True Social Reponsability: Respect for Individual Rights

True social reponsability: Respect for individual rights

It follows that the social responsibility of the corporation, through its directors, managers, and other employees, is simply to respect the natural rights of individuals. Individuals in a corporation have the legally enforceable responsibility or duty to respect the moral agency, space, or autonomy of persons. This involves the basic principle of the noninitiation of physical force and includes: the obligation to honor a corporation's contracts with its managers, employees, customers, suppliers, and others; duties not to engage in deception, fraud, force, threats, theft, or coercion against others; and the responsibility to honor representations made to the local community.

In an individualistic society all contracts are entered into voluntarily. Each person is free to associate with others for their own mutually agreeable purposes. The corporation is a form of property created by individuals in the exercise of their natural rights. The corporation is thus the result of a contract between individuals who wish to combine their resources and, if desired, delegate a portion of the authority and responsibility for managing and using these resources. Managers therefore have the obligation to use the shareholders' money for specifically authorized shareholder purposes which can range from the pursuit of profit to the expenditure of funds for social purposes. If managers use this money for activities not authorized by the shareholders, they would be guilty of spending others' money without their consent, failing in their contractual obligation to the owners, and, therefore, violating the rights of the shareholders. Owners have a property right in the corporation and a correlative right to engage in profit-making, if so desired. It follows that those who act in their behalf (i.e., the managers) have a duty to carry out the wishes of the owners, who usually invest to make a profit.

Customers, employers, suppliers, and others autonomously negotiate for and agree to contract with the corporation. If managers were to break an agreement with the shareholders to maximize profits in order to give one or more groups more benefits than they freely agreed upon, they would not only be violating the rights of the owners, but also would not be respecting the autonomy of individuals within other groups. Corporations and their managers are obligated to respect the rights of individuals within each group but the rights are limited to the rights of parties in market transactions. The social responsibility of corporations is limited to respecting the natural rights of all individual parties.

Under individualism, knowledge tends to be viewed as fragmented and widely dispersed. Each person is free to choose among systemically produced rewards, punishments, and opportunities arising from other free persons without being subject to the articulated judgments imposed by the state or other collectivities. Individualists rely upon the power of historically-evolved, unarticulated social processes such as free markets, tradition, language, values, common law, etc., which are evaluated based on their systemic features such as incentives and methods of interaction. While exhibiting

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