This article espouses a topic popular in most business schools today: they want to quantify (or simply pay lip service to) the idea of social responsibility. You will see all sorts of attention paid to this in most MBA programs today.

The idea isn't a new one and can trace its roots back to Marx and probably beyond. Marx argued that the workers should own the means of production [1]. That's simply a different take on creating "shared value".

But this article, as you'd expect from Harvard, is high on naive ideals. For example:

Not all profit is equal...

The premise is that corporations have a social responsibility. I view this as being like the idea of keeping tigers as house pets. You can change the purpose of a tiger to be a domesticated animal but at some point that tiger is going to snap your neck because, hey, that's what tigers do.

Of course tigers aren't inherently bad. The point is that tigers are really not suited for the purpose you have in mind.

Trying to colour corporations with morality is I think much the same. Capitalism works because corporations are amoral entities that simply respond to their environment. Add warm water to dry yeast and it grows. Add salt and it dies.

You control the actions of corporations not by making them feel something. You control them by treating them as yeast and adding warm water, salt or whatever is required.

To put it another way: you control corporations by controlling their environment.

Unless you're a pure capitalist you will recognize that there is some place for government intervention and regulation, not only for the good of the people but for the good of the corporations themselves.

Antitrust for example came about because companies were too successful. You can get an algae bloom in a river. The algae will eventually die out but only after killing virtually everything in the river and then starving.

In England the road system was nationalized (many years ago). In the US, the railroads were.

The difficulty lies in deciding exactly how much intervention is required.

Our current woes I think boil down to one thing: there is a mismatch between the interests of people and corporations and the interests of the politicians who decide what the intervention is. Corporations and people have to deal with consequences for a very long time. Politicians are often only concerned about what happens between now and the next election.

Of the things broken with the current system at the top would be (IMHO) the financial system. By this I primarily mean the Federal Reserve, the IMF and the World Bank.

The IMF and the Federal Reserve now have a role where they are basically welfare for investment bankers. You have seen crisis after crisis in recent years that largely stem from financial institutions having almost no aversion to risk. Why? Because we've trained them that way. If they ever get in any serious trouble, don't worry, we'll bail you out!

Likewise the IMF/World Bank continue to throw money at developing nations because, basically, they can never lose that money. A country can't declare bankruptcy like a person or corporation can.

Initiatives like HIPC [2] are misguided. The country already can't pay. All you're doing is paying bank the organizations that never should've lent them money to begin with.

It should also be noted that some of these loans end up funding war, revolution and even genocide as well as funding the personal fortune of corrupt dictators.

Back to capitalism: capitalism has been the engine that in less than 200 years has turned us from a largely agrarian existence to computers and putting man on the Moon, while increasing the standard of living of billions of people to levels unprecedented in human history.

So when I read something like this, I think it's just the latest fad from Ivory Tower MBA academics who seek to justify their existence in a world that is largely coming to the conclusion that the MBA itself is a destructive fad.

[1]: http://en.wikipedia.org/wiki/Means_of_production#Marxist_ana...

[2]: http://en.wikipedia.org/wiki/Heavily_Indebted_Poor_Countries