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The Boston Globe

Ideas

Virtue Inc.

Can the new “benefit corporation” charters give companies a conscience?

In 1776, Adam Smith wrote, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” He was summing up the key insight of capitalism: Allowing economic actors to pursue selfish goals also benefits society as a whole. In the intervening centuries, that insight has helped unleash humanity’s productive capacity like never before.

But an epigram does not a perfect economic system make. The consequences that follow when economic actors—especially massive global corporations—pursue narrow self-interest are written all over contemporary history: the financial meltdown, the BP oil spill, the working conditions in overseas factories. The village butcher, brewer, and baker still had to look you in the eye every Sunday on the way to church. The drivers of global capitalism do not.

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