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Why Big Oil Spends Big on Non-Energy Issues

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Exxon Mobil Foundation, the philanthropic arm of the U.S. supermajor, invited a few dozen school-aged girls to check out their Texas headquarters as part of a 9th annual event meant to encourage more women to pursue a field in engineering. With woman making up about half of the U.S. workforce, the supermajor notes that only 14 percent of the engineering jobs in America are held by women.

The foundation said it spends a few million dollars on these types of educational programs. These awareness campaigns are meant to show girls that they can succeed in a rewarding field like engineering, which is usually considered something of a boys club. Teach for America, a teacher corps of made up of recent college grads, received a $500,000 grant from the same foundation. That grant, Exxon said, was meant to improve the education programs for tens of thousands of students from low-income communities across the country. Those involved in the foundation say these types of education programs are meant to prepare students to compete in the global economy.

But Exxon isn't the only major energy company concerned with the greater good to some degree. BP claims it's spent some $14 billion on restoration operations along the southern U.S. coast following the 2010 oil spill in the Gulf of Mexico. Another $1.2 billion was spent funding a scientific study of the gulf ecosystem and BP workers invested some 66.5 million man hours cleaning up southern beaches.

Why would oil companies worth billions of dollars tout their extension of valuable financial resources on things not directly related to energy? The BP case, in part, reveals that what's really at stake is an overriding concern for corporate survival. Economist Milton Friedman, in an essay published in 1970, described this as the "cloak of social responsibility." Friedman explains that a business which claims to have a social conscience is preaching socialism. Businesses, Friedman said, should be concerned with one thing and one thing only and that's making a profit. Social responsibilities are the responsibilities of individuals not of business, he said. Financing measures not directly related to revenue accumulation suggests corporations are actually spending money on improving the corporate image. It's advertising, Friedman would say, meant to make consumers feel good about the company.

The counter argument, however, is that oil companies like Exxon and BP are spending lots of money on good things no matter what evil claims Friedman may have. Schools are getting funded and the beaches are getting restored. Philosophers would argue, however, that the need to survive is the motivating force behind any and all action. Yes, companies like Exxon and BP are doing good things for apparently good reasons. But the sociologists will tell you most people, subconsciously or not, assume their morals and virtues are just, when in most cases it's not so clear cut as that. To assume otherwise, the argument goes, is to undermine the need to survive, or in this case, to make a profit. Friedman would argue that this cloak of social responsibility is in fact a ruse meant to attract capital. That's what businesses are supposed to do in a capital system, he said.

Exxon reported a net income of $9.4 billion during the fourth quarter of 2011. BP returned to profit last year as well. Friedman's assessment isn't so much a direct jab at economic giants like big oil as it's an argument meant to cut through certain value systems that cause consumers to perceive benevolence when that's not necessarily the case. If you're not convinced, next time you go to the store, check out which brands sell better. Is it the ones that back a cause or the ones that don't? Re-read this beginning of this article and ask yourself, what would Friedman say?

Daniel Graeber is a senior journalist at the energy news site Oilprice.com. He is a writer and political analyst based in Michigan. More of his articles can be found on his Authors page at Oilprice.com

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