For American Consumers, a Responsibility Revolution

We have always known that heedless self-interest was bad morals," FDR said in 1937, in the midst of the Great Depression. "We know now that it is bad economics." We learned this all over again after the collapse of Lehman Brothers, the shame of subprime mortgages and the brazen Ponzi scheme of Bernie Madoff. But even amid the Great Recession of 2009, people have been trading in their SUVs for Priuses, buying record amounts of fair-trade coffee and investing in socially responsible funds at higher rates than ever before. What we are discovering now, in the most uncertain economy since FDR's time, is that enlightened self-interest — call it a shared sense of responsibility — is good economics. (Read TIME's interview with President Obama and First Lady Michelle Obama on service.)

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America has always been a great laboratory of social innovation, from Ben Franklin's creation of the volunteer fire department and the lending library to the rise of online collectives like Wikipedia and Facebook. Usually it has been an invention, some innovation in commerce — the car, the lightbulb, the television — that has changed how we interact with one another as well as how we think of ourselves. We are again entering a period of social change as Americans are recalibrating our sense of what it means to be a citizen, not just through voting or volunteering but also through commerce: by what we buy. There is a new dimension to civic duty that is growing in America — it's the idea that we can serve not only by spending time in our communities and classrooms but by spending more responsibly. We are starting to put our money where our ideals are.

According to a new TIME poll, more than 6 in 10 Americans have bought organic products since January. Lots of us have bought an energy-efficient lightbulb too. And it's not just the nature of the product but also its provenance that's prompting us to buy. Of the 1,003 adults we polled this summer, 82% said they have consciously supported local or neighborhood businesses this year. Nearly 40% said they purchased a product in 2009 because they liked the social or political values of the company that produced it. That's evidence of a changing mind-set, a new kind of social contract among consumers, business and government. We are seeing the rise of the citizen consumer — and the beginnings of a responsibility revolution.

See TIME's special report on community service.

This is a new idea in a nation where our most iconic economist, Milton Friedman, wrote in 1970 that a corporation's only moral responsibility was to increase shareholder profits. Since 1995, the number of socially responsible investment (SRI) mutual funds, which generally avoid buying shares of companies that profit from such things as tobacco, oil or child labor, has grown from 55 to about 260. SRI funds now manage approximately 11% of all the money invested in U.S. financial markets — an estimated $2.7 trillion.

Corporate America has discovered that social responsibility attracts investment capital as well as customer loyalty, creating a virtuous circle. With global warming on the minds of many consumers, lots of companies are racing to "outgreen" one another, a competition that is good for their bottom lines as well as the environment's. The most progressive companies are talking about a triple bottom line — profit, planet and people — that focuses on how to run a business while trying to improve environmental and worker conditions.

It's a new way of looking at a concept as old as the Republic. Ever since colonists in Boston refused to buy British tea, Americans have wielded their economic clout as a weapon against — and, sadly, sometimes for — social injustice. In the U.S., the power of the purse is the most democratic power of all. The Quaker notion of doing well by doing good — popularized by Ben Franklin, the patron saint of social entrepreneurs — predated the predatory capitalism of the Gilded Age. Its revival is due in part to an Obama effect: as a presidential candidate, Barack Obama relentlessly touted green products and industry and preached the idea that profits and principles are not mutually exclusive. His election was both a cause and an effect of this sense of social responsibility: his candidacy capitalized on this evolving mind-set, and he has done more than anyone else to advance it. "I think our campaign was an expression of people wanting to be engaged and involved in different ways," Obama said in an interview in the White House this month. "They wanted to be part of something larger than themselves."

But long before Obama started talking about how green is the new gold, many corporations discovered that business was about a lot more than a profit-and-loss statement. At first, the corporate stance was defensive: companies were punished by consumers for unethical behavior. In the 1990s, companies like Nike and Walmart were attacked for discriminatory and unfair labor practices. People became alarmed about "blood diamonds," or "conflict diamonds" — gems mined in war zones and used to finance conflict in Africa. More recently, consumers have become concerned about the sourcing of metals used in computers. The nexus of activist groups, consumers and government regulation could not merely tarnish a company but put it out of business. Companies also began to realize that just as some consumers boycotted products they considered unethical, others would purchase products in part because their manufacturers were responsible.

Some companies embraced the new ethos early on. In 1992, Gap developed sourcing guidelines for its suppliers, and in 1996 the company put in effect a code of conduct for them. Since 2004, Gap has been publishing information about the factories it uses and those it has stopped doing business with. Last year HP followed suit, becoming one of the first computer manufacturers to apply similar transparency to its global supply chain. Timberland now prints a detailed label for its shoes, noting on each pair the company's material and energy usage.

None of this would have happened without consumer demand. Nearly half of Americans in our poll said protecting the environment should be given priority over economic growth — and this comes in the midst of a recession and historic unemployment. And 78% of those polled said they would be willing to pay $2,000 more for a car that gets 35 m.p.g. than for a similar one that gets only 25 m.p.g. Of course, consumers are doing their own doing-well-by-doing-good calculation: a more expensive car that gets better gas mileage will save them money in the long run — and make them feel good about it in the process.

See 21 ways to serve America.