Friday, March 24, 2006


In Monty Python's classic "Hungarian Phrasebook" sketch, a Hungarian tourist walks into a British tobacconist's shop, and, consulting a faulty phrasebook, tells the clerk, "I will not buy this record, it is scratched." The clerk, looking confused, responds, "Uh, no, no, no. This is a tobacconist's," and says "cigarettes" as he holds up a pack. "Ya! See-ga-rets! Ya!" responds the Hungarian customer. "My hovercraft is full of eels." What does this have to do with anything? Quite simply, the debate over corporate social responsibility (CSR) has come to resemble this exchange. The rhetorical battle has been joined, but the two sides just can't seem to agree on what they're fighting over. In fact, they keep talking past each other.

My organization has made the case against the CSR doctrine repeatedly (see here and here). We have sought to engage CSR's advocates. But, unfortunately, we often seem to be speaking different tongues. (A recent Reason magazine debate on CSR between Whole Foods CEO, John Mackey; Economics Nobel Laureate, Milton Friedman; and Cypress Semiconductor CEO, T.J. Rodgers brought no one closer to agreement.)

This confusion centers on the crucial question: What exactly constitutes a corporation's "social responsibility"? That question hovered around a recent conference on CSR, "Is Corporate Social Responsibility Serious Business," hosted by the American Enterprise Institute. Many of the presentations were insightful and informative, others less so; the discussions were lively; but in the end, there was no more agreement on that question.

Defining Responsibility

Professor Elaine Sternberg of Tulane University made a solid case against CSR. She argued that, by giving a hazily defined class of "stakeholders" a say over corporate decisions, "CSR would deprive owners of their property rights." She noted that, "Business ethics is about conducting business ethically," [emphasis added] not about pursuing goals extraneous to the company's mission. And, because business ethics derives from the very nature of business, owner value is enhanced over the long term by ethical business behavior.

Prof. David Vogel of the University of California, Berkeley, countered that "responsible" firms - as so defined by CSR advocates - do not perform any worse than do firms that ignore the CSR paradigm. The overall impact of "responsibility" on profitability is marginal, he argued, because the resources that corporations can devote to such activity are modest, due to the requirements imposed by the need to improve shareholder value.

Arguing over the effects of CSR on company performance hardly seems like a clash of worldviews. But it's when we get to the question of whether companies should adopt CSR that the disagreement chasm widens. For what should corporations be responsible? Even accepting corporate responsibility for certain problems, which problems are legitimate to begin with?

Vogel and some subsequent panelists emphasized the need for corporate America to tackle the alleged problem of climate change, a position that presupposes certain conclusions that are far from settled. He said that, while useful in helping tackle some social problems, "There are some cases in which CSR is simply a band aid." In such cases, government regulation becomes necessary "to change the incentives of business."

Another way to describe this strategy is for government to intentionally distort the market. And for what? The Kyoto Protocol, one such attempt to "change incentives" to address climate change, is unraveling as you read this, along with many of the scientific assumptions behind it. To argue that businesses must tackle climate change as an impending problem is specious to the point of being, well, irresponsible.

Professor Mark Cohen of Vanderbilt University said that, as globalization has increased pressures against regulation, voluntary social initiatives, in the form of CSR, have taken the place of some social welfare regulation. He also noted that CSR can bring benefits to corporations. It can enhance name recognition and can be an effective way to raise competitors' costs. Major players can leverage suppliers to raise costs for products by labeling them "socially responsible." Cohen provides McDonald's buying only certified fish as an example.

Sternberg responded by noting that neither Vogel nor Cohen defined corporate responsibility. The cases they cite, she argues, constitute an "external bolt-on" to the business, while responsibility is inherent to business in that it is reflected in "how you conduct your business every day, every time." She is right, but most CSR advocates reject this view as morally insufficient, since they view improving mankind as part of business' responsibility.

So if we can't define what constitutes "responsibility," how is this debate supposed to get anywhere? Rather than considering whether CSR is good for business or what societal problems, if any, businesses should tackle, the question that ought to be debated is: What constitutes a corporation's social responsibility?

