What role does business have in addressing income inequality?
Does the way in which we now ask this question risk a gradual shift that wrongly pulls the focus away from its proper subject, which is the duties and policies of the regulatory state?
How did I arrive at these remarks?
1. Very few reasonable people would dispute that income inequality (globally, and within various countries and cities) is a major issue of our time.
2. Very few business leaders would dispute the trend towards greater interest in / scrutiny of the social impact of business practices by social, consumer, market / investor and regulatory stakeholders.
Yet it is not particularly obvious, putting 1 and 2 together as issues, that one aspect of being a responsible business is to take steps to address income inequality -- a highly complex policy puzzle and socio-economic phenomenon (insofar as I understand it myself... ), one not easily fixed by simply appealing, for example, for greater bona fide corporate adherence to national taxation regimes.
At very least, is it not obvious that compliance by business with fundamental human rights standards (or even some fulsome embrace of these norms, beyond mere compliance) would necessarily have any real impact on income inequality.
Approached in terms of the legal standards that comprise the global human rights architecture, sure, there are perhaps some issues for example around wage levels that would differentiate 'employment' from 'servitude'.
I am sure that a case can be made that better performance by business actors on recognised human rights standards might materially improve (narrow) the income inequality margins.
I just do not think that case has been made yet, or properly, or fully.
At very least, I think arguments that put 'business and human rights' and 'income inequality' together are at risk of positioning human rights as some kind of magic policy fix-all, as is often the case. So that we get arguments (in effect) that if one just applied a human rights lens to climate change = fix! (see here). Or if one just looked at income inequality from a business-human rights perspective = fix!
These comments of mine are no doubt full of holes, but are prompted by the otherwise unobjectionable and agreeable remarks of a leading scholar on business and human rights in a recent post in The Conversation: here.
Academics can (and sometimes should) be advocates. Yet they can (and often should) also be nit-picking and devoted to accuracy. In this post I am probably at risk of being seen at best as overly nit-picking, or at worst as an apologist for business.
Instead my only point is the nit-picking one that it hardly seems self-evident that if more businesses ensured their operations did not violate human rights standards (as I understand these in terms of present international law), that this would affect income inequality in a meaningful way.
Income inequality matters -- no doubt. But human rights vocabularies, standards, strategies, lenses, frameworks, etc., are not necessarily the secret to addressing this endemic and worsening issue. Nor necessarily is it the role of business to address that issue, lest we let the state and policymakers off the hook (and inadvertently ascribe far greater social influence to business than is proper or prudent).
The current fashion of focusing on business's own responsibilities can sometimes have that effect. On income inequality, it is ultimately the state that matters, and while we must demand all sorts of things of 21st century business and finance, it is the state first and foremost that has the duties and powers to attempt to address the problem of income inequality.
Jo
See previous more practical, less nit-picking posts on this issue in 2014 and 2015 around the time of Davos with its focus on income inequality: here.
