Market Failures, Political Solutions and Corporate Environmental Responsibility

Abstract

It is strange that contemporary discussions of "corporate social responsibil ity" rarely take the term "responsibility" seriously. Deference is shown to praiseworthy corporate behavior without focusing on the underlying philo sophical issue of whether there are any obligations to reinvest in communi ties, orient operations toward long term development, or protect the envi ronment. It is for this reason that I find it valuable that Denis Arnold and Keith Bustos focus their remarks on a rather basic question: should we place moral responsibility for environmental degradation on businesses even when they have lawfully participated in the marketplace? They answer this question in the affirmative for two central reasons. First, they argue that there are few political, i.e., legislative and administrative, avenues available to correct for corporate activity that adversely impacts key public goods such as air, water and health. Second, the benefits that have accrued to corporations during the last five to six decades have come at a high price, namely, the environ mental health of the planet and thereby the well-being of current and future generations. Justice demands that the benefits one receives should be proportionate to the costs imposed on others through the realization of these benefits. Corporations, thus, have duties to adjust their practices to mini mize these social costs and compensate communities for past harm.