Corporations Already “Give Back”; What Can We “Give Back” to Them

The notion of “giving back” is greatly misunderstood, especially with regard to corporations.  The concept of “giving back” typically means that an individual or company should contribute resources to charitable organizations that serve society at large and not just the customers of the company.  For example, contributing to alleviating poverty, hunger, homelessness, or contributing to local civic organizations with money, time, or goods.  However, what is often overlooked is that corporations already contribute to society by providing employment and meaningful work for individuals, engaging individuals in cooperative teamwork, and producing goods and services that society wants.  To also ask corporations to make additional contributions in other ways demonstrates a fundamental misunderstanding of the benefits corporations already provide to society.  There are clamors in society for corporations to pay more in taxes or to make mandatory charitable contributions.  These demands belie overlooking and undervaluing the contributions that corporations already make to society.  It is certainly OK to ask, but not demand, these additional contributions from corporations provided that the wide-ranging benefits of corporations are first recognized.

Corporations first of all only exist if they provide a product or service in demand by individuals, and provide it at a competitive price.  A corporation has no power to require individuals to purchase its products or services; the corporation must serve the consumers.  Corporations must innovate and provide better quality or lower prices or some combination just to serve the needs and desires of individuals.  What individuals ask for, companies in a free society provide. Governments on the other hand can operate by command and control and require individuals to pay for services that they may not want or do not feel are of high quality.  Governments can also protect certain corporations from competition, undermining the need of the corporation to serve consumers.  In these instances, the corporation need only serve its government partner to preserve its power to command consumers to purchase its products.  Many utility companies and local cable operators operate this way.  These are not true corporations, but government-corporate partnerships, and the arguments that corporations already “give back” likely do not apply to these command-and-control government-corporate partnerships.  

Corporations also educate.  They educate their employees in how free individuals come together to cooperate to produce a good or service.  This work — this employment — is educational in that it teaches individuals how to be part of a team, how to build a product or service together, and how to manage scarce resources to respond to the wants and needs of consumers.  These cooperative exercises that constitute the work in any corporation large or small also educates some employees enough that they take their skills and start their own company.  This is a virtuous cycle of entrepreneurship that not only benefits individuals with education, but also by creating competition for employees, thus ultimately raising employee pay.  These benefit are not widely recognized by those clamoring for corporations to “give back”.