Should business have a purpose?

Business is not separate from society.

In February the Public Services (Social Value) Act came into force. The Act very simply requires public authorities to procure services in a way that generates social value. This was a piece of Tory legislation (gasp), so well done to Chris White on seeing his private members bill through to the end.

Social Value seems a long way away from the capitalism of the 1970s and 80s when Milton Friedman famously wrote in his book Capitalism and Freedom: "there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

This is often condensed into the “business of business is business” quote. This finds clear resonance in the UK Companies Act where the goal of business is to maximise profit for shareholders.

Apologists for Abstract Expressionism in New York in the early 20th Century, Alfred Barr and Clement Greenberg, made strenuous claims that painting was about surface and colour and nothing else, getting rid of the difficulties of subject matter. Like those art critics, doesn’t Friedman’s abstract view strip business activity of all sense of production, all politics and all purpose, leaving it to do its own thing and have no particular social relevance? Such commentary allows for a discussion of business in the absence of any knowledge of what they actually do and what impacts they may have.

Isn’t it just very convenient to isolate business from society when society isn’t very happy with it and is losing a strongly-held faith in the world of business? 

The Edelman Trust Barometer for 2013, which surveyed over “31,000 respondents in 26 markets around the world and measured their trust in institutions, industries and leaders”, opens with the words:

“The 2013 Edelman Trust Barometer demonstrates a serious crisis of confidence in leaders of both business and government.”

The Barometer shows that whilst trust in institutions including businesses rising modestly, the quality of that trust is feeble: the respondent’s category for “Trust a great deal” is at 16 per cent in government and 17 per cent in business and media.

This is pretty lamentable. Business is not separate from society; it is a social activity, literally being busy. To make this clear, the now well-worn quote of Bjorn Stigson, when president of the World Business Council for Sustainable Development, that “businesses do not succeed in societies that fail”, needs to be read alongside the Kofi Anan comment that it is the absence not the presence of business that has condemned the much of the world to poverty. 

We have started to see the emergence of a new sense of entrepreneurship which is increasingly called responsible capitalism in the shape of businesses and social enterprises that combine a sense of social or environmental purpose with profit. We can see this in the Social Value Act. How long, we might wonder, before it is common practice for all organisations to think about the social value they create. Would then the Companies Act, instead of enshrining the purpose of business to be profit maximisation whilst nominally nodding at the needs of society and the environment, in fact require businesses to have a purpose in society and, in fulfilling that purpose, they should of course make a profit. 

That might make people trust businesses more; it might make people feel that instead of being self-serving, businesses are in fact part of society.

Richard Spencer is Head of Sustainability at ICAEW.

Photograph: Getty Images
Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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