Episode 91 · 2021-07-23 · 49:44 · Original in Finnish
Corporate Responsibility and Wokenomics | Thomas Taussi | Negotiator 91
Originally published as “Yritysvastuu ja wokenomics | Thomas Taussi | Neuvottelija 91”
The Aalto University researcher Thomas Taussi argues that Milton Friedman's classic 1970 essay has been widely misread. Friedman did not dispute the importance of stakeholders and did not condemn all corporate social responsibility — he criticised one particular doctrine, in which a company's resources are spent on activities with no purpose of supporting the business. The episode's load-bearing observation is conceptual: responsibility sets itself no limits and does not explain itself, with the consequence that almost anything can be pursued under its cover. Taussi locates the source of his own scepticism precisely — the question is not whether the goals are good, but whether limits can be set at all on things that depart from the core business. The examples include Neste Oil's biofuel turn, Stora Enso's China venture, the Finnair deportation controversy, the Google and Apple dismissals, and Basecamp's depoliticisation.
Core theses
- The criticism is conceptual rather than political: a term that sets no limits on itself can be used to justify almost anything, whatever the merits of any particular goal.
- Friedman's essay criticised one doctrine and is routinely read as condemning all corporate responsibility, which is a misreading with consequences.
- The real question is not whether the aims are good but whether any limit can be set on departures from the core business — and nobody in the debate has proposed one.
- Costly signalling explains why the most visible responsibility measures are often the least efficient ones, which is Veblen's argument applied to a modern setting.
Watch and listen
Key moments
- 00:00 — Opening teaser: the limits of responsibility, and the Finnair deportation controversy
- 01:41 — Thomas Taussi, and the profit purpose in the Companies Act
- 02:52 — Friedman's 1970 essay has been misunderstood
- 04:29 — Responsibility as a fashion, and the five foundations of a business
- 06:41 — Influence or responsibility: Neste Oil's biofuel strategy
- 08:47 — Wahlroos's three-way split: markets, democracy and hierarchy
- 10:29 — Transparency in the division of power, and ideological agendas inside an organisation
- 12:43 — The UN sustainable development goals, Stora Enso and Kemijärvi
- 16:33 — Wokenomics: Google's James Damore, and the Apple case
- 19:23 — Responsibility as a cloud of concepts: Finnair and Finnwatch
- 21:24 — A chief executive's weak protection, and minimising reputational damage
- 22:53 — Basecamp and Coinbase: the depoliticisation of a company
- 24:27 — The chief executive as moral compass in the Trump era
- 26:50 — Business leaders as advocates for the EU recovery package
- 28:34 — A concept that sets no limits: useful practice or end in itself
- 30:49 — ESG standards in a listing, and impact investing
- 33:15 — Cognitive diversity, and the mythical spread of practices
- 36:03 — The EU taxonomy: nuclear, hydro, and the lesson of wind
- 38:17 — Choosing the rapporteurs, and parliamentary transparency
- 40:45 — Costly signalling: the peacock, private jets and diversity departments
- 44:29 — Friedman's paradox: fear of pressure groups, and paying the ransom
- 46:53 — The positive brand of the market economy, and closing words
Summary
The Aalto University researcher Thomas Taussi argues that Milton Friedman’s classic 1970 essay has been widely misread. Friedman did not dispute the importance of stakeholders and did not condemn all corporate social responsibility — he criticised one particular doctrine, in which a company’s resources are spent on activities with no purpose of supporting the business. The episode’s load-bearing observation is conceptual: responsibility sets itself no limits and does not explain itself, with the consequence that almost anything can be pursued under its cover. Taussi locates the source of his own scepticism precisely — the question is not whether the goals are good, but whether limits can be set at all on things that depart from the core business. The examples include Neste Oil’s biofuel turn, Stora Enso’s China venture, the Finnair deportation controversy, the Google and Apple dismissals, and Basecamp’s depoliticisation.
A conceptual objection, not a political one
Taussi is careful about where his scepticism sits, and it is worth preserving: he is not arguing that the goals pursued under corporate responsibility are bad. He is arguing that the term sets no boundary on itself, so it cannot distinguish between a good use and a bad one — and a concept that cannot exclude anything is doing no work.
What Friedman actually wrote
The 1970 essay attacked a specific doctrine: spending the company’s resources on activities with no purpose of supporting the business. It did not deny that stakeholders matter. The difference between those two positions is most of the argument that has been conducted in Friedman’s name ever since.
Why the visible measures win
Costly signalling predicts that the measures which are expensive and legible will be preferred to the ones that are cheap and effective, because the point is the signal. It is Veblen’s argument and it explains a pattern the episode’s own examples display.
Watch
The recording lives on the Neuvottelija channel: Yritysvastuu ja wokenomics | Thomas Taussi | Neuvottelija 91. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
Go deeper
People and topics
Guests: Thomas Taussi
Topics: Leadership & Governance Ownership, Capital & Tax Free Speech & Society