Measurement of the Social Performance of Business

Theodore J. Kreps
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Theodore J. Kreps: Stanford University

The ANNALS of the American Academy of Political and Social Science, 1962, vol. 343, issue 1, 20-31

Abstract: Making money versus making goods, as Aristotle pointed out, constitutes the basic social audit of economic in stitutions and practices. Current discussions of tariffs, of in flation, of stock-market or land speculation, of subsidies and tax loopholes, of resource conservation, of the activities of regulatory commissions, of stock pile and military spending, of advertising, monopoly, and featherbedding, and of price and wage increases abound in round-robin recriminations about "ir responsible and unjustifiable action," "unearned income," "in jury to public welfare," "something for nothing," "too much for too little," "waste," and so on. Can the social perform ance of business be identified, estimated, measured? How? With what limitations? Four major currents of thought muddy public discussion. Some maintain that "business is business." Profits per se measure social performance. Others rely heavily on classical competitive equilibrium processes or other versions of the "invisible hand." A third group—rig orously mathematical exponents of the new welfare economics —are pessimistic about even the possibility of finding a useful social-welfare function. An emerging fourth group affirms the principle of social responsibility of business, some in frankly prescriptive value terms, other in what they convince them selves are scientifically determinable and operable, though im precise and variable, zones or paths for creative voluntarism.

Date: 1962
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:343:y:1962:i:1:p:20-31

DOI: 10.1177/000271626234300104

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