Elaine Sternberg offered a good starting point. Some subsequent panelists who agreed with her put forth views consistent with hers. But many who did not simply talked past the problem of defining "responsibility," and put forth policy recommendations based on assumption businesses must address certain problems. Worse, the most often cited such "problem" was climate change, which, as noted, may not be a problem at all.

Good for Business?

One example of a company serious about climate change that was brought up was Enron, which strongly supported the Kyoto Protocol, and, as Sternberg noted, had "one of the most stringent" CSR codes. Vogel acknowledged that Enron was "embarrassing" to the CSR community, since the company "did have a very impressive record of social involvement" - which didn't do its employees and investors any good - though he noted, "I don't think Enron fleeced its shareholders because it was responsible, but CSR did not help, either."

Enron's pro-Kyoto Protocol position would likely be supported by most pro-CSR advocates - ignoring the fact that for Enron, Kyoto presented a golden opportunity for rent-seeking. A global mandatory carbon emissions cap-and-trade regime would have created a huge new - artificial market - in carbon permits for Enron to take advantage of. As Cohen also noted, large companies can use CSR to leverage suppliers to raise costs for competitors. So in this regard, it's good for certain businesses.

Of course, CSR advocates put forth a less cynical pitch to CEOs interested in their bottom line. Aron Cramer of the pro-CSR group Business for Social Responsibility, argued that corporations need a "social license to operate" within a community, and that CSR can help them obtain it. And how to do this? By listening to advocacy from so-called non-governmental organizations (NGOs). Cramer acknowledges that many activist NGOs are hostile to the market, and that "it doesn't make sense for companies to engage" with such groups, but says that the majority of NGOs aren't hostile to the market and that their positions are worth companies' time to take seriously.

What Should Companies Do?

But again, this all skirts the question: Should businesses be doing any of this? NGOs are not shareholders; if their goals are consistent with shareholders' interests, why do they need to ask companies to listen to them in the first place? Professor Sternberg's definition offers a good foundation for answering this question. Clive Crook of The Atlantic Monthly, whose article in The Economist, "The Good Corporation," sparked considerable debate on CSR, adds another important consideration: "Profit seeking serves the social purpose." To that I would add the corollary: By doing anything to reduce their bottom line, companies make the world poorer - and there's nothing responsible in that.


Urban Planning - we need to stop it

By Bob Smith

For weeks now, I've been attacking urban planning, the disease that has, for decades, infected our city governments. Urban planning is destroying the character of our cities and selling them to the highest bidders and/or those with the most political clout. Ironically, many of the urban planning crowd bemoan that people are fleeing to the suburbs, which are expanding into former farmland. The simple truth is that the boredom and expense of urban planning is what people are fleeing from, and no increase in planning will bring them back.

City urban planning would not exist in a libertarian society, because cities would not have the authority to interfere in private property issues. They would not have the ability to take property and give it to developers who present a grand plan for redevelopment. If a developer could convince enough people to sell their property, gradually accumulating enough space for a large development, then it would happen, but the developer would profit or lose his own money, not that of the taxpayers, and the previous owners would have voluntarily sold out at a fair price. You think there would be no more large developments? Hogwash. DisneyWorld, a mammoth development, was created under those conditions... no eminent domain... no pressure to sell. I'm sure there are local examples as well. Such a developer may have to pay a high price to get a large section of adjacent properties already being profitably used, but that assures that all existing property owners will get a fair return on their own investment.

Urban planners disparage the untidiness of UNplanned areas. They do not understand the diverse needs of people, and mistakenly believe that they can design areas that will be better than we can choose for ourselves. I've admitted that there is a little urban planner within me... I have that urge to remake everything around me to match what I believe is best. I've learned to control that urge, and to appreciate the different choices that others make. Some of my learning has been from neccessity. On a small fixed income now, I can appreciate the need for low-cost housing (not subsidized housing) as never before. Still, I have many neighbors who can afford even less than me. For them, there is NO good alternative anywhere in the cities... nothing cheaper than what I have. They can form a group of a large number of people to share an apartment or small house. Doing that is often illegal, and not very comfortable. They can try to get into subsidized housing, but their pride will take a hit even if they succeed, and it often takes years.

