What is business for?

If you are a conservative, what are businesses for?

The answer to that rather innocuous, even naïve, question isn’t quite as simple as one might think. And finding an answer that chimed with the views of voters, particularly swing voters, was an essential challenge for the new Conservative leader in 2005 as he sought to modernise the Party and lead it out of the electoral wilderness.

For many years, when the ideas of the Austrian School of economics were dominant, if you’d asked a Conservative MP the answer to the question he (and they are still largely he) would have said, “It is to produce things and services, to provide jobs, deliver growth and make profits”. But is that is that really the limit of firms’ role in society?

It wasn’t until David Cameron became leader of the Party that it became possible for the centre-right to articulate a wider vision of the social value of business. This is, in fact, a reversion to a more classical conservative vision, derived from the Adam Smith of The Theory of Moral Sentiments rather than the author of The Wealth of Nations.

In this alternative vision, the role of business is primarily economic, but it does not stop there. Businesses are just another form of social institution, created by people in order to further human flourishing. They have a moral role that is an inescapable consequence of the fact that they are simply collections of humans and human knowledge. The ethical dimension of their activity is fundamental to their identity.

This rediscovery among conservatives of the wider contribution of businesses to society is by no means complete. Scour David Cameron’s speeches between 2005 and 2008 and you will find many references to the importance of firms showing social responsibility and contributing to the creation of a Big Society.

That refrain is much less frequent over the last five years because, inevitably, the financial crisis changed almost everything. The focus for all politicians, understandably, switched to the narrower and more urgent task of keeping businesses alive and jobs in place. However, in place of social value has been an equally important rediscovery of ideas of enterprise and entrepreneurialism as a counterpoint to widespread popular concerns about big business and corporate greed.

The debate raging over tax avoidance, whether from major multinational corporations or political donors, shows that even in hard times the ways in which business contribute to the social fabric of the nation is not understood simply in economic terms.

This is undoubtedly territory that the left finds more comfortable; their activists and politicians have always found it easier to justify a vision of business that goes beyond the pure bottom line, and have been prepared to use both the bully pulpit and regulatory cudgel to make them recognise their social responsibilities. But the priority given by both the Prime Minister and the Chancellor, George Osborne, in the domestic and international forums to clamping down on tax avoidance – where some drastic changes, previously unthinkable just 5 years ago, have been made in recent years – shows that there really has been a paradigm shift.

The consensus has changed. Yes, firms should be hiring, creating, innovating, growing and paying tax. But more than that businesses should be setting themselves wider goals so that, in pursuing their economic imperatives, they are contributing to broader set of social objectives that citizens value.

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