While it is easy to understand the contrarian appeal of this claim – how ironic that the instinct to do good resulted in doing bad; if only they had stuck to greedily pursuing profit maximisation – it is nevertheless utterly absurd. The lack of any evidence in Chrystia’s article, beyond the fact that both BP and Goldman Sachs have long been seen as leaders in the CSR movement, is telling. We are only surprised that she overlooked the fact the Toyota has also been found wanting in its core product quality, despite its public association with greenery. Three prominent failures by CSR leaders would have met any journalist’s definition of an ‘indisputable trend’.

Let’s consider BP and Goldman Sachs in turn. The exact chain of events that led to BP creating America’s (probably) worst environmental catastrophe remain to be seen. Certainly, individual errors will be found, and corners were probably cut. Yet it is also clear that the rest of the oil industry drilling in the Gulf were as equally unprepared to deal with such a spill as BP, even those – as Chrystia presumably prefers – most committed to maximising profits regardless of the cost to the environment. All of them seemed to believe that walruses would have to be rescued in the event of disaster in the Gulf, because they had simply copied disaster response plans designed for colder parts. As The Economist reported, according to Amy Myers Jaffe, an oil expert at Rice University, the industry’s strategy on blowouts was not to have them, rather than to work out how to put one right quickly. Surely no one believes that a strategy based on zero failures is prudent.

It is true that, according to BP board member Walter Massey, its espousal of CSR did buy the firm time and greater leniancy than it might otherwise have received after the fatal accident at its Texas refinery. “The company’s reservoir of goodwill, built up over years of committed corporate stewardship, was of critical aid in helping us to weather the storm,” he said in March. But there is no suggestion that this led the firm to think it could get away with anything.

Moreover, after the initial thrill of an oil major declaring the need to go “beyond petroleum” to stop climate change, the CSR movement’s enthusiasm for BP had waned long before the recent disaster. In particular, BP had been criticised for silo-ing its renewable energy activities away from the firm’s mainstream activities, and for increasingly putting financial performance ahead of everything else. Ironically, one of the justifications for replacing Lord Browne with Tony Hayward was his lordship’s lack of technical experience.

Financial short-termism seems the likeliest explanation for the problems of Goldman Sachs – though there is again no evidence to suggest that the Goldman’s commitment to social responsibility played any part in the financial crisis nor the unpopularity of the Wall Street bank after it. Goldman actually exposed society to less systemic financial risk than its rivals, including Lehman Brothers, Bear Stearns and Merrill Lynch. Ripping off customers – for which it has just agreed to pay a large settlement to the SEC, without admitting any fault – is easier to attribute to sacrificing long-term reputation for short-term profits than it is for being blindsided by the urge to be socially responsible.

Unlike BP’s recognition that it needs eventually to move beyond petroleum if it is to survive, the 10,000 Women campaign launched by Goldman Sachs, though brilliantly designed and executed, can hardly be viewed as core to the bank’s business strategy. In that respect, it is somewhat at odds with the trend in the CSR movement to focus on the sort of doing good that helps the firm do well. (And, let’s be clear, there are plenty of things to criticise the CSR movement for – just not the things that Chrystia claims.) Goldman Sachs is notable in doing its corporate philanthropy, and encouraging the personal philanthropy of its staff, in ways that entirely ring-fence them from the every day business of making money.

Indeed, the main reason Goldman Sachs is so unpopular today is surely that it made so much money after the financial crisis, and paid its staff such large bonuses. In this respect, it failed to recognise that the world had changed – that the public had bailed out the banking industry, Goldman Sachs included, and in return expected some evidence of gratitude and remorse for the events that had made the bail out necessary. From Goldman Sachs, it got neither.

It is our belief that a firm that had been more attuned to society and more committed to engaging with it constructively – the main goals of the CSR or corporate citizenship movement – would have been far less likely to make the basic mistakes that Goldman Sachs did, the costs of which are only starting to become clear. As we have said many times, the firm would have done far better, even in PR terms, if it had paid far smaller bonuses and given away far more of the money. (A more core strategy, for the longer term, would be to use its undoubted financial skills to do good, for example by helping to develop the nascent social investment market.

Rather than justifiying Chrystia’s dismissal of CSR, the failings of Goldman Sachs and BP underscore the need for firms to take their engagement with society more seriously, and to put being on the right side of social progress at the core of their long-term profit-making strategy. A firm that did this would not cut corners with safety or show so little gratitude to taxpayers for helping it survive.

Rather than criticise firms for being part of what Chrystia calls the “cult of CSR”, we should be figuring out how to destroy the cult of financial short-termism in the business world. (Our new book, The Road From Ruin, has some suggestions for doing that!) Admittedly, the conclusion that firms need to get better at CSR, and pinning the blame for BP’s oil spill and Goldman Sachs’s errors instead on short-termism, lacks the contrarian appeal of attacking CSR. But it does at least have the ring of truth.

You can see why we have got Wayne’s goat so much, since he thinks that capitalism “has fuelled the culture of greed and excess that tipped us into a global recession” and that corporate social responsibility (CSR) “should be about how you make your money, not whether you give it away once it’s made”.

Maybe we can tempt Wayne to actually pick up the book by pointing out that he is largely agreeing with us. Philanthrocapitalism is about the way that entrepreneurial wealth creators, in their business life as well as their private giving, increasingly recognise that capitalism is only sustainable in the long term if it takes account of the social and environmental sustainability of the system. Greedy short-termism is bad capitalism. Not all business leaders understand that, but we are encouraged that more and more are doing so. That’s why we call them philanthrocapitalists.

Wayne says he won’t read the book “unless someone holds an (ethically sourced, fairtrade) gun to my head”.  Now there’s a promising idea for a for-profit/non-profit CSR partnership between Amazon.com and the National Rifle Association.

First up, Ray Anderson, chairman of eco-friendly carpet company, Interface, told how he had met WalMart’s boss, Lee Scott, shortly after he had decided to change the firm’s culture to embrace the fight against climate change. We describe this conversion in the book, in the chapter on The Good Company. Anderson said a year later he again met with Scott, who told him that when he had talked about culture change he had no idea what a powerful force he was unleashing. Anderson’s book, Mid-Course Correction, about how he got the eco bug at the age of 60 is highly recommended.

Then WalMart’s Personal Sustainability Project for employees was lauded by Haas Business School professor, Kellie McElhaney, who has just published an interesting book, Just Good Business. She waved a pack of cards, each containing tricky environmental questions, that WalMart has given to employees as educational tools. Another speaker pointed out that over 500,000 WalMart employees are now participating in the PSP.

Yet another speaker, whjose own corporate foundation giving is expected to decline this year, noted enviously that WalMart has just announced that its annual corporate giving will rise from around $300m to $400m. So much for the recession.

Finally, the closing keynote speaker, Jeffrey Hollender, boss of eco-friendly household products firm, Seventh Generation, said that, after three years of conversations with the company and especially chief executive Scott, he had decided to reverse his ban on letting Seventh Generation products be sold at WalMart. The firm still has a massive negative footprint, but it is “now moving on the right trajectory”, said Hollender. Ultimately, he forsees deep tensions between WalMart’s newfound environmentalism and its commitment to “every day low prices”. But, for now, it is getting better fast. Moreover, he says, WalMart is the only big retailer he knows that would let him criticise them in public without getting upset. He has even offered to go on the WalMart board to help it work through its remaining eco-challenges – an offer politely turned down by Scott. Still, now Scott has announced his departure, his firm’s culture well on its way to being transformed, perhaps the new boss will welcome a veteran green activist in the boardroom? Or, less happily, will a change at the top bring this culture change to an abrupt halt? Let’s hope not.

Georgia thinks we should have given more attention to the question: “Is the “new” philanthropy really even “new”?”  She thinks this is an important issue because, in her opinion, we underplay the past achievements of foundations. We have never argued that we are at some kind of ‘year zero’ in philanthropy.  Indeed, by looking at the history of modern philanthropy, going back to the Renaissance, we have been keen to empasise the innovations of the past, including the achievements of American foundations like Rockefeller and Ford in the 20th century.  But there is still a reluctance among today’s established foundations to acknowledge the effectiveness problem, which is eloquently spelled out in Joel Fleishman’s outstanding book The Foundation: a great American secret (we make no apologies for plugging this again).  By saying that traditional foundations need to raise their game and that a bit of competition can’t hurt, we seem to have upset the philanthocracy establishment.

Georgia makes the excellent point towards the end of her article that “there are things that foundations do that would be very interesting to businesses—taking a long-term approach, taking a more holistic approach, attacking problems from multiple angles, learning about qualitative measurement.”  This absolutely right and, as we discuss in the chapter on ‘The Good Company’, this is what smart companies are starting to do, moving away from PR-driven corporate philanthropy to really seeing CSR as a strategic part of business success. For us, that is a key part of philanthrocapitalism.

As we note in the book, in our chapter on “The Good Company”, Nike now has 75 full-time employees inspecting factories and working with its suppliers to ensure they meet agreed labour standards. The firm conducts unannounced factory audits in partnership with the Fair Labour Association, a non-profit, and a typical garment factory in Nike’s supply chain can expect around 25 visits a year from inspectors.

Whether Nike’s brand is completely free of its old taint, despite all these efforts, is debatable – which goes to show how companies ignore social issues at their peril, especially when they have a consumer brand. A reputation once lost can be fiendishly hard to restore. But today many consumers certainly regard Nike as a cool brand, including in many developing countries.

Which brings us to the example of how companies can make a difference. A few years ago, government campaigns to fight the spread of HIV/Aids by promoting safer sex were failing badly in South Africa because young men regarded it as uncool and unmanly to use a condom. So the government approached Nike and asked if it could try to leverage its brand to spread the message – Nike apparently being taken far more seriously by the target audience than the government.

The result was a marketing campaign that was a win-win-win for the government, the firm and society. No, the slogan was not, “Don’t Just Do It – Put On a Condom First!”, but “Our Greatest Opponent is One We Cannot See” – and as you can see here, the ads are extremely powerful. They have certainly helped to change behaviour: a good example of effective philanthrocapitalism that would not have been possible in a world without corporate brands.

Opposing the motion, John Ruggie, of Harvard’s Kennedy School, and Bennett Freeman, of the social investment firm Calvert, argued that, whilst Milton Friedman’s claim that “the business of business is business” might make sense in a perfect world, it does not do so in the imperfect world in which businesses actually operate. If governments do not adequately address social ills – which is often the case, especially in the emerging economies – then business must. Moreover, Ruggie argued that the rise of the corporate social responsibility movement in recent years has been a direct response to the more laissez-faire government policies toward business of the past 30 years. He also predicted that the pendulum is now going to swing back toward greater government oversight of business, which seems more than plausible.

The debate trod much the same ground as the recent online conversation about Bill Gates’s theory of “creative capitalism”.

One puzzle is how those who support Friedman’s line, because it helps deal with the agency problems rife in business (ie. how do owners get managers to act in their best interest?), seem to care so little about the agency problems rife in government, even in democracies (how do voters get politicians to act in their best interest?). Yet to admit that government can and does often fail is surely to concede that the world is too complicated for a simple rule like “the business of business is business” to be of much practical use.

In the book, we argue that companies can play an important role in philanthrocapitalism, but that what they can do to solve society’s problems is necessarily constrained by the fact that they need to make some money rather than just give it away, like individual philanthropists such as Gates.

What is needed now is a pragmatic, practical debate about the most effective division of labour between firms (public and private), government, mass charities and philanthropists, and which roles each should play in the partnerships that will often be the best way to get things done.

Instead of black and white ideological positions, this is the time for a flexible, empirical approach focused on finding out what works. Where better to start than two examples of effective corporate citizenship cited by Freeman during the debate, which we discuss in the book: the different approaches to the threat of climate change recently taken by two of the world’s biggest companies, General Electric and WalMart?

Neither of these firms have traditionally enjoyed a reputation for good corporate citizenship, yet both are now embracing a green strategy driven largely by its potential to make them money. Of course, there will be many situations where doing well and doing good will be at odds with each other – in which case, yes, here’s hoping there will be some effective government intervention – but it is surely worth encouraging firms to look for what ought to be the low-hanging fruit of opportunities to do well by doing good.

If we are right, companies will be far less likely to cut these activities at the first sign of economic difficulty – unlike traditional corporate philanthropy, which has often been top of the list for budget cuts in a downturn. Instead, firms will view their corporate citizenship spending as akin to their investment in research and development – that is, something to be cut only as a last resort.  (Matthew recently wrote a piece for CFO magazine setting out three rules for smart corporate citizenship.)

So, now we will find out the truth, thanks to the current downturn. Happily, there are some encouraging signs. This week, Starbucks announced that it will be continuing to invest in communities where its coffee is grown. “During this time of economic uncertainty we realize that we have the opportunity and the responsibility to keep our focus on our commitment to keep our communities strong, and I’m proud of what we’re doing to live up to the guiding principles of this company,” said Howard Schultz, the firm’s chief executive, at Starbuck’s Leadership Conference this week.

True, it remains to be seen if the coffee giant’s behaviour matches these words, but Starbucks is off to a good start. Here’s hoping other companies follow suit.