o+ a group using the 1public interest6 to their o*n a,vantage is

the me,ia in,ustry (he me,ia claims to publish stories base, on *hat the public

nee,s to kno* (his has le, to even the most respecte, ne*s agencies to be

caught up in marketing ploys ,esigne, to make money *hile they claim to

promote the public interest

67neill) *++ -&rendan 1ditor) blogger) writer/) #he tyranny of

8the public interest7) Spi$ed) 9ublished *:*:*++) accessed

online ;:


11/32


illegal +ashion an, *hich also reveals private shenanigans A +rom 2merican

,iplomats3 ,escription o+ Him ong7il as +labby3 to the revelation that Presi,ent

icolas Sarkoy o+ France once chase, a rabbit aroun, his o++ice

(he Euar,ian3s ,e+ense o+ its o*n publication o+ illegally obtaine, private

,iscussions bet*een *ell7kno*n people in contrast to the e*s o+ the /orl,3s isinteresting Its me,ia correspon,ent states: (he *hole point about the e*s o+

the /orl,3s phone hacking is that the stories it obtaine, coul, not be sai, to have

been in the public interest- J*hereasK *e can ,emonstrate that *e are acting in

the public interest3 So it is not in the public interest to reveal *hat Prince arry

sai, in private to his girl+rien, Chelsy- but it is in the public interest to reveal *hat

Prince 2n,re* sai, in private to an 2merican ,iplomat It isn3t in the public

interest to publish stories about *hat one celeb thinks o+ another ;+at- stupi,-

>EL3krainian nurse an, that Him ong7il has a

*eight problem

It3s har, to avoi, the conclusion that the public interest3- as ,e+ine, in these

,iscussions- has very little to ,o *ith the living- breathing public (he higher

valuation given to the highbro* tittle7tattle spoute, by the /ikileaks briga,e in

contrast to the lo*bro* tittle7tattle spoute, by the e*s o+ the /orl, is really a

.uestion o+ taste- o+ pre+erence- even o+ snobbery ;our gossip is *orthier than yours3


12/32


Contention *"

4f the public interest cannot be defined) than corporations are

obligated to cater to their shareholders

Biwa) >>> -oshiro 9rofessor of economics) niversity of

#o$yo/) Corporate social responsibility" dangerous and harmful)

though maybe not irrelevant) Cornell Daw 0eview) !ol. E)

Number =) pp. **;%*=5

(he vie* has been gaining *i,esprea, acceptance that corporate o++icials an,

labor lea,ers have a 5social responsibility5 that goes beyon, serving the interest

o+ their stockhol,ers or their members (his vie* sho*s a +un,amental

misconception o+ the character an, nature o+ a +ree economy In such an

economy- there is one an, only one social responsibility o+ business7to use its

resources an, engage in activities ,esigne, to increase its pro+its so long as it

stays *ithin the rules o+ the game- *hich is to say- engages in open an, +ree

competition- *ithout ,eception or +rau, It is the responsibility o+ the rest o+ us

to establish a +rame*ork o+ la* such that an in,ivi,ual in pursuing his o*n

interest is- to .uote 2,am Smith- again- 5le, by an invisible han, to promote an en,

*hich *as no part o+ his intention or is it al*ays the *orse +or the society that it

*as no part o+ it By pursuing his o*n interest- he +re.uently promotes that o+ the

society more e++ectually than *hen he really inten,s to promote it I have never

kno*n much goo, ,one by those *ho a++ecte, to tra,e +or the public goo,54

I+ businessmen ,o have a social responsibility other than making ma?imumpro+its +or stockhol,ers- ho* are they to kno* *hat it is0 Can sel+7selecte,

private in,ivi,uals ,eci,e *hat the social interest is0 Can they ,eci,e ho* great

a bur,en they are 8usti+ie, in placing on themselves or their stockhol,ers to serve

that social interest0 Is it tolerable that these public +unctions o+ ta?ation- e?pen,iture- an, control be e?ercise,by the people *ho happen at the moment to be in charge o+ particular enterprises- chosen +or those posts by strictly

private groups0

Corporations e?ist to bene+it their sharehol,ers (hey e?ist to make money an,

to gro* the economy Corporations also un,erstan, that they nee, to be

responsive to the public ot the public interest- *hich the a++irmation has sho*n

,oes not e?ist in reality- but to the ,esires o+ their customers (he +ree market is

base, on this i,ea Corporations kno* that i+ they overlook the ,esires o+ thepublic- this *ill negate their obligation to their sharehol,ers (here+ore-

corporations shoul, have the ability to monitor themselves as long as they are

*ithin legal parameters set by +air an, legitimate governments


13/32


eg Case


14/32


NCCorporations3 ,rive +or pro+it an, e?pansion bene+it only a small group o+

in,ivi,uals o+ten at the e?pense o+ *hat3s best +or society 9any corporations are

