“Mens Sana in Sound Corporations”: A Principled Reconciliation Between Profitability and Responsibility, With a Focus on Environmental Issues

Octavian-Dragomir Jora, Matei-Alexandru Apăvăloaei, Vlad I. Roșca and Mihaela Iacob
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Octavian-Dragomir Jora: The Department of International Business and Economics, The Faculty of International Business and Economics, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Matei-Alexandru Apăvăloaei: The Department of International Business and Economics, The Faculty of International Business and Economics, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Vlad I. Roșca: The Department of Business Administration (UNESCO), The Faculty of Business Administration (in Foreign Languages), The Bucharest University of Economic Studies, 010374 Bucharest, Romania

Sustainability, 2020, vol. 12, issue 4, 1-22

Abstract: Corporate social responsibility (CSR) is a praised and promoted business behavior nowadays, widely understood as the entrepreneurs’ and managers’ attempts to make amends for some of the excesses that their economic activities bring about, for instance with regard to environmental negative externalities or to public ecological assets under-provision. It is of utmost importance to duly process and profess the CSR concept, one placed at a subtle interplay between business profitability and civic/social responsibility, between economic and ethical/legal realms, since the misrepresentation of economic agents’ benchmark of proper conduct might harm both social landscape and ecological environment. Still, despite its rich occurrence in scholarly literature as well as recurrence in business practices, CSR requires both further and thorough clarification, since many studies postulate that the free-market mindset is rather dismissive of CSR solicitudes. The current research paper fills such a sensitive conceptual gap by explaining why CSR regards are logically compatible with the free markets, with no reason to decree a market failure in this matter. The work takes the form of an analytical research, of an explicitly conceptual nature, based on praxeologically-deductive argumentation, documenting the fundamental compatibility of CSR with the free market order, populated by profit-driven capitalist corporations that, far from being reckless, are disciplined by the rule of law of clearly defined, defended, divestible property rights. As such, the plea adopted the methodological acquis of the Austrian School of law and economics. The main findings of the present study reveal that (a) in economic commonsense, the “profit motive” is the prima facia rule of judiciousness as the care for third-parties’ welfare can be ensured only after own well-being has been secured, while (b) ethically, “social responsibility”, as an extra-contractual duty, does build up on top of, not as trade-off with a robust property rights order.

Keywords: corporate social responsibility; ethics; economics; praxeology; environment; ecology; free market; profit; interventionism; policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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