Products were often sold to known people by known people. However, there is this idea of "the market". This phrase may conjure up images of Wall Street or of street vendors but the idea is the same--an impersonal selling platform in which buyers and sellers do not necessarily know one another. It is also a place in which price is set by supply and demand.
The Industrial Revolution brought sweeping change to society and it was a key subject for many early sociologists such as Marx and Weber. The Frankfurt school gave the world notions about every corner of society being touched by industrialism and consumerism.
Years later, it seems that the whole Western industrial world has become commodified. Everything in society seems to have an equivalent market experience. The values of industrialism, such as efficiency and ownership seem to touch everything in society.
In stark contrast are many indigenous tribes and peoples. For many such peoples, ownership is a foreign concept. They don't want to own the lands that have been appropriated through European conquest--they want land to be un-owned as part of the natural environment. Land is a part of identity, ancestry and culture but not something to be possessed.
Many Westerners cannot conceive of something not being owned. To make this clear, we are not talking about state ownership or public property we are talked about non-ownership.
A related idea is the unsalable. What things should not be sold in society and why? In the 1980s the United States had to pass a law forbidding the sale of organs. This illustrates the penetration of industrial thought because it suggests that pricing can create efficient distribution of resources. In an MBA class I took, a professor told us that in some cases, toll roads exist not to make money, but simply because the road cannot be made bigger and alternative roads cannot be built so the toll is to discourage those who do not REALLY want to use the road from using it. Of course, this is all related to the idea of the invisible hand and the notion that the free market balances the distribution of resources in a natural way.
However, should the invisible hand press forth throughout society unhindered? Disputes about "which is better, capitalism or socialism" seem to pivot on this question. Here are some considerations on the failures of the invisible hand:
(1) The invisible hand gives a leg up to the wealthy over the poor, perpetuating the rule of the wealthy.
(2) The invisible hand also fails big when it comes to negative externalities. Most business are interested in doing humanizing things inasmuch as it yields a profit, but they are less interested in doing so only in the name of justice with no commodity reward. Pollution is a great example. Large factories are pollution machines but decline to engage in responsible conduct unless there is a punishment or incentive affixed that motivates environmental responsibility. The punishment need not be inflicted by the government. For example, if a large group of people refuse to buy the businesses products it may be enough to motivate the business to engage in more responsible conduct vis-a-vis the environment. The bottom line is that most businesses are about making money as the bottom line and they often cannot see that internalizing negative outcomes is simply a matter of justice and social responsibility. It is sort of a "prisoner's dilemma" game as well because if everyone else pays to internalize negative outcomes, a competing business will be tempted to not do so as a cost-saving measure that will help them edge out everyone else.
(3) Businesses have also found that they can "manufacture" social responsibility. In other words, businesses do not have to take care of their pollution problems, or help out in the community or care about the customers, they simply have to convince everyone that it is so. This is the Potemkin Village of business. Cohen (1988) used the phrase "staged authenticity", and it is one that is very fitting. Businesses often make "giving off" social responsibility a priority over actual socially responsible conduct because the former is cheaper than the latter. It may cost $3M to change a factory to be more environmentally friendly, but may only cost $50,000 to run some commercials of a company executive planting a tree in a barren field and patting a happy child on the head.
There are many interest groups that are opposed to business conduct that favors profit over social responsibility. At times the entire Western world seems divided into two camps: (A) the "business is the answer" trickle-down camp and (B) the social and environmental justice camp. Even political parties in the United States mirror this. If asked to associate a part with each of the two groups just described, the average (somewhat educated) American would quickly observe the connections between group (A) and Republicans as well as group (B) and Democrats.
Having completed graduate education in business and sociology, I watch the argument from on top of the fence that separates the two. I should note that it is actually a very narrow stretch of land rather than a fence. In education it is commonly occupied by economic sociologists and behavioral economists. In Europe, there is much more acceptance for these ideas than in the United States as well. Italy seems to be the headquarters of this think tank. But why is this group comparatively so small?
Imagine a presidential candidate saying (and some have), "Let's keep business big and socially responsible." What is wrong with that? If you are really asking that question, refer back to #1-3. It is a prisoner's dilemma game. The more people cooperate and act in a socially responsible manner by absorbing costs of negative social outcomes, the more incentive there is for a competing firm to get ahead by breaking all the rules. If company A, B, C ... Y pay more to have environmentally friendly production processes and practices and pay an average of $34M a year each to do so, then company Z comes along and thinks, "WOW! I can effectively give my company a $34M increase in profits this year by not adopting the environmentally friendly practices."
In a utopia, every is so repulsed at the nefarious ways of company Z that they refuse to do business with them, but in practice, people go where they can buy the cheapest widget and that's it. So company Z makes out like a bandit and companies A though Y either go out of business or join company Z.
I always bask in the irony when I hear someone say, "Company X is so currupt! Why are they gouging us with high prices and wasting money on Super Bowl advertising." And I offend them a little when I say, "Because you encourage them." "They are gouging us" means the speaker is buying the product. The reader may say, "Well, I don't support companies like that." It does not change the fact that businesses will not remain in business without financial support and that means someone is shopping there.
I call it the Justin Bieber Effect. When I mention Justin Bieber in a room (whether the room is full of tweenage girls, or middle aged men) the universal response is "Ew! Gross. Don't talk about him. I hate him." Then I pull up YouTube on my phone and show them that the Justin Bieber channel has 10 BILLION views. He also has had one of the top 3 most viewed songs of all time on You Tube for several years. So, no one loves Justin Bieber, but everyone is listening to him on YouTube? It is the same with sustainable business. A lot of people say they do not support such companies, but SOMEONE is...in fact a lot of "someones" are.
A great study just came out of Yale University. The researchers found that children are less likely to take stickers from someone if they are told that person did a bad thing, until they are bribed sufficiently. When offered 16 stickers from a person who had reportedly done a bad thing it is enough to sway them back to taking stickers from that person (Tasimi and Wynn 2016).
Adults, like children, want businesses to be socially and environmentally responsible, but they can be bought when the price is right. That is a big reason why businesses continue to be socially irresponsible.
Socially and environmentally responsible business is a reflection of the society in which the business operates. If our society comes to value socially and environmentally responsible business it will be inevitable. Conversely, we can pass a bunch of laws that will thrust more expenses on business and require them to find loopholes around the law to stay in business.
To bring this back to the point mentioned at the beginning: Business and social/environmental responsibility do not have to be at odds with each other. Society simply must value social/environmental responsibility enough that it will be inevitable. So, my degrees of business and sociology play nicely together in hopes of moving in this direction.
As a final note, there are already a number of environmentally responsible practices that are just as affordable as their non-responsible counterparts. Let us at least begin there. Without taking up that discussion here, an interesting example is edible silverware that can replace plastic. But society needs to change first to accept and encourage these solutions.
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Cohen, E. (1988). Authenticity and commoditization in tourism. Annals of tourism research, 15(3), 371-386.
Tasimi, A., & Wynn, K. (2016). Costly rejection of wrongdoers by infants and children. Cognition, 151, 76-79.
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