Space...the final frontier?

I have referred before the important role of corporations. I have shown that corporations enjoy a multitude of rights and they are important counterparts of the private citizen. In fact, capitalism is built around these corporate citizens. I have pointed out that while there might be negative externalities spilling from the core activities of the corporate world on the remaining of the society, corporations have their important role for the overall progress and wellbeing of the humankind. I have argued that while there might be reasons to provide incentives for corporations to become more socially and environmentally responsible, this has to be done within their natural framework, which is profit maximizing.
I have also said that I believe that an even clearer line has to be drawn between the corporate citizen and the private citizen. This is due to the fact that, even if today they enjoy pretty similar legal regulation, these two citizens are driven by different behavioral motives and objectives. Corporations are less susceptible, if at all, to posses the kind of moral restrains that humans supposedly posses. In fact, it is not natural for them to be restrained by such reasons. Corporations should strive to succeed, even if this means wiping out their fellows. This Machiavellian, or I should say Schumpeterian behavior is desirable, and the ultimate result is an increased overall welfare, progress and efficient allocation of resources.

However, I can see a potential problem with this separation between the corporate world and the remaining of the society. Every time there will be an objective that falls outside the profit maximizing framework, society will fail to account for it. I guess pollution reduction falls in this category. It is fortunate that we still have the means to impose socially desirable objectives to the corporate world, although it is not an easy thing to do. But there are objectives that are very difficult to be brought within the desirable spectrum for the large audience. And it could happen that these objectives might be extremely beneficial for the humankind because they would create an unexpected range of opportunities, even for the profit-seeking citizens. One obvious example is interplanetary exploration. It is very difficult to see direct and profitable benefits from such an activity, at this point, but the gold mine could be there anyhow. And because developed world is built around the needs of the corporate citizen (capitalism), there was no real push in this direction outside the national pride of a few countries. I guess the time will come when we will experience an explosion of efforts towards extraterrestrial activities. But that will happen only when the corporate world will identify material benefits. This practically means that our path and rate of development are entirely determined by the spillovers of the corporate world. Could this be a frontier in itself? I’d say it could, and it seems to be yet bounded within the space frontier.

The moral dilemma of Bill Gates

I have referred before the concept of homo oeconomicus. We need this concept because it makes the research of economic phenomena so much easier. It abstracts from any other characteristics of a complex human being, and focuses on that behavior that is driven only by economic reasons. To some extent, this is a satisfactory approximation of our daily decision making. Moreover, with properly constructed utility functions, many purely altruistic decisions can be described in economic terms (e.g. gifts for an increase of self esteem). There are boundaries to the concept, but as long as we are aware of these boundaries, we can use it in a productive way, at least in the academic world, and derive useful implications for our daily life.
One other aspect I would like emphasize is the status of the firm. Firms are entities that enjoy more or less the same social status as individuals, at least from a legal perspective. There are differences, but mostly in favor of firms. Corporations cannot be elected to held public or political functions. But they can delegate individuals who can lobby on their behalf. All property rights are the same as for private individuals. Moreover, they can mobilize impressive resources for pursuing their goals and a private person might want to consider seriously whether to embark legal battles with corporations.
Given all these, it is clear that corporations are engaged in decisions that are likely to alter the well-being of individuals, and the social welfare. But is this the way it should be? Clearly, the Anglo-Saxon liberalism and the western economies seem to accept this as a natural law of the free market economy.
I would argue that all the regulation directed to private individuals implicitly considers a sort of moral censorship of one’s actions. This is certainly not the case for companies. Companies cannot be held accountable for actions that are “immoral”. Not form a legal point of view. Sure, there is public opprobrium, but this is important as long as it interferes with the profits the company makes.
The conclusion is that maybe we need to draw a clearer line between these two important actors of the social scene: the corporation and the individual or, if you like, the household.
Bill Gates is an important contributor to the philanthropy industry. He devoted vast amounts of his own wealth to this purpose. Lately, he dragged Warren Buffet into this. These guys made their fortune by allowing their companies to play by the fiercest rules of the corporation world. They most certainly succeeded wonderfully. But Microsoft is facing serious charges for its anti-competition and monopoly practices. Most certainly, society as a whole would benefit a lot from cheaper and readily available software. But Bill Gates, probably the philanthropist number one in the world, does not seem to care about this. As a researcher in the field of corporate social responsibility, I was thinking: My God, this guy fails to see that he would reap tremendous social empathy for Microsoft if he would do its charity on behalf of the company, instead of its own. Sure, he is not sole stakeholder, but I don’t think the others would mind. Microsoft was severely fined by the competition authorities of the EU, and people approved that. I think the situation would have been different if Microsoft would have identified itself as a philanthropic and altruistic entity, instead of a ruthless profit seeking corporation.
A superficial conclusion would be that Bill Gates is an egoistic maniac that wants to keep for him all the spillovers of the philanthropic activity. Well, I guess both Bill Gates and Warren Buffet are to smart not to see the opportunity I mentioned above. Instead, I think they perfectly realized that corporate world is distinct from the social world of private individuals, and the clearer the demarcation line, the better. So let Microsoft and Berkshire Hathaway be the ultimate corporate warriors without bugging them with moral issues that do not belong to their world, and increase social welfare through the means of the decent human empathy, that is so dear to us, private individuals.