“Conscious Capitalism”: Lipstick on a Pig?

Not Business Usual

Directed by Lawrence Le Lam, Rik Klingle-Watt (2014)

Film Review

Not Business as Usual challenges the maxim promoted by neoliberal economist Milton Friedman that corporations have no social obligation beyond providing a short term financial return to their shareholders. It traces the rise of “conscious capitalism” and the “B corporation,” which started from a 1989 Colorado meeting of the founders of various socially responsible corporations, including Patagonia, the Body Shop and Ben and Jerry’s.

The goal of the B corporation is to introduce social responsibility to capitalism. Thus far 20 states have introduced regulations for chartering B corporations, and 18 are working on pending legislation. Criteria for becoming a B corporation include responsible environmental practices, demonstrated commitment to the community and fair treatment of employees. According to the film, a B corporation commits to high environmental and employment standards along the entire supply chain. Thus a B corporation selling eco- apparel commits that the contractor producing the garments isn’t ruthlessly exploiting workers or discharging harmful chemicals into Bangladeshi waterways.

The documentary highlights a number of B corporations whose activism has resulted in groundbreaking changes in their communities and, in some cases, the third world. I was particularly intrigued by a B corporation called Lunapads. Lunapads has introduced low cost, washable menstrual pads to 120,000 women in the third world. In Uganda and other African countries, teenage girls typical skip school during their period when they lack access to affordable menstrual pads. In addition to keeping teenage girls in school (and unmarried), local manufacture of Afropads has created hundreds of local jobs.

Can the “Conscious Capitalism” Movement Save Capitalism?

The filmmakers contend the “conscious capitalism” movement will save the capitalist economic system. They argue that consumer pressure will eventually force all corporations to become more socially responsible – insisting consumers are demanding more socially responsible products and are happy to pay more for them.

I find a number of fallacies in this argument. In the first place, it’s only middle class consumers who are “demanding” ethical products, a middle class that is rapidly vanishing in most of the industrialized world. Minimum wage workers who are a paycheck away from the street have no choice but to opt for the cheapest clothes, foods and household goods they can find.

Secondly the present economic and environmental crisis is driven by powerful monopolies, particularly in the banking and defense industry. The thought of banking monopolies like Goldman Sachs or JP Morgan suddenly transforming themselves into B corporations is ludicrous. At present the main obstacle preventing entrepreneurs from forming B corporations is the unwillingness of Wall Street banks to provide start-up funding.

Thirdly while the social activism of individual B corporations is extremely laudable, I question the criteria used for measuring community responsibility. Surely a B corporation that’s truly committed to their community wouldn’t be seeking out “ethical” apparel contractors in Bangladesh. Surely they would be bringing these jobs back home to their local region.

The irony here is that many of the entrepreneurs who started the “conscious capitalism” movement made their fortunes by selling up to multinationals who clearly don’t share their vision. Ben and Jerry’s sold up to Anglo-Dutch food giant Unilever in 2000, and in 2006 the Body Shop agreed to a takeover by l’Oreal.

We have approached our local Body Shop outlet numerous times about supporting local environmental issues (ie fracking, fecal runoff from dairy farms). Claiming “corporate-wide policy,” they won’t even permit us put a poster in their front window.