At this time of the year, many of us are giving presents out of benevolence, goodwill, appreciation, and love—and for those reasons only, I hope. Gifts are a means of showing that we value their recipients in some way, whether as friends, loved ones, or charitable causes or organizations.

Giving gifts out of duty is not part of a rational person’s relationship with others. Giving out of duty is motivated by altruism: sacrificing ourselves for others, giving up higher values for lesser values or non-values. It is not in our self-interest to give to destructive organizations such as Greenpeace or the United Nations that undermine human survival and well-being, or to people who we do not care about or who want to harm us. Such giving undermines our ability to live and flourish, and takes away from those whom we value to those who we do not.

Looking at it from the flip side: how would you like to receive gifts given out of duty? We should give gifts that are consistent with our values—only such gifts enhance our lives and those of their recipients. (Charitable giving is optional: choosing to give to a charity you deem worthy an amount that you can afford is consistent with your interests, but it is not a duty.)

What about giving by business? Calls for business to “give back” are made all the time in the media and elsewhere but tend to get louder at this time of the year. These calls are also motivated by altruism: business firms are asked to sacrifice some of their profits for various charities and people who presumably need those profits more than the firms’ shareholders do.

Companies should reject the demands to “give back” to society on moral grounds: they do not owe society, charities, or people in need anything—and have no duty to “give back,” as they did not receive anything in the first place. Profits they make come from their production and trade of material values.

On the contrary, we owe gratitude to business firms for doing what they do best: producing and trading. Thanks to companies such as Apple, Google, Microsoft, Pfizer, Southwest Airlines, Wal-Mart, we have new, innovative, cheaper products and services—not to speak of job opportunities—that have made our lives immensely better than those who lived, say, before the Industrial Revolution or even a generation ago. We should not ask business firms to “give back” altruistically.  Instead, we should encourage them, by buying their products and services, to innovate, to produce, and to trade more, thus benefiting us all.

Should business firms give to charity at all? It depends.  I argue that companies should not give anything on altruistic grounds. They can choose to give (note: not “should”) to charities out of self-interest when it benefits their business, such as donating to the United Way to help build a stronger local community—in which their employees and often customers live. Giving to charities (that are not anti-business) can help build goodwill and employee and customer loyalty and even enhance a company’s reputation among investors and suppliers. This kind of ‘win-win’ giving is really a form of trade and therefore in the interest of both parties.

The bottom-line is: business should only give when it is in its self-interest. Giving is not a duty.

Originally posted 21 December 2012.

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