Daniel Parecki

My biggest problem with capitalism is when people and companies produce work with the sole incentive of making a profit.  Profits are inherently good, people should be paid for their work and people should be able to produce excess wealth.  Excess wealth leads to development and innovation and causes everyone to be better off.  But like i said in my earlier post, profits should not be made at the expense of a company’s product, employees, their customers.  A wonderfully awful example is the case of health insurance companies who continue to deny care for the sake of their bottom line.  Yes, they should be working to provide people with health care but they should also be paid for the work they do.  The problem is that they sacrifice the quality of their product (paying for people’s health care) for their profit.  It is for this reason that I recommend creating the Social Responsibility Index so that we can more easily choose companies that deliver quality goods with little negative impact on people or the environment.

Contrary to what some people think, capitalism is not based on self-interest.  Economic theory states that market interactions are mutually beneficial.  Self-interested individuals maximize their profit at the expense of their employees, customers, product, and the environment.  Self-interest leads people to attempt to cut the best deal they can with no regard to the other party’s interest. A strong, long-term business partnership arises when both parties are equally satisfied with the deal.  A healthy economy arises through mutually beneficial interactions. Capitalism can provide prosperity to the world if people do not pursue their own interests at the expense of the interests of other people.

Corporations historically have misused and mistreated their employees and the environment for the sake of the bottom line. Businesses like Walmart work hard to sell their products at the cheapest price possible. The consumer has to make a choice: which brand of practically identical products should I buy? Do you buy organic or regular produce? Do you eat out at McMinneman’s or the Old Spaghetti Factory? Do you buy Levi’s or Arizona jeans? If it is in your financial capabilities, you may prefer to purchase from the company that has the most ethical business practices. Unfortunately, it is often difficult to know which company is better than others.  Imagine an app on your Droid: you enter in a brand name, and it gives you back a number on a scale of 1 to 10 that reflects the company’s level of social responsibility.

For this purpose I propose the invention of the Corporate Social Responsibility Index. It is a measure of the effects businesses have on the lives of its workers, the environment, and people around the world. The index is comprised of the following:

Employee treatment:

• Wages
• Job retention (how rapidly do they lay off employees)
• job mobility
• redundancy of task
• employee benefits

Environment:

• Use of green energy
• Level of air and water pollution
• Deforestation (for businesses like McDonalds
• Organic practices (for food production companies)

Quality of product (consumer satisfaction):

• Life expectancy of product
• Built-in flaws
• Nutritional value (for food products)

Trade Policy:

• Fair-trade certified
• Purchasing goods from sweatshops

If all businesses could follow these practices and still make a profit, then we might have a healthier economy and a healthier world.