Passage: “We have always known that heedless self-interest was bad morals. We now know that it is bad economics.’ said American President Franklin D. Roosevelt in 1937 in the midst of the Great Depression. And the world has learnt that enlightened self-interest is good economics all over again after the Great Recession of 2009. Americans are entering a period of social change as they are recalibrating their sense of what it means to be a citizen, not just through voting or volunteering but also through commerce. There is a new dimension to civic duty that is growing among Americans – the idea that they can serve not only by spending time in communities and classrooms but by spending more responsibly. In short, Americans are beginning to put their money where their ideals are.

In a recent poll most said they had consciously supported local or small neighbourhood businesses and 40 percent said that they had purchased a product because they liked the social or political values of the company that produced it. People were alarmed about ‘blood diamonds’ mined in war zones and used to finance conflict in Africa. They were also willing to pay $2000 more for a car that gets 35 miles per gallon than for one that gives less, though the former is more expensive but environment friendly. Of course consumers have done their own doing-well-by doing-good calculation a more expensive car that gives: better mileage will save them money in the long run and makes them feel good about protecting the environment. Moreover since 1995, the number of socially responsible investment (SRI) mutual funds, which generally avoid buying shares of companies that profit from tobacco, oil or child labour has grown from 55 to 260. SRl funds now manage approximately 11 percent of all the money invested in the US financial markets -an estimated $ 2.7 trillion. This is evidence of a changing mindset in a nation whose most Iconic economist Milton Friedman wrote in 1970 that a corporation’s only moral responsibility was to increase shareholder profits.

At first the corporate stance was defensive: companies were punished by consumers for unethical behavior such as discriminatory labour practices. The nexus of activist groups, consumers and government regulation could not merely tarnish a company but put it out of business. But corporate America quickly discerned that social responsibility attracts investment capital as well as customer loyalty, creating a virtuous circle. Some companies quickly embraced the new ethos that consumers boycotted products they considered unethical and others purchase products in part because their manufacturers were responsible. With global warming on the minds of many consumers lots of companies are racing to ‘out green’ each other. The most progressive companies are talking about a triple bottom line-profit, planet and people – that focuses on how to run a business while trying to improve environmental and worker conditions. This is a time when the only thing that has sunk lower than the American public’s opinion of Congress is its opinion of business. One burning question is how many of these Corporate Social Responsibility (CSR) initiatives are just shrewd marketing to give companies a halo effect? After all only 8 per cent of the large American corporations go through the trouble of verifying their CSR reports, which many consumers don’t bother to read. And while social responsibility is one way for companies to get back their reputations consumers too need to make ethical choices.