Anti-business activists are finding themselves on the defensive for a change – and they don’t like it. After more than two decades of virtually unchallenged infiltration of corporate America under the banner of “corporate social responsibility,” CSR, supporters of free enterprise and free markets are finally waking up and taking notice of this stealthy but well-organized campaign to steer America into a sharp left turn.

As documented in George Washington University professor Jarol Manheim’s book “Biz-War and the Out-of-Power Elite: The Progressive-Left Attack on the Corporation,” the left has chosen to compensate for its steady loss of electoral power following the Reagan Revolution by focusing on gaining influence and control within corporate America in order to use the wealth and clout of businesses to change the direction of American politics and public policy.

The left’s strategy has worked so far; many corporate managements have rushed to embrace what they perceive to be the image-enhancing benefits of “social responsibility” without calculating the long-term impact. Managements have also been led to believe that CSR will increase their profits.

Succumbing to such “corporate Kool-Aid,” the financial services giant Citigroup agreed last year to allow the Rainforest Action Network (RAN) to dictate its lending policies in the developing world. Thanks to the precedent set by Citigroup’s capitulation, RAN wrung similar concessions from Bank of America and now is pressuring JP Morgan Chase – going so far as to bus second-graders into JPMC’s Manhattan headquarters for a protest.

Although the global warming treaty known as the Kyoto Protocol was overwhelmingly rejected in the American Congress, CSR activists and their allies in the “socially responsible investing” [SRI] camp are pressuring business to implement the provisions of the Kyoto Protocol on a private basis.

The alarming success that the CSR/SRI movement has had in hypnotizing corporate managements to do the political Left’s bidding is finally causing free enterprise/free market supporters to speak out.

Renown economist Arthur Laffer recently examined the claim that CSR increases business profitability. After analyzing data on the 28 top “corporate citizens” of the past five years and comparing them to their competitors in a January 2005 report, Mr. Laffer found no evidence that CSR enhanced profitability.

Adding insult to injury, the Economist (January 22) followed the Laffer report with five articles critical of CSR. Attacking the notion that CSR produces benefits, Economist editor Clive Crook wrote, “CSR cannot be a substitute for wise [public] policies. … In several little-noticed respects, it is already a hindrance to them.”

Especially alarming was what the Economist referred to as “pernicious CSR,” in which companies – like Citigroup and Bank of America – agree to codes of conduct that may in the short-term provide relief from social activist pressure but whose longer term consequences doom the poor in developing countries to perpetual poverty.

Smarting from these stinging observations, the CSR movement is trying to defend itself – but not very well.

Responding to the Laffer study, noted CSR advocate Howard Rothman commented in his blog that, “few of us involved in this space ever really claimed socially responsible companies are more profitable than others” – shockingly ignoring more than two decades of claims in the economics literature that CSR leads to profitability.

The Laffer study was also attacked by Ketchum Communications, a large PR firm with a financial stake in selling CSR to businesses. While offering no substantive criticisms of Laffer’s analysis, the Ketchum article bluntly said, “Get over it, Dr. Laffer – the NGOs are here to stay.” “NGOs,” short for nongovernmental organizations, are United Nations-credentialed groups that often advocate CSR.

CSRwire.com – the self-proclaimed “leading source of corporate responsibility and sustainability, press releases, reports, and news” – refused to publish my organization’s [CSRwatch.com] press release about the Laffer study because the study was critical of CSR.

Business for Social Responsibility – a CSR advocacy group supported by left-leaning Ben & Jerry’s Foundation, Rockefeller Foundation, and the [Ted] Turner Foundation – tried to skirt the Economist’s charges by accusing the magazine of “mistakenly or willfully conflating a small ‘anti-capitalist’ minority that has sought to co-opt CSR.”

Denial, bullying, stonewalling, and back-pedaling aren’t very good defenses of CSR – especially considering the sources are the “leading lights” of the CSR movement.

Mr. Milloy publishes CSRwatch.com and is an adjunct scholar at the Competitive Enterprise Institute.