In a libertarian society, we would have very few building codes. Yes, that sounds shocking now, but most of America was built without them. Monticello, Thomas Jefferson's home, could never have been built under today's building codes. Jefferson designed it himself, and parts of it are creativily strange. He hated to sleep, so the spiraling stairs to upstairs bedrooms are almost impassably cramped and steep.

Planners believe that, without building codes, houses would be built with little concern for safety. There is a grain of truth in that concern. Some low-cost housing would probably be built with a little less concern for safety (by current standards), but poor people have always been willing to risk a bit more in order to have shelter. Currently, they don't have that choice, at least in urban areas.

Any architect, and a great many amateurs, could design and build safe, attractive, livable homes at far lower cost than is now available, if only zoning and building codes were eliminated. Many have tried, only to be thwarted by governments. There are many building methods that simply are not allowed in our cities, where our poorest citizens must live. Buckminster Fuller's geodesic domes were adapted decades ago into a form that could be built by an amateur, at very low cost. Blown concrete over inflatable domes is another inexpensive building method, as is pressed straw/mud construction, underground structures, and many others. See any of them around your city? No, if you want one, you have to go out in the country where zoning and building codes don't exist... where you have the freedom to build truly inexpensive and energy-efficient housing.

It isn't just low-cost housing that is harmed by zoning and building codes. Those controls cramp creativity at all levels. Every new method, or material, or building technique has to go through a battle with the controls already in place. To those who feel bound to defend the controls, there is no such thing as a better way, there is only the accepted, dictated way.

What you would see in a libertarian society is a much more diverse surrounding. I know you would see more creative, unusual homes, but perhaps not radically different-looking. Most people have traditional taste, and would probably remain that way by choice. In that libertarian society, you would see a serious proliferation of commercial businesses, many very small start-up businesses, because they would be much easier and less expensive to start without much regulation. The failure rate of small businesses would decrease, because each business wouldn't be saddled with such high taxes and regulation. With lower costs, each would require less in sales to sustain themselves, so we would have many more of them, with much more variety... and lower prices.

A large percentage of our population has a dream of leaving their boring job and opening some kind of business. Many do so, but it becomes harder every year, as government controls drive up the minimum expense and increase the amount of time, and expertise, needed to comply with regulations. The people who MOST fervently want to open their own business are those whose background and education doesn't qualify them for career opportunities as an employee. They dream of having their own business... understanding and willing to put in the extreme effort needed, and to risk failure... just for the opportunity to be successful. Our overbearing governments are killing that dream for all but the most determined. The obstacles for them to overcome are so great that there is a special section within the U of Chicago law school that teaches law students how to assist in small (especially minority) business startups. That special school was founded by the libertarian Institute for Justice. Someone wishing to start a small business on their own NEEDS a specially-trained attorney just to wade through the morass of regulation and paperwork.

In a libertarian society, opening a small business would be as easy as it seems like it should be. You would just do it. Opening a small business need not be any concern of the city, county, or state. Why should it be? The business affects only their customers, if they can attract them and keep them. A business cannot remain in business unless its products or services are in demand, reasonably priced, and unless they do business fairly. If a business fails, it affects nobody but them. If a business succeeds, it certainly won't be because of government involvement. It is the way America was built... millions of small businesses, most of them run by immigrants.

We were once an amazing nation, filled with entrepreneurial spirit and a can-do attitude that literally screamed WATCH MY SMOKE. I don't think that attitude is dead, but it has been severely stifled with governmental roadblocks put in place through the pressure of big business, labor unions, and elected officials who are either corrupt or who believe they have the right to rebuild the world in their own image.

To the urban planners, both those in universities and those who sit on city planning commissions, I issue the often-declared demand of libertarians to government... JUST GET THE HELL OUT OF THE WAY. We are not helpless children in need of parental government protection, nor are we irresponsible kids who require tight controls. Citizens formed governmental units to serve them and perform a few functions. We've allowed it to degrade into us being the servants to government. It is time for us to start putting government back into the role of servant to us.


(From here)

The airing of doubts about global warming that I solicited last week has been remarkable: 169 blog comments (albeit with some repeats) and a number of private emails (including one from a college suitemate and engineering classmate I haven't seen in 18 years). I started the whole discussion because I felt communication on an important scientific issue had broken down, and I figure the best way to make sure we've reconnected the wires is to try and summarize what everyone has been saying. That way, you can correct me if I've misunderstood, misclassified, or just plain missed something. Later, I can take a stab at analyzing the comments and answering some of the requests for further reading, and I hope the discussion will continue from there.

The two most common arguments were:

  • Climate has varied naturally long before humans ever arrived on the scene, so it seems likely that the present trends are simply a continuation of that.

  • The prediction of global warming is just another instance of doomsaying, which has proved so wrong in the past.

I've organized the comments into categories. Obviously there is some overlap among them.

  1. Warming may not actually be occurring. Most respondents seemed to agree that the global average temperature is rising, but some did not. Their doubts hinged mostly on the reliability of temperature and CO2 reconstructions.

    1. This past winter was so cold. Where's the warming?

    2. The hockey-stick graph, which suggests the present warming trend is historically anomalous, is flawed. One respondent said it "has been proven false by many papers." Others worried that, at least, it downplays the natural variability in climate.

    3. The ice core data, one of the ways used to reconstruct past climate conditions, are dubious. They may not represent the global paleoclimate because they sample only a few locations; they appear to contradict the paleobotanic (leaf stomata) data; and they cannot be meaningfully compared with modern surface temperature readings, because they are distinct data sets.

    4. Ground temperature readings are subject to systematic errors such as the urban heat island effect. One respondent went further and complained that the Climatic Research Unit raw temperature data are "kept under wraps," so outside observers cannot verify that selection effects were properly accounted for.

    5. Ground temperature readings contradict satellite measurements.

    6. Reports of changes in polar climate are anecdotal and could be localized effects.

  2. The present warming could be a natural uptick. Respondents pointed out that climate conditions fluctuate because of volcanism, the obliquity cycle, changes in solar output, and internal (chaotic) variability. Why, they asked, do climate scientists attribute all pre-industrial fluctuations to such natural causes and all industrial-age ones to anthropogenic ones? One respondent put it this way: "Every time I read that we have had 'the hottest summer in 100 years' I wonder what caused that hot summer 100 years ago."

    1. It could be a rebound from the Little Ice Age or indeed the last Pleistocene glaciation.

    2. It correlates "nearly perfectly" with solar output.

    3. It could be explained by variations in cloud cover, which alter how much sunlight the planet absorbs. The cloud cover could, in turn, be explained by variations in cosmic ray flux, modulated by solar magnetic cycles.

    4. It could be explained by decreases in Earth's magnetic field strength.

    5. It could be explained by natural methane sources, ranging from termites to the recently discovered aerobic processes in plants.

    6. It could be partly anthropogenic, but the natural variability is larger. A number of respondents argued that it is hubris to suggest that humanity could have such a large effect on the planet. "Many people seem to have a very exaggerated view of how significant we---and our activities---are," one wrote.

  3. CO2 emissions cannot explain the warming. This is complementary to the previous item on natural causes, but I broke it out because respondents offered such a variety of hypotheses for why CO2 cannot cause warming.

    1. Negative feedbacks stabilize the climate system against the direct effect of added CO2. One respondent wrote: "The Earth's ecosystem is far too robust to be affected by this minor change [in CO2 levels over the past century]."

    2. If CO2 drove climate, changes in gas levels should be followed by changes in temperature. Yet paleoclimate data show the opposite: temperature changes first, then the gas levels.

    3. In modern times, temperature and CO2 have been only weakly correlated. For instance, there have been long periods of declining temperatures even as CO2 levels have risen. Climate scientists attribute this to masking by aerosol cooling, but their explanation struck many respondents as ad hoc. Also, most human emissions came after 1950, yet the rise in temperature started earlier.