*illing to overlook the ,irect harms o+ their pro,ucts +or the bene+it o+ their

sharehol,ers

It is +or this reason that I must negate the resolution- 1Corporations ought to value

their responsibility to sharehol,ers over the public interest *hen the t*o con+lict6

(his resolution is asking us to evaluate *hat is o+ more importance *hen ,oing

*hat is best +or society may harm corporate pro+its (his resolution re.uires us

to +in, *hich si,e is going to pro,uce the most sensible outcome *hen the t*o

options con+lict It is the negations stance that the community as a *hole is

better than a limite, group o+ investors

De+initions9ublic 4nterest 77 /el+are o+ the general public ;in contrast to the sel+ish interest

o+ a person- group- or +irm< in *hich the *hole society has a stake an, *hich

*arrants recognition- promotion- an, protection by the government an, its

agencies Despite the vagueness o+ the term- public interest is claime, generally by governments in matters o+ state secrecy an,

con+i,entiality It is appro?imate, by comparing e?pecte, gains an, potential costs or

losses associate, *ith a ,ecision- policy- program- or pro8ect ;Business

Dictionary com<

Shareholder 77 2ny person- company or other institution that o*ns at least one

share o+ a company3s stock Sharehol,ers are a company4s o*ners (hey havethe potential to pro+it i+ the company ,oes *ell- but that comes *ith the potential

to lose i+ the company ,oes poorly 2 sharehol,er may also be re+erre, to as a

5stockhol,er5 ;Investope,iacom<

6bservation (his resolution a,,resses only *hen sharehol,er interest an, the public interest

,irectly con+lict /e must not +ocus on limiting sharehol,er interest unless it

,irectly lea,s to harm +or society

!alue/e must look to the value of societal welfare in or,er to ,eci,e *hich option is

better

Business Dictionary ,e+ines society *el+are as 1(he *ell7being o+ the entire

society Social *el+are is not the same as stan,ar, o+ living but is more

concerne, *ith the .uality o+ li+e that inclu,es +actors such as the .uality o+

http://www.businessdictionary.com/definition/standard-of-living.htmlhttp://www.businessdictionary.com/definition/quality-of-life.htmlhttp://www.businessdictionary.com/definition/factor.htmlhttp://www.businessdictionary.com/definition/quality.htmlhttp://www.businessdictionary.com/definition/standard-of-living.htmlhttp://www.businessdictionary.com/definition/quality-of-life.htmlhttp://www.businessdictionary.com/definition/factor.htmlhttp://www.businessdictionary.com/definition/quality.html


15/32


the environment ;air- soil- *ater


16/32


Contention

#obacco use around the world has a negative affect on societal

welfare

Sub%point A" #obacco use causes numerous health conditionswhich hurts societal welfare

World (ealth 6rganiFation) *+= -#obacco" Gact Sheet No. HH>)

pdated


17/32


Sub%point &" #obacco use promotes poverty hurting societal

welfare

Iohn) *+ -0iJo) 9rofessor , 4ndia 4nstitute of #echnology/)

County = million more poor in 4ndia) than$s to tobacco)#obacco Control) !ol. *+) No. =) pp. *> , H=*5

Stu,ying the impact o+ tobacco use on poverty is important because the economic per+ormance o+ many L9ICs is measure, by their progress to*ar,s poverty

alleviation In a,,ition- poverty re,uction is one o+ the 9illennium Development Eoals ;9DE< set out by the >nite, ations Research has ,emonstrate, the link

bet*een poverty an, tobacco use- but most o+ the stu,ies ,o not .uanti+y the impact /e attempt to ,o so using ,ata +rom In,ia- a lo*7income country *here #&N

o+ the *orl,4s tobacco smokers live- the secon, largest group o+ smokers in the *orl, a+ter China (his is the +irst stu,y that enumerates ho* many people are ,e

