Adam Smith, just commercial society and corporate social responsibility

Stefan Fritsch

Review of International Political Economy, 2023, vol. 30, issue 4, 1582-1604

Abstract: This paper engages Adam Smith’s reflections concerning the moral and economic dimensions of business–society relations in the context of the Multinational Corporation (MNC). The paper argues that Smith formulates a pronounced moral criticism of prevailing corporate business practices, which emphasize profit while de facto undermining the moral underpinnings and social cohesion of commercial society. Rather than simply promoting selfish profit maximization by individuals, businesses, and society at large, Smith’s work reveals a deeply entangled analysis of the complex interplay between material interests, moral aspects of human behavior, and Smith’s overall goal of broad socioeconomic welfare. The balancing of moral and material motivations requires the social embeddedness of economic exchange within normative community frameworks. In this context, the sociopsychological process of moral approbation via Smith’s impartial spectator mechanism has the potential to temper humans’ tendency for excessive (material) self-love. Smith’s scrutiny of internationally active corporations problematizes a range of institutional and governance issues and their implications for the moral bonds between individuals, MNCs, and global society. Most importantly, Smith worries about the potentially negative impact of increasingly anonymous and emotionally distant economic relationships between market participants on their ability to reckon with the moral consequences of their actions. Building on Smith’s entangled perspective, the paper proposes a normatively grounded framework to critically contend with contemporary efforts to redefine corporate citizenship in the global economy.

Date: 2023
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DOI: 10.1080/09692290.2022.2127832

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