    4. High CO2 levels earlier in geologic history (for example, during the late Ordovician) did not correlate with high temperatures.

    5. CO2 is a pittance compared to water vapor. By one estimate, it can cause only 0.2% to 0.3% of the warming.

    6. The greenhouse effect has "saturated"---further CO2 input does not increase it.

    7. No one has done lab experiments to study CO2 absorption.

    8. If CO2 causes warming, then the warmed air should rise, reducing air pressure at the surface. That is not observed. The correspondent who raised this objection cited Marcel Leroux's "Mobile Polar Highs" theory.

    9. Although CO2 may be a factor, rising levels of this gas are due not to emissions but to reduced uptake by the oceans (perhaps caused by a diminished phytoplankton population).

  4. Climate models are unconvincing. In this category, I put the argument that, whatever the inherent plausibility of anthropogenic global warming, climate scientists have yet to present a solid case. The concerns here revolve around the inability of models to capture the complexity of the climate system.

    1. The correlation of CO2 levels with temperature is not causation.

    2. Weather forecasting is so unreliable. How could long-term climate forecasting be any better?

    3. The range of model predictions is wide, casting doubt on their reliability.

    4. Models can't even predict El Nino.

    5. Models can't even explain past data. One respondent wrote: "Claiming the models can predict climate is either wishful thinking, ignorance or deceit." Others were more circumspect. One of the few respondents to say what could change their minds wrote: "I'd like to see environmental data from the 1970s fed into today's climate models and the 'predictions' match what actually happened." Another asked whether models can explain climate over geologic time.

    6. Models are not proof. They can be used to prove anything. Being non-falsifiable, they are not really science.

    7. The burden of proof rests with those claiming anthropogenic warming. Because mitigating climate change would entail huge costs, and because past warming episodes have been natural, it is up to climate scientists to dispel all reasonable doubts---not to climate skeptics to prove them wrong.

  5. Warming is a good thing, so we shouldn't try to stop it. The arguments here varied from specific benefits of warming to general reassurances that Earth and its inhabitants have done just fine in earlier periods of warming.

    1. It will increase humidity in tropical deserts and improve the lot of high-latitude regions.

    2. Higher CO2 levels encourage plant growth, and that's good.

    3. Sea level will rise gradually enough that we can readily adapt. The example the respondent gave was beachfront property. Its value will gradually decline as sea levels gradually rise, encouraging a move farther inland over the usual cycle of property investment.

    4. Historically, humanity has done better during periods of warmer climate.

    5. For most of its history, Earth has been warmer than today. The idea is that global warming is nothing to fear because it merely takes us back to a more natural set of conditions. Animals and plants seemed to do just fine in those periods of warm climate. One respondent wrote: "Our present chilly climate is the aberration when judged on a geological time scale." Over geologic time, the global mean temperature is 22 degrees C, versus today's 15.5 degrees C.

    6. It staves off the next glaciation, which we're due for.

    7. Claims that global warming has worsened storm damage, or will do so, are overblown. If storm damage seems to have increased, it is simply because more people live in storm-prone regions and their plight is more widely publicized than before.

    8. Attempts to stop global warming would do more damage they than avert. Warming might be bad, but it is better than the alternative, be it Kyoto or some other mitigation strategy. The underlying assumption here is that the null strategy---letting the economy adopt non-carbon energy sources as commodity prices dictate, without any explicit reference to global warming---carries the least costs.

  6. Kyoto is useless, or worse. Many of the complaints were specific to the Kyoto Protocol, which sets up a cap-and-trade system for greenhouse gases.

    1. It would bankrupt us. One correspondent said Kyoto mandates "a practically unlimited expenditure of effort (and money, naturally)."

    2. Even it would not bankrupt us per se, it would divert resources from other, better-established priorities.

    3. It would reduce warming by a meager 0.02 degrees C.

    4. It exempts developing countries, whose emissions intensity and growth rates are much higher than those of developed countries.