+acto belo* the poverty line in In,ia as a result o+ tobacco consumption It is o+ signi+icant political an, social interest to count correctly the actual number o+ people

living in poverty as even small changes in poverty rates capture the hea,lines an, the attention o+ many policymakers (obacco use

contributes to poverty in several *ays First- since poor househol,s typically

,evote a large share o+ their income to +oo,- spen,ing on tobacco o+ten takes

a*ay resources that *oul, other*ise be available +or +oo,- making the ,i++erencebet*een an a,e.uate ,iet an, malnutrition 2 stu,y in Bangla,esh sho*e, that a

typical poor smoker coul, purchase +oo, *orth at least '&& a,,itional calories

every ,ay i+ he"she ,i, not purchase tobacco I+ the money spent on tobacco

*ere ,irecte, to*ar,s +oo,- about #&' million people in Bangla,esh *oul, have

an a,e.uate ,iet instea, o+ being malnourishe, 2part +rom +oo,- tobacco

e?pen,iture re,uces consumption o+ other important goo,s an, services Stu,ies

+rom China an, In,ia have sho*n - +or e?ample- that spen,ing on tobacco re,uces

investment in e,ucation- thus +urther perpetuating the cycle o+ poverty


18/32


Contention *

#obacco companies overloo$ the public interest

Sub%point A" #obacco companies7 push for mar$et e2pansion

overloo$s the public interest

Kilmore) *+= -Anna) 9rofessor) niversity of &ath) 12posing

and addressing tobacco industry conduct in low%income and

middle%income countries) #he Dancet) !ol. HE=) 4ssue >>;*5

(he tobacco in,ustry3s +uture ,epen,s on increasing tobacco use in lo*7income

an, mi,,le7income countries ;L9ICs


19/32


tobacco in,ustry e?ploits these vulnerabilities *ith icy ,etermination (he

resulting carnage beggars belie+: the /orl, ealth )rganiation estimates that

the ,eath toll *ill reach eight million a year by %&& (his +ilm e?poses the cynical marketinguse, to pull young an, vulnerable people into tobacco3s ,ea,ly trap

(he tricks *e in the ,evelope, *orl, thought ha, been legislate, a*ayQ

celebrity en,orsement- sport an, music sponsorship- pro,uct placement- +reesamples- 8uvenile +lavorings- novelty- an, glitQare- 9oreira sho*s- still being

enthusiastically use, in ,eveloping countries (hus in In,onesia- sponsore, an,

heavily bran,e, tours by /estern rock ban,s are a +avore, promotional

techni.ue- as are +ree concerts by local artists

J2n email *as sent to oneK multinational tobacco company to ask it to e?plain

such ,isregar, +or its o*n marketing co,e Its response *as- 1It is not possible

because the competition is too +ierce6 Business is business count the cash- not

the ca,avers 2n, i+ 8ournalists come sni++ing aroun,- stone*all them- call your la*yers- an, e8ect them +rom yourpremises Big tobacco- as 9oreira pain+ully ,iscovere,- also employs big bouncers

(he secon, innovation presumably re+lects pain+ul lessons learnt +rom past

e?poss (*o ,eca,es o+ embarrassing courtroom ,isclosures an, revelations

by +ormer employees have sho*n the ,angers o+ paper trails o* tobacco

companies tightly control communication *ith the me,ia- as 9oreira +oun, out 2n,- the

insi,er e?plains- they are also systematically ,estroying ,ocuments be+ore

anyone even thinks o+ having them subpoenae,

J(heseK courageous revelations are timely because tobacco multinationals are

currently on a charm o++ensive >sing the mantle o+ harm re,uction an, the

opportunity o+ electronic cigarettes- they hope to make a return to the respectablebusiness community an, even buil, collaborations *ith public health In their o*n

*or,s- they see an opportunity to move +rom 1curse to cure6

(hey envisage a legitimie, market in recreational nicotine that they *ill populate

