by Robert Maynard
In a previous article I examined the group “Vermont Businesses for Social Responsibility” and raised the question of whether “they are simply promoting the notion of social responsibility, or pushing a political agenda.” After reviewing the policies supported by the group and the candidates supported by some of its board members, I reached the following conclusion: “In order to take VBSR’s claim of carrying the banner of social responsibility into the business community seriously, one would have to accept the notion that the ideal of social responsibility is defined primarily by the degree of support for the political agenda of the left with its focus on expanding the role of government into all areas of our lives.” The assumption that social responsibility and, for that matter, social justice, is largely defined by the degree of support for bigger and more expansive government, goes unchallenged all too often. I find that a bit odd given the actual track record the approach has when it comes to practically realizing the ideals professed by its adherents. In a 2009 piece, I noted that New Hampshire regularly sores better than Vermont in the U.S. Department of Agriculture’s “Hunger Insecurity” report:
As pointed out by a December 2nd Valley News article entitled “Food on The Table: Why Twin States Aren’t Identical”:
“Food insecurity, not surprisingly, is really just another name for economic insecurity, so differences in income and employment contribute to differences in the ability of households to provide adequate nutrition. But other factors also affect the prevalence of food insecurity, including housing costs and the state tax burden on low-income households.”
Looked at from this perspective, there is no mystery at all as to why Vermont would have a higher rate of “food insecurity”. We are a low wage state with a relatively higher poverty rate in comparison to New Hampshire (10.5% vs. 7.6%). In addition to lower wages, we have a higher unemployment rate than New Hampshire (5.9% vs. 4.3% for 2008). According to the Valley New article: “Add in Vermont’s high housing costs and high taxes, and you may have an explanation for why “very low food security” is more common in Vermont than in many other states.”
There does not seem to be any improvement in our economic prospects since then. According to the Small Business Survival Index 2011: Ranking the Policy Environment for Entrepreneurship Across the Nation report, Vermont ranked 48 out of the 50 states. Given the link between hunger security and economic opportunity, one would think that a business group promoting social responsibility would pay a little more attention to the factors that boost economic opportunity. Again, as I noted in the 2009 piece, the bigger problem for Vermont is not our current ranking as much as the trajectory we are on:
What should concern us most is not that New Hampshire is out-performing us when it comes to caring for the poor, for that has been the case for some time now, but that our ranking relative to the rest of the nation is slipping as well. According to the Valley New article:
Still, the prevalence of food insecurity in Vermont comes as a surprise. Historically, rates have been below the national average, though higher than in New Hampshire, and “very low food security” was near the national average until 2006. Something has changed, and whether the change reflects the disproportionate impact of the recession, an anomalous survey sample or a combination of both is a subject of speculation.
I am not convinced that anything has really changed. One possibility not considered in the article is that the welfare state model being pursued by Vermont is not sustainable. The more you punish achievement and discourage the creation of new wealth, the more wealth creators will flee to greener pastures and the less such activities will take place. In time you end up killing the “goose that lays the golden eggs” and there is less left to support the unstable pyramid of social programs created over the years. This is something that the welfare states of Europe have started to learn and is one that we had better take to heart as well.
Another area of concern for those touting “social responsibility” is the preservation of the environment. Here again it is not at all clear that the path of greater government control is more conducive to a clean and healthy environment. Some of the worst environmental conditions on the planet can be found in countries like China that have a command and control economy. The ruin of the environment in places where resources are held in common was explored in 1832 by William Forster Lloyd, a political economist at Oxford University, who was looking at the recurring devastation of common (i.e., not privately owned) pastures in England. In 1968 economist Garrett Hardin wrote a book on the subject titled “Tragedy of the Commons”. Here is a quote on the subject from a later article:
Whenever a distribution system malfunctions, we should be on the lookout for some sort of commons. Fish populations in the oceans have been decimated because people have interpreted the “freedom of the seas” to include an unlimited right to fish them. The fish were, in effect, a commons. In the 1970s, nations began to assert their sole right to fish out to two hundred miles from shore (instead of the traditional three miles). But these exclusive rights did not eliminate the problem of the commons. They merely restricted the commons to individual nations. Each nation still has the problem of allocating fishing rights among its own people on a noncommonized basis. If each government allowed ownership of fish within a given area, so that an owner could sue those who encroach on his fish, owners would have an incentive to refrain from overfishing. But governments do not do that. Instead, they often estimate the maximum sustainable yield and then restrict fishing either to a fixed number of days or to a fixed aggregate catch. Both systems result in a vast overinvestment in fishing boats and equipment as individual fishermen compete to catch fish quickly.
Even when the shortcomings of the commons are understood, areas remain in which reform is difficult. No one owns the Earth’s atmosphere. Therefore, it is treated as a common dump into which everyone may discharge wastes. Among the unwanted consequences of this behavior are acid rain, the greenhouse effect, and the erosion of the Earth’s protective ozone layer. Industries and even nations are apt to regard the cleansing of industrial discharges as prohibitively expensive. The oceans are also treated as a common dump. Yet continuing to defend the freedom to pollute will ultimately lead to ruin for all. Nations are just beginning to evolve controls to limit this damage.
It would be a service to all if we got a little more serious about actually having a dialogue about the matter of social responsibility instead of merely using the phrase as moral cover to promote a big government agenda that may actually be working against the ideal.