In attempting to get to the heart of what makes an economy tick, economists notoriously overlook the political and social ramifications of market-oriented growth and development.
Why would anyone oppose jobs and prosperity? Who could possibly be against the freedom to choose how to make one’s living? While there are plenty of contradictory voices screaming back, both advocates and adversaries of market-oriented growth and development tend to downplay the full spectrum of political and social ramifications associated with a thriving private sector. Cultures may change, families may be uprooted, and communities may be overrun – yet all the same can happen to authoritarianism, political marginalization, and gender-based hierarchy.
As one example, South African author Ann Bernstein tells of how supermarkets were among the first places where blacks and whites in South Africa were treated as equals, inspiring at least one eventual Black civil society leader to wonder why her government couldn’t do the same. The ultimate reason why businesses usually do treat everyone the same, as Bernstein explains, is that when forced to compete a business that loses customers due to racial antipathy is a losing business.
In The Case for Business in Developing Economies (available from Penguin Books), Bernstein makes the case that the problem isn’t that businesses in developing countries are unethical, it’s that there are too few of them. She coins the term ‘invisible corporate citizenship’ to capture the intangible social and political consequences of having a competitive business environment with as many businesses as possible.
Bernstein is the executive director of the Centre for Development and Enterprise, a South African think-tank that the Financial Times hailed as the “leading policy centre for social and economic development [in South Africa].” The Financial Times‘ Martin Wolf hails Bernstein’s book as, “A new agenda for the role of business in development…[and] a call to arms.”
The book’s emphasis on the role that South African businesses played in taking down Apartheid may ruffle some feathers, as will her fiery critique of prevailing notions of corporate social responsibility and the idea of a ‘global civil society’. Based on the book, CIPE’s latest Economic Reform Feature Service article provides a preview of the heart of Bernstein’s argument about the positive social and political ramifications of a competitive business environment.
Article-at-a-glance:
- Despite the key role of private enterprise in generating growth and development, companies are often unfairly painted as social outlaws who need fundamentally to change their ways.
- The increasingly flawed, unbalanced conversation about business and society has negative consequences and potentially very damaging impact on the development prospects of many countries.
- Instead of remaining on the defensive, corporations, business leaders, and business organizations should vigorously promote market economies and the role of companies as essential and powerful instruments of progress, innovation, and development.
Published Date: February 01, 2011