    5. People may claim to support it, but their energy-wasting habits belie their true sentiments.

  7. People who argue that human activity causes global warming can't be trusted. Now we get to what seems to be the single biggest complaint: doubts as to the competence or motivation of scientists and others who accept anthropogenic climate change. Many respondents perceive scientists as jumping to conclusions, haughtily dismissing doubters, refusing to take the time to explain things, and adopting absolutist positions. One respondent wrote: "What data would convince me? I don't know if data is the problem as much as needing to perceive an objective voice." Cataloging these complaints has been hard, but here is my attempt.

    1. Climate scientists have lost their credibility by making bad calls.

      1. They used to predict an imminent ice age.

      2. They falsely attributed the ozone hole to CFCs. The respondent who raised this point wrote that the ozone hole was clearly not due to CFCs because it began to recede before CFCs were phased out.

      3. They uncritically accepted the hockey-stick graph, which was clearly "fraudulent" from the start.

      4. They are guilty of doomsaying, which has been so consistently wrong in the past.

      5. They were too quick to connect last year's hurricane season with global warming.

    2. Climate scientists behave unscientifically.

      1. They ignore contrary data and alternative explanations. Respondents complained that climate scientists are guilty of groupthink. For them to admit they might be wrong would hurt their reputation and funding chances, so they tend to cling to positions with a fervor that the data do not justify. The IPCC was said to seek out evidence that supports its preconceived conclusion. Similarly, people complained that scientific journals do not publish contrary data, presumably because of negative peer reviews by dogmatic climate scientists.

      2. They are arrogant. Researchers, wrote one respondent, "go ballistic if anyone voices doubt." Another said: "A person with doubts, or simply unanswered questions, is shut out of the debate. One can only ask questions when it is phrased with unwavering support for warming."

      3. They have let themselves get caught up in activists' agendas.

      4. They themselves have an activist agenda. Respondents were suspicious that global climate change fits a little too conveniently into a certain environmentalist narrative that holds that humans can do no good (least of all if those humans are Republicans). Moreover, respondents said that if taken at face value, global warming seems to demand Soviet-style government action, which is problematic in its own right and a sign that the hypothesis is ideologically motivated. Because the U.S. is often singled out for its policies, there is a whiff of anti-Americanism, too.

      5. They have a financial interest in global warming. Now we're starting to get into more serious accusations that scientists push global warming because it helps them curry favor with granting agencies. One person wrote: "There are no grants available to disprove global warming.... [Researchers] gather at government's teats for monetary nourishment, telling mommy whatever she wants to hear." Kyoto, too, has created vested interests and a strong incentive to "massage data."

    3. Activists and journalists have gone overboard.

      1. Experts do not, in fact, argue that humanity is the main cause of global warming.

      2. The media sensationalizes warming. It focuses on worst-case scenarios and presents tenative research as definitive.

      3. Scientific American lost its own credibility on the subject when it printed a one-sided critique of Lomborg's book. One respondent claimed that the magazine "threatened legal action to stifle debate" about Lomborg's book.

Wildlife "experts" thin out the pupfish: "Years ago, Southern Nevadans would visit the desert oasis of Devil's Hole to swim, camp, and picnic -- possibly mimicking the behaviors of prehistoric man in that forbidding section of the Mojave, 90 miles northwest of Las Vegas in today's Death Valley National Monument. Animals visited the springs at night. In the cavern springs lived tiny pupfish, which managed to survive these 'assaults' for a very long time. Then wise government functionaries decided to step in and fence off the area, in order to 'protect' the minnow. You're ahead of us, aren't you? Disruption inadvertently caused by scientists trying to study the pupfish are among the factors cited for the fact the creatures -- which numbered 533 when the G-men went to work and which still counted in the hundreds only two years ago -- now number only 84 and appear to be nearing extinction."


Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

Global warming has taken the place of Communism as an absurdity that "liberals" will defend to the death regardless of the evidence showing its folly. Evidence never has mattered to real Leftists

Comments? Email me here. My Home Page is here or here. For times when is playing up, there are mirrors of this site here and here.


No comments: