What is corporate social responsibility for?

Yesterday in a post on the UNDP's growing inclusive markets initiative, I mentioned a debate taking place on Creative Capitalism. Here's what the debate is all about:

Creative Capitalism: A Conversation is a web experiment designed to produce a book -- a collection of essays and commentary on capitalism, philanthropy and global development -- to be edited by us and published by Simon and Schuster in the fall of 2008. The book takes as its starting point a speech Bill Gates delivered this January at the World Economic Forum in Davos. In it, he said that many of the world's problems are too big for philanthropy--even on the scale of the Gates Foundation. And he said that the free-market capitalist system itself would have to solve them.

It sounds like an interesting experiment (although the fall 2008 date for a book sounds a bit, eh hem, ambitious). So far, they've gotten posts from the likes of William Easterly, Milton Friedman (ok, this one is a reprint), Clive Crook, and Richard Posner, among others.

This collection of commentators has made for a pointed discussion. Here are some of my favorite bits:

Ed Glaeser:

Milton Friedman's 'The Social Responsibility of Business' is a great essay which reminds us that the anthropomorphic tendency to treat corporations as independent actors is an error. Corporations represent shareholders and their primary obligation is to enrich those shareholders. When corporate chieftains use their shareholders' money to support pet social causes, they are depriving their shareholders of the right to make their own decisions about charity and they are taking credit for the largesse of their investors.

William Easterly:

Falling all over ourselves apologizing for capitalism and then offering a token amount of corporate philanthropy to try to repair its imagined defects is lame. If consumers of corporate products want those corporations to give a little bit of the money to the poor, then I am sure corporations will respond to demand. But this is small stuff as a force against poverty based on any available track record. A more reliable path to success against poverty is to simply take advantage of all the power of conventional capitalism that has already been abundantly demonstrated in the steady fall of global poverty over the decades.

Paul Ormerod had this to say about Bill Gates:

Academics should be feeling pretty pleased with this debate, regardless of the stance which they take. Men who have made stupendous amounts of money seem to really, really want to be remembered for the profundity of their thoughts rather than their mere financial success. Mr Gates, with his concept of creative capitalism, joins Mr Soros with his invention of ‘reflexivity'.

And Bill Gates himself:

Well [creative capitalism is] not completely well defined. It’s a phrase that I used in a speech at Harvard a year ago, because I totally believe in markets as such powerful forces for drawing out innovation and creating things that are sustainable. And yet, you do get trapped in this situation where the markets serve where the dollars are, so you don’t get markets meeting the needs of the poorest. And so how do you bootstrap or support the needs of the poorest so markets are reaching out to them.

My one question is this - who's going to buy this book since it's all online for free? Too bad there were no economists to advise them on this experiment...

Update: It looks like the folks over at Creative Capitalism have picked up on this post. I have actually managed to come in for some harsh criticism from some of the commentors. I should note that the final line in this post - "there were no economists to advise them" - was meant as a bit of irony, considering the number of outstanding economists contributing to the conversation. I think I'll have to buy the book myself now...