*ith pro,ucts o+ varying haar,- +rom the highly to?ic tobacco cigarette to

unteste, but probably much less ,angerous alternative nicotine ,elivery ,evices-

inclu,ing e7cigarettes British 2merican (obacco- Lorillar,- an, Philip 9orris have

all ma,e massive e7cigarette ac.uisitions in recent months )++erings *ith a

range o+ risk can then be use, to ,elegate the responsibility +or harm ,one to

1consumer choice6 2 ,isingenuous ,e+ense is probably alrea,y being ,ra+te, bycorporate la*yers: *e are o++ering sa+er alternatives- ,oing our best to re,uce

harm- an, *e can3t be blame, i+ the consumer insists on opting +or the more

,angerous pro,uct But choice becomes )r*ellian in the teeth o+ a,,iction- an,

marketing e,its any resi,ual sel+7,etermination

/e have to remember that this is business it is about pro+it not public health

ot*ithstan,ing their multimillion7,ollar buy7in to e7cigarettes- the companies


20/32


continue to make N o+ their money +rom tobacco =7cigarettes *ill there+ore be

use, to protect this core business there is no money to be ma,e cannibaliing

e?isting sales or un,ermining establishe, bran,s

Pre,ictably- then- the tobacco in,ustry3s move into e7cigarettes has seen an

e?ponential increase in promotional spen,- an, these born again campaignshave an uncanny +amiliarityQthe celebrity en,orsement- sport an, music

sponsorship- pro,uct placement- +ree samples- 8uvenile +lavorings- novelty- an,

glit are all back It3s as i+ *e ha, returne, to the #!&s an, the hey,ay o+

tobacco a,vertisingQor live, in 2sia to,ay 2n, so the three core truths o+ the

tobacco pan,emic- so neatly un,erline, by this +ilm- reassert themselves: get

them young- keep them a,,icte,- an, ignore the collateral

Sub%point C" 1%Cigarettes are not a safe alternative

/hile some look to e7cigarettes- pushe, by tobacco companies- as a harmlessalternative to smoking- e7cigarettes are still contain massive amounts o+ nicotine

icotine is a,,ictive an, has no positive bene+its +rom human consumption In

+act- the a,,ictive nature o+ nicotine lea,s people to become ,epen,ent on its

usage

=?perts are still trying to ,etermine the sa+ety o+ e7cigarettes /hile they may not

be as harm+ul as tra,itional metho,s o+ nicotine ,elivery- it is almost certain that

there are negative health conse.uences +rom their use

(he +act that e7cigarettes an, other vaping systems are being use, by large

numbers o+ teen agers in,icates that tobacco companies are not *illing to give

up the +ight to create generations o+ people a,,icte, to their pro,uct


21/32


Contention H

6ther industries harm the public interest to satisfy share holders

(obacco companies are not the only in,ustry *hose pro,ucts are ,etrimental to

societal *el+are )ther in,ustries *illingly sell their pro,ucts kno*ing that they

cause ,irect harm to their consumers (hese harms *orsen society an, limit

human potential

(he gambling in,ustry:

Ciment) *++< -Iames) Author/) Social issues in America" an

encyclopedia) B.1. Sharpe) Armon$) N) *++


22/32


In,ustries promoting alcohol use- pornography- violence- the over consumption o+

prescription ,rugs- an, ,estruction o+ the environmental resources are 8ust a +e*

more *hich *e can look to (hese companies3 ,esire to increase pro+its an,

satis+y their share hol,ers harm the public interest

(here+ore- the negation has sho*n that corporations *ho place their sharehol,ers above the public interest harms society an, ,o little more than create

harms +or the general public


23/32


Aff Cards

Corporations do not have the ability to decide what is moral

Bansell) *+H -Samuel 9h.3.) 3ean%St. Andrew7s niversity/)

Shareholder theory and Lant7s 83uty of beneficence7) Iournal of

&usiness 1thics) !ol. ;) 4ssue H) pp. =EH%=>>5

2ccor,ing to Frie,man- there is no such thing as corporate3 social responsibility- because

as the +ree choice o+ the in,ivi,ual is at the basis o+ his moral principles only

in,ivi,uals can be sai, to have moral responsibilities ;ibi,


24/32


stoc$holders) Iournal of &usiness 1thics) !ol. =) No. =) pp. HE=%

H>+5

(he most obvious an, seemingly most signi+icant right that common stockhol,ers

have is their right- as o*ners o+ the corporation- to vote their shares in response

to items or resolutions up +or consi,eration on the agen,a o+ the annualstockhol,er4s meeting Putting asi,e the limitations inherent in the con,itions un,er *hich pro?y resolutionscan be inclu,e, on an, retaine, +or consecutive years in the agen,a +or the stockhol,ers meeting- it is important to

e?amine this right to vote in regar, to its actual an, potential impact on the management o+ the corporation

(he +un,amental .uestion- o+ course- is *hether or not this right carries *ith it

any signi+icant po*er or capacity to e++ect change o*ever- in or,er to ,iscuss the

issue as to *hether sharehol,ers can have their *ill +elt by the corporation an,

thereby e++ect change- it is necessary to ,istinguish bet*een large an, small

stockhol,ers It becomes clear .uickly that this is a ,istinction in practice tantamount to one bet*een signi+icant an,generally insigni+icant sharehol,ers

(he large stockhol,ers are most o+ten- +or e?ample- pension +un,s- mutual +un,s-insurance companies- +oun,ations an, charitable institutions (hese

sharehol,ers ten, to vote *ith management- i+ they vote their shares at all In the

case o+ an e?traor,inary or very serious con+lict o+ interests bet*een such a

ma8or stockhol,er an, the corporation- this sort o+ sharehol,er *ill 8ust ,ivest

itsel+ o+ its stock an, invest else*here

(he point here is that unless there occurs the mass selling o+ stock by common

sharehol,ers- necessarily inclu,ing these ma8or or large stock hol,ers - ;such that- +or

e?ample- there *oul, be a ,ramatic or remarkable ,ecline in stock prices


25/32


;pro+it- the environment- community< an, corporate social responsibility have

ampli+ie, these i,eas

Pensioners- present an, +uture- are among these claimants in both sharehol,er

an, stakehol,er mo,els (he scan,als o+ %& an, +ollo*ing o+ =nron- /orl,

Com- et al- reveale, the vulnerability o+ pension claims to managerial strategies9anagers are able to solve the short term cash +lo* ,eman,s on the +irm by

lo*ering contributions to the pension +un,s- in terms o+ actual cash or by

changing assumptions about rates o+ return an, claims Declaring bankruptcy

allo*s the +irm to shi+t obligations on to the Pension Bene+it Euaranty

Corporation ;PBEC


26/32


FF2- un,er =, De9arco- has acte, as a 1closet li.ui,ator6 o+ the ES=s- e++ectively acting

to *in, ,o*n the companies (his e?plicitly contra,icts the legal man,ate o+ the

conservatorship Fannie an, Fre,,ie A an, their sharehol,ers A are being treate, un+airly

(he +e,eral government A the (reasury- FF2- an, Congress A e?ploite, an,

ignore, the ES=s3 sharehol,ers *ith ombie stock- an, stuck them in +inanciallimbo (he ES=s *ere re.uire, to pay above7market #& percent ,ivi,en,s on

(reasury3s investment- *hile many o+ the /all Street banks that *ere baile, out

*ith (2RP money *ere re.uire, to pay ,ivi,en,s hal+ o+ that rate (he

sharehol,ers o+ their baile, out banks *ere preserve, an, given a chance to

recover

(he FF2 or,ere, the Fannie an, Fre,,ie boar,s an, e?ecutives to suspen,

communications *ith sharehol,ers an, abolish annual sharehol,er meetings 2n,

+inally- a,,ing insult to in8ury- in %& the FF2 arbitrarily ,irecte, Fannie an, Fre,,ie to

initiate the ,elisting o+ their common an, pre+erre, stock +rom the S= (his

+urther ,egra,e, sharehol,er value an, chase, a*ay many institutional investors

In %%- as Fannie 9ae an, Fre,,ie 9ac *ere returning to pro+itability ,espite

+inancial an, operating restrictions on their activities- the >S (reasury change,

the terms o+ its investment in the ES=s to its o*n bene+it (he (reasury replace, the alrea,y *ell7above7market #& percent ,ivi,en,s that the ES=s *ere paying to a 1s*eep6 o+ all o+ the pro+its o+ the companies

In times *hen the ES=s *ere +acing mounting losses- the #& percent ,ivi,en,s *ere bur,ening the ES=s *ith ,ebt-

