Chicken giant or giant chicken?

That is the question conservative mentators are asking this week as news broke that restaurant chain Chick-fil-A, known for being closed on Sunday due to its owners’ Christian values, announced that it will no longer support the Salvation Army and the Fellowship of Christian Athletes. Both organizations — the former of which, notably, is not simply a charity but a Christian denomination — have been labelled anti-LGBT by activists due to their hiring practices.

Chick-fil-A tried to reassure supporters that they would still donate to organizations that do charitable work, but disappointment could not be prevented and the outcry came swiftly. To take just one example, here is Rod Dreher writing at The American Conservative:

For a lot of us, Chick-fil-A’s quiet, cheerful resistance was a model of how to hold on to your Christian values, in spite of progressive spite, and still succeed. Quality work and a good product will always win out, even over left-wing prejudice. It was possible to look at Chick-fil-A and draw that conclusion … until today.

Dreher continues to warn that now “middle-class respectability”

… will be denied to Christians who remain faithful to Biblical teachings on sex and sexuality. You had better get that learned right now, Christian. You aren’t going to be able to hide. You might be able to make a good living in your field — Chick-fil-A certainly has been — but you will always be an outsider.

I’m not sure whether or not he’s right. He’s been saying some variety of this sort of thing for years in reaction to various news events. Perhaps each one is a step farther down that road. I don’t know.

What I do know is that I had a very different reaction to this news. I was disappointed to learn that Chick-fil-A was donating, and would still be donating, to any charities. That’s not their job.

To be clear: I like Chick-fil-A. I and my family eat there on occasion, and I have more than once driven up to their drive-thru on a Sunday only to be disappointed, but then, after the disappointment subsided, once again impressed that they really try to run their business based on their values.

That’s fine, even admirable, so far as it goes. But how far should it go?

On the flip side of this conversation, while progressive activists have been fortable with Chick-fil-A for years, there are plenty of businesses who virtue-signal different values all the time. The Christian values capitalism of the right is simply the mirror image of the “woke” capitalism of the left. I’m not a fan of either. As Dreher put it, “Sometimes a delicious chicken sandwich is just a delicious chicken sandwich.” That sometime is all the time for me. I don’t care about the politics of businesses. I care about the quality of their products, the cleanliness of their establishments, the way they treat their employees, and so on. And at the end of the day, I drink Starbucks coffee, for example, for the same reason that I eat Chick-fil-A sandwiches: It’s delicious. That’s all they need to sell their products to me.

Once again, I’d rather businesses didn’t donate to any charities at all. In addition to being a better PR strategy, I actually think they have a responsibility not to. Why? Milton Friedman gave the answer in his long-maligned and rarely read 1970 New York Times Magazine essay, “The Social Responsibility of Business is to Increase Its Profits”:

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary [i.e., charitable] purpose — for example, a hospital or a school. The manager of such a corporation will not have money profit as his objectives but the rendering of certain services.

In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.

So how does this relate to corporations giving to charities, whether right-wing, progressive, or otherwise?

Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily — to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country…. If we wish, we may refer to some of these responsibilities as “social responsibilities.” But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not business.

Should a corporation — and thus the person or persons who manage that corporation — forego profit for the sake of some laudable social causes as a matter of a perceived “social responsibility”? Friedman continues to tease out the implications:

In each of these cases, the corporate executive would be spending someone else’s money for a general social interest. Insofar as his actions in accord with his “social responsibility” reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employees, he is spending their money.

The stockholders or the customers or the employees could separately spend their own money on the particular action if they wished to do so. The executive is exercising a distinct “social responsibility,” rather than serving as an agent of the stockholders or the customers or the employees, only if he spends the money in a different way than they would have spent it.

But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other.

So what’s the problem with this?

Here the businessman — self-selected or appointed directly or indirectly by stockholders — is to be simultaneously legislator, executive and jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds — all this guided only by general exhortations from on high to restrain inflation, improve the environment, fight poverty and so on and on.

This is not to say that one ought not to care about any given social issue, but rather that one should not expect businesses to care about those issues for you:

The difficulty of exercising “social responsibility” illustrates, of course, the great virtue of petitive enterprise — it forces people to be responsible for their own actions and makes it difficult for them to “exploit” other people for either selfish or unselfish purposes. They can do good — but only at their own expense.

The more people outsource virtue to virtue-signaling businesses, the less resources they have to act virtuously themselves, no matter whether their moral vision is conservative, progressive, or otherwise.

Friedman insightfully explores the motivations and incentives for this sort of activist business “social responsibility” as well:

To illustrate, it may well be in the long-run interest of a corporation that is a major employer in a munity to devote resources to providing amenities to munity or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the laws about the deductibility of corporate charitable contributions, the stockholders can contribute more to charities they favor by having the corporation make the gift than by doing it themselves, since they can in that way contribute an amount that would otherwise have been paid as corporate taxes.

In each of these — and many similar — cases, there is a strong temptation to rationalize these actions as an exercise of “social responsibility.” In the present climate of opinion, with its widespread aversion to “capitalism,” “profits,” the “soulless corporation” and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified on its own self-interest.

It would be inconsistent of me to call on corporate executives to refrain from this hypocritical window-dressing because it harms the foundation of a free society. That would be to call on them to exercise a “social responsibility”! If our institutions, and the attitudes of the public make it in their self-interest to cloak their actions in this way, I cannot summon much indignation to denounce them. At the same time, I can express admiration for those individual proprietors or owners of closely held corporations or stockholders of more broadly held corporations who disdain such tactics as approaching fraud.

That’s where I sit on the matter as well. Companies are incentivized, sometimes through market considerations, sometimes through law, to make such donations. I get it. It makes sense. But I too admire those “who disdain such tactics as approaching fraud.”

Furthermore, I would point out that such public relations mishaps, whether from “woke” capitalists like Gillette or “Christian values” capitalists like Chick-fil-A, could have easily been avoided had panies simply focused on the “one and only one social responsibility of business,” to quote Friedman one last time: “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 petition without deception or fraud.”

In other words, if you care about various causes, actively support them yourself. The social responsibility of Chick-fil-A is to make delicious sandwiches.

Image credit: Chick-Fil-A’s signature chicken sandwich by J. Reed

More from Acton

Acton research associate Dan Hugger recently interviewed Rev. Robert Sirico on the subject of “woke” capitalism for Acton Line. You can listen to that podcast here: