One of my favorite pieces on corporate social responsibility is Henry Manne's debate with Henry Wallich, published in 1972. Manne is his usual combative and insightful self, and his portion of the debate is full of little nuggets. In re-reading the debate, I was surprised to see a reference to Schumpeter:

The late Joseph Schumpeter argued, in his Capitalism, Socialism and Democracy, that as corporations grew and became bureaucratized, business executives would cease to think and act like entrepreneurs and would, therefore, cease to defend capitalism. Schumpeter may have been correct for the wrong reason. Contrary to his view, businessmen still behave precisely as the utility maximizers classical economic theory described. But today's maximizing behavior includes advocating the non-maximization of profits. So, it is true that businessmen have largely ceased to defend business, but only because that was the businesslike thing to do.

Lisa has posted several times about the "rhetoric of social responsibility." According to Manne, such rhetoric is an attempt to gain PR points by "promising something for nothing." This seems the very definition of cheap talk.

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