In a story not likely followed by most people, the sport of Formula One (F1) racing has forever been tarnished – maybe beyond repair.  Many persons will think, so what?  Who cares about a bunch of European snobs and their expensive race cars?  Yet, this story has a much deeper message that is even more relevant today than ever before. 

In the single most despicable act of cheating in sports, Renault, the French car manufacturer, was given a suspended sentence from competing in F1 racing by the World Motor Sport Council for ordering one of it’s drivers to intentionally crash his car.  Yes, you read that right – intentionally!  What, you may ask, would be the motive for such an insane order, and why would the driver follow that instruction?

Money, prestige, fame, and greed, just to name a few reasons.

The scandal which has now been designated as “Crashgate”, involved Nelson Piquet, Jr., the 23 year old son of a former 3-time World Champion Formula One driver.  The young Piquet, Jr. had struggled in a dangerous and demanding sport where the fine line between talent and perfection is severely tested with each race.  In F1, being really good is rarely good enough.  And he was really good.  

Piquet, Jr. was leading the race at Singapore when his team ordered him to “have an accident” in order to allow his fellow teammate, Spanish driver Fernando Alonso, to win the race.  Alonso, a two-time F1 World Champion would accumulate more points towards a rare third world championship.  And Alonso had no chance to win at this point in the race unless something drastic occurred.  In other words, to Renault and it’s racing team, a victory by Piquet, Jr. was meaningless in the big scheme of things.  A win by Alonso would bring Renault closer to another prestigious season in the exalted world of F1 motor sports.  And damn the possible consequences – severe injury or death to their driver, other drivers, track workers, safety personnel, or fans.  So Piquet, Jr., being “the good lieutenant”, crashed his car into a wall.

After later being fired from the team, Piquet, Jr. “blew the whistle” on Renault.  The car company never challenged his claim, thus consenting by their silence to the judgment of the F1 sport, and racing world.  This immoral and utterly irresponsible action brings into question the issue of Corporate Social Responsibility - a term often bandied about by companies in an effort to convince the public that they have every one’s best interests at heart.  Here is Renaults’s CSR statement from their website:

“Renault maintains relations with a wide range of stakeholders, including customers, suppliers, local communities and residents, associations, and international organisations… These relations are based on two guiding principles: dialogue and transparent, loyal behaviour. Renault’s commitment also extends to the key social issues linked to the automotive industry, such as sustainable mobility and road safety (sic), and to initiatives for civil society.”

The hypocrisy herein, is self-evident. 

As to the problem, one writer asks “whether this is an isolated example of a total loss of perspective . . . ?”   Let’s be realistic.  In an age where banks can almost destroy the global economy and then ask taxpayers to bail them out, where pharmaceutical and health care companies engage in fraud and deceit in order to increase profits at the expense of their customers and patients, and where businessmen will stop at nothing in order to succeed – even at the potential loss of human life – we have to question the notion of self-regulation of corporate behavior.

As for those of you in business who claim that that the concept of Corporate Social Responsibility is just liberal nonsense – go read this paragraph from Adam Smith’s little tome, Wealth of Nations - the basic treatise on Capitalism:

“Our merchants and master-manufacturers complain much of the bad effects of high wages . . . thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.  [Furthermore] the interest of the dealers . . . in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.”

What Smith refers to here is that Capitalism is supposed to serve the interests of the general population, and was not designed to generate profits at any cost, contrary to what many of it’s adherents claim.  With each passing day, it becomes easier to understand why Capitalism’s failures are becoming more pronounced, and more importantly, how the original principles of Adam Smith’s economic theory have become twisted and distorted over the past two hundred and thirty years by large corporations, uber-powerful business interests, and their hatchet men. 

Capitalism only works when it’s principles are not distorted by the prism of ill-gotten profit, power, or prestige  gained at any cost.  When a corporation places it’s interests ahead of the value of even one human life, and then hides behind the shield of Capitalism in defense of their behavior, it paradoxically diminishes the real virtue of free enterprise – it’s power to elevate the well-being of every human being.