What’s the role of business in society?
Corporations have an opportunity to step up and become problem solvers in their community, says Allstate CEO Tom Wilson.
Business has always played a vital role in our society. Think of the businessmen who helped create modern America: the legendary captains of industry like J.P. Morgan and Henry Ford, whose U.S. Steel and Ford Motor Company provided the foundation for extraordinary growth and prosperity, and literally helped build the country.
Today, businesses have a great opportunity not only to create the jobs that power our economy and to make the products that make our lives easier, but to help shape our communities, says Allstate Chairman and CEO Tom Wilson. He calls it an opportunity.
“This is a market that’s wide open, because our pile of problems keeps growing in America, whether it’s poverty, education, or inequality,” he said, speaking on stage last week at Washington Ideas. The Washington, D.C., event—which brought together the nation’s leaders in politics, business, science, and culture—was underwritten by Allstate. (The Renewal Project is made possible by Allstate.)
This is where businesses can play a vital role, he said, by harnessing the assets that make them so successful in the first place—the ideas, people, resources, and capital. Businesses can step in where governments and nonprofits can’t.
“Governments, NGOs, nonprofits—they’re working as hard as they can,” but, he said, their resources are limited and society’s problems aren’t getting any smaller. That’s where businesses can use their expertise.
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Wilson challenged the idea that businesses’ only goal is to earn money for its shareholders, an idea championed by economist Milton Friedman, one of the most influential scholars on this topic.
Speaking with journalist Ellen Shearer of the Medill School of Journalism at Northwestern University, he called out Friedman’s philosophy by saying it’s not what Americans want, and it’s not what businesses are good at: “What businesses really do is we create prosperity,” he said. “We take iron rocks and make skyscrapers; we take molecules and make life-saving drugs. Governments don’t do that, NGOs don’t do that—they play vital roles in society … but we ought to recognize that we do more than just make money.”
Wilson, who was recently named chairman of the U.S. Chamber of Commerce, the largest business lobby in the United States, has been at the forefront of supporting the idea of the evolving role of business in society. He penned an op-ed in The Washington Post last year on how corporations have an opportunity to be a force for good in their communities—which is in turn also good for business. Here is an excerpt:
The corporation of the next 100 years must take on societal problems. On their own, governments, social service and charitable organizations simply do not have the capabilities and resources to solve the problems of inadequate education, poverty or public fiscal insolvency. And most people agree: In a recent survey, 87 percent of young Americans said corporations should do more than just make money.
Last month, Wilson also spoke on a panel with Chobani CEO Hamdi Ulukaya at the CEO Initiative, which highlights “companies committed to addressing major social issues as part of their core business strategies.” Watch that full interview here.
And watch the full discussion at Washington Ideas below: