Mayonnaise is for spreading on sandwiches, not spreading socialism
What’s the social purpose of mayonnaise? To answer that question, it’s best not to consult anyone at Unilever PLC, the London-headquartered multinational consumer goods company that owns Hellmann’s, the producer of Hellman’s mayonnaise. You’ll get the wrong answer. See, for example, Unilever CEO Alan Jope’s declaration in 2019 that “every Unilever brand will be a brand with a purpose” beyond just, in the case of mayonnaise, making food tastier.
Jope was referring to the “social responsibility” or “social purpose” of business. His comments were in line with the times; 2019 was also the year of the Business Roundtable statement signed by 181 CEOs of major American companies, which declared that the purpose of a corporation is to deliver benefits not only to shareholders but to society at large, since everyone in society is a “stakeholder” in corporate activity.
Milton Friedman famously warned against such subversive ideas in his famous New York Times essay in 1970, titled “The Social Responsibility of Business Is to Increase Its Profits.” When businessmen “declaim that business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends,” Friedman wrote, they are “preaching pure and unadulterated socialism.” Indeed, if private property must be used for social purposes, then private property essentially belongs to society. That’s socialism.
To return to the question on the purpose of mayonnaise, the answer was provided by erudite British fund manager Terry Smith in a recent letter to investors in his £29 billion equity fund. “A company which feels it has to define the purpose of Hellman’s mayonnaise has, in our view, clearly lost the plot,” Smith wrote, according to the Daily Telegraph. “The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert—salads and sandwiches).”
Quite so. The purpose of mayonnaise is to make salads and sandwiches tastier. It has nothing to do with stopping global warming, increasing gender equality, protecting forests or achieving any of the other goals listed on the corporate social responsibility section of Unilever’s website. The company’s obsession with environmental and social goals, Smith told investors, is “ludicrous.”
Importantly, under Friedman’s shareholder (not stakeholder) capitalism model, it’s only if mayonnaise fulfills its purpose of satisfying customer tastes that anybody will make money selling it. Again, the social purpose of mayonnaise is to make salads and sandwiches tastier; the social responsibility of business is to increase its profits. Notice that the two statements say the same thing. Under the capitalist system, tasty mayonnaise is good for both customers and shareholders.
Alas, as the Business Roundtable statement showed, many business leaders reject their responsibility to focus on increasing profits and are instead substituting obligations to other “stakeholders.” Or at least, that’s what their public statements indicate. It does not follow—thankfully—that CEOs who preach socialism necessarily practise it. An analysis by two Harvard researchers suggested that most CEOs who signed the statement did so just for show.
In Canada, too, the business community does a great deal of socialist preaching, much of it by organizations connected to the Coalition for a Better Future, a band of more than 120 organizations including national and regional chambers of commerce, boards of trade, and business councils. Like the Business Roundtable, the coalition is committed to the stakeholder capitalism model. So don’t bother surveying any of them about the purpose of mayonnaise. They would probably give the wrong answer.