Saturday, August 13, 2005

A roundabout discussion of "Culture and Enterprise"

In my opinion, one of the most fascinating Austrian Economists is Don Lavoie. It is a shame that he died so young and that his work is difficult to find. His work is engaging in several ways. Most notably, he lead the "interpretive turn" in Austrian Economics. This is notable simply because he takes the difficult job of defending some of post-modern philosophy--something that most people in modern economic and philosophical discourse are loathe to do. Because I am interested in ideas, I find the defense of unpopular ideas interesting. Furthermore, he has worked a good deal on economics and cultural studies, and perhaps sucessfully worked in a way that merges the two fields. Finally, he tends to write in a way that will appeal, at least somewhat, to the aspirations of the cultural left, by explaining why statist means are ultimately unsuccessful ways to obtain their goals--without spending much time denigrating their sentiments.

It is this last part, the acceptance of some "leftist" goals and sentiment, while trying to explain to that libertaian means are more efficient that interests me. I find it particularly interesting. I also find it possibly futile. The conclusion, if it can be maintained is possibly powerful. If it cannot be maintained it is a lot of waisted effort.

To explain what I am getting at, I would like to deal with the last chapter of what I believe to be his last book, Culture and Enterprise (which he wrote with Emily Chamlee-Wright). In this chapter, he argues that the shareholder model of business ethics is deficient. His argument, relying on previous chapters which discussed the cultural embeddedness of markets and the inaccuracy of the neoclassical model of business decision making is probably sound. He also, very accurately, refuses to accept the full "stakeholder" theory of business ethics as too demanding and impossible for busienss to fullfill. The conclusion that he comes to is that there is room for philanthropic activity in the business world and that there is room for "moral" as well as "economic" choices in the running of a business.

While this is all well and good, and an effort that I support, I have a fear that this will appeal to the "cultural left" (I am not saying that this is his intention, although it does seem to be his intention in some of his work). To understand why, all one has to do is to read this piece by Sheldon Richman. In that story, Richman details the charitable efforts of Wallmart, and how certain leaders of the philanthropic wold have attacked Wallmart's philanthropic efforts. Wallmart is the biggest corporate donor in the country. Even so, the National Committe for Philanthropic Responsability condemns Wallmart for its philanthropic activity. They say that it is just "corporate advertising" and that it is too locally driven (never mind that one of the main criticisms of Wallmart is that it destroys small towns).

The point that I am trying to make is that it may be impossible to appeal to large segments of the left, including the "National Committee for Philanthropic Responsbility". I have to wonder whether anything will satisfy such critics, short of pain and suffering on the part of those who can afford to give. Must philanthropic contrabutions hurt? Is it that the company is so successfull that they can make them without noticing (or that they may even be a revenue producer) the problem?

This is no way a criticism of the work of Lavoie. However, it is a part of his work that I find fascinating and somewhat unsatisfying.

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