The Oklahoma court that last week made an award of $572m against the pharmaceutical company Johnson & Johnson for its part in the state’s opioid epidemic may have been part of a much wider movement. This is not just a reaction to the drug companies whose pursuit of profit has ravaged much of rural America. That is part of it. Purdue Pharmaceuticals, which is owned by some of the Sackler family, had earlier settled with the same state for $272m. But the larger fine levied against Johnson & Johnson was justified on the grounds that the company not only oversold the pills itself but supplied the chemicals from which oxycontin is made, and so it was partially liable for the damage done by other sellers of the drug.
Such a judgment can be morally justified in this special case. That it should be legally justified as well is remarkable and will no doubt be subject to appeals. However those ultimately turn out, they raise a question which appears in one form or another all over the world today: what is the moral responsibility of capitalist enterprises? For the last few decades, the attitude has been that they have responsibilities only to their shareholders. This is sometimes attacked when these shareholders are identifiable as individuals, or even as a family: the Sacklers, the Kochs or the Zuckerbergs make satisfying targets for outrage. It is less often and perhaps less effectively attacked when the shareholders form an anonymous mass, perhaps because they are pension funds.
This consensus is now under attack from some unexpected quarters: last month the Business Round Table, a lobby group for 200 of the largest US companies, announced that shareholder value should no longer be the only purpose of a business. Instead, shareholders should take their place as one of many groups whom a business should expect to serve, alongside customers, workers, suppliers and communities. Of course, the statement says nothing about the order in which these groups are ranked; the fact that Amazon has signed up for it should be a reminder of just how little such declarations can mean to workers or to suppliers and subcontractors.
It would be wrong to discount entirely statements like the Business Round Table’s as hypocritical. Since hypocrisy is very often the tribute that vice pays to virtue, they show that the fashion in virtue is changing and that there is growing recognition that the pursuit of profit without reference to any other considerations is unethical. Adam Smith’s invisible hand is invisible mostly because it can only be brought into existence by government action and even social sanction.
Sometimes, too, virtue is rewarded. The Church Commissioners, which runs the Church of England’s substantial pension fund, claims that its refusal to invest in arms, drugs, gambling or environmentally damaging activities has actually produced better results than a more conventional approach. But this is only the beginning. At a time of mounting environmental and political strain, we need legal structures that will ensure that the costs of profitable businesses are fairly shared, and not all forced on to outsiders, workers, or anyone else who is not a shareholder.