+orcing them to borro* +rom (reasury in or,er to turn aroun, an, pay that borro*e, money right back to (reasury- thus

compoun,ing their ,ebt an, in+lating +uture ,ivi,en, payments o*ever- no* that the JFannie an,

Fre,,ieK have returne, to pro+itability- this arrangement has the potential to ,o

great harm (he JcompaniesK are no* sen,ing nearly all o+ their earnings to

(reasury- can3t rebuil, their capital- an, their sharehol,ers remain in a limbo*here they are neither eliminate, nor given an opportunity to recover I+ the

enterprises *ere ,oing *ell enough to pay the government a #& N return on the

senior pre+erre, stock- *hy coul,n3t they also pay ,ivi,en,s on the common

stock an, 8unior pre+erre, stock0


27/32


Neg Cards#he “invisible hand” is not strong enough to guide corporations

to moral actions

!isser) *++ -Wayne 9h.3) Author/) 9ublic 4nterest) #he A to M of

corporate social responsibility) Iohn Wiley ' Sons Dtd)

(obo$en) NI5

Corporate social responsibility ;CSR< is o+ten conceive, as the *ay in *hich

business ,emonstrates that it is operating in the public interest- or the common

goo,3 (his is a shi+t +rom 2,am Smith4s original proposition that the invisible

han,3 o+ the +ree market automatically ensures that companies operate in the

public interest Subse.uently- critics o+ the +ree market i,eology have argue,

that- in the case o+ public goo,s ;like clean air- *ater an, a healthy environment5

=ven a .uick glance at any serious ne*spaper to,ay *ill inevitably sho* ho*

economics has reache, the status o+ a political +act- o+ a ma8or political +act in realityPartisan political programs have essentially become economic programs- an,

economic variables such as interest rates- oil prices- or unemployment have

thereby become ma8or global political issues In an age in *hich ,emocracy

seems to have become the ,e+ault political regime in almost every corner o+ the

planet- one *oul, e?pect economics to have accompanie, this ,ri+t- to have

intro,uce, ,emocratic logic into its process o+ ,ecision making >n+ortunately this ,oes not


28/32


seem to be the case =conomics has- on the contrary- ,ecisively contribute, to the

pro,uction o+ a 8usti+icatory i,eology accor,ing to *hich - in the suppose, interest o+ all-

economic ,ecisions ,epen, on calculation rather than on ,eliberation (he

political system resulting +rom this vision seems- there+ore- to be increasingly ma,e

o+ imperatives in,epen,ent o+ that collective political *ill that supports citienship

2s *e *ill see- in mainstream economics there is only one best solution +or eacheconomic problem an, thus the purpose o+ policy consists in +in,ing out that

solution an, not in con+ronting collective pre+erences - in other *or,s in engaging in political

,ebate In the realm o+ politics trans+orme, into economics- pluralism is- there+ore-

cro*,e, out in other *or,s there is no alternative as +ormer British Prime 9inister 9argaret(hatcher once state,

(his ,isregar, o+ economics +or ,emocracy is not the outcome o+ economics

having someho* been hi8acke, by ,ubious personal interests- in other *or,s ,oing the

right economics *rongly-but o+ simply +ollo*ing its logic- that is to say o+ ,oing the *rong

economics rightly ;see Branco an, enri.ues %&


29/32


stan,ar,s o+ their homelan, (hey o+ten re+er to the +un,amental ,i++erences- *hich

make all 8u,gments +rom an e?ternal perspective besi,e the point 2s a

conse.uence- they are mostly convince, by or even resigne, to a ,eeply

relativist vision 2,mitte,ly- some business people or stu,ents mention also that- in principle-

some basic human rights shoul, be respecte, every*here- but they mostly +eel

at the same time that one shoul, not impose so calle, universal principlesagainst prevailing local opinions an, that ultimately *e cannot prove that *e got

it right33 (o conclu,e- moral universalism- ie- the i,ea that moral principles- values- ,uties- an,

virtues are vali, an, applicable universally- ,oes not seem to be +ashionable - either among managers oramong stu,ents

But- even *orse is the +act that people o+ten raise ob8ections against universal

values an, virtues (*o o+ them- o+ a rather ,i++erent nature- o+ten crop up First- moral universalism

an, even human rights are o+ten ,ismisse, as mani+estations o+ =urocentrism-

/estern arrogance- or cultural imperialism =uropean business people ,o not

like to be ,escribe, as neocolonialists-33 an, it seems to be part o+ political

correctness not to 8u,ge other cultures

#he invisible hand does not always drive what is best for society

Gran$) *++E -0obert 1conomist) 9h.3./) #he invisible hand is

sha$ing) #he New or$ #imes) 1conomic !iew) 9ublished

=:*=:*++E5

2,am Smith3s mo,ern ,isciples are +ar more enthusiastic about his celebrate,invisible7han, i,ea than he ever *as In their account- Smith3s assertion *as that

purely sel+ish in,ivi,uals are le, by an invisible han, to pro,uce the greatest

goo, +or all et Smith himsel+ *as un,er no such illusion

)n the contrary- the relevant .uotation +rom his 1/ealth o+ ations-6 *hich

,escribes a pro+it7seeking business o*ner- is +ar more circumspect It says that

this o*ner 1is in this- as in many other cases- le, by an invisible han, to promote

an en, *hich *as no part o+ his intention6 It continues: 1or is it al*ays the *orse +or

the society that it *as no part o+ it By pursuing his o*n interest he +re.uently

promotes that o+ the society more e++ectually than *hen he really inten,s to

promote it6

In short- Smith un,erstoo, that the invisible han, is o+ten benign- but not al*ays

(his un,erstan,ing has important implications +or economic policy in general - an,+or the recent presi,ential campaign ,ust7up about gasoline ta?es in particular

I+ you believe- *ith Smith3s mo,ern ,isciples- that un+ettere, pursuit o+ sel+7interest al*ays

promotes society3s interests- you probably vie* all ta?es as a regrettable evil Q


30/32


necessary to pay +or roa,s an, national security- but also an un*elcome ,rag on

economic e++iciency (he problem- accor,ing to this vie*- is that ta?es ,istort the

price signals through *hich the invisible han, gui,es resources to their best

,estinations

Smith3s more nuance, position supports a ,i++erent vie* o+ ta?es /hen marketprices convey accurate signals o+ cost an, value- the invisible han, promotes the

common goo, But prices o+ten ,iverge +rom cost an, value an,- in those cases-

ta?es can actually help steer resources to*ar, more highly value, uses

Shareholder benefits are not the primary concern for

corporations

Stout) *+H -Dynn 9rofessor of Daw/) #he to2ic side effects ofshareholder primacy) niversity of 9ennsylvania Daw 0eview)

!ol.


31/32


time to increase employee salaries and benefits) treat suppliers more

generously - retain earnings to give cre,itors a larger 1e.uity cushion-6 or ,ecline

to pursue aggressive ta?7avoi,ance strategies


32/32


Additional 0esources

#< arvar, Business Revie* A 1/hat Eoo, are Sharehol,ers06https:""hbrorg"%%"&!"*hat7goo,7are7sharehol,ers

%< In the Public Interesthttp:""***inthepublicinterestorg"0everythingTeverything

< Public Interest (heoryhttp:""***ne**orl,encyclope,iaorg"entry"2rthurUCecilUPigou

O< 2 Short istory o+ Corporationshttp:""ne*intorg"+eatures"%&&%"&!"&'"history"

'< Corporations an, the Public Interest: Eui,ing the Invisible an,Book publishe, by Berrett7Hoehler Publishers ;February #- %&&'<

$< (he Fun,amental Rights o+ the Sharehol,er http:""la*revie*la*uc,avise,u"issues"O&"%"articles"DavisVolO&o%UVela

scop,+

!< /hat is Public Interest La*0http:""***la*harvar,e,u"current"careers"opia"public7interest7

la*"in,e?html

M< Do Corporations ave Social Responsibilities0http:""+eeorg"+reeman",etail",o7corporations7have7social7responsibilities

< (he First Rule o+ Corporate Social Responsibility Is ot /hat ou (hinkhttp:""***ssirevie*org"blog"entry"theU+irstUruleUo+UcorporateUsocialUres

ponsibilityUisUnotU*hatUyouUthink

#&

BFI 2015 LD Corporate Responsibility

Documents