Early in 1996, Secretary of Labor Robert Reich was full of frustration, an activist in an administration recently convinced that the age of bold new government initiatives was over. The growing cost of Social Security and Medicaid, combined with the need to service a bloated national debt, ensured that there would be no money available for the ambitious programs Reich favored in worker training and other fields. In his memoir, Locked in the Cabinet (1997), he says he concluded that if the government had to do less, then private corporations should have to do more. "Corporate social responsibility," an idea that had been kicking around for decades, would be harnessed to policy. Corporations, Reich believed, ought to be given incentives-and obligations-to invest in their employees' skills, to share fat profits with their workers, to invest in their communities, and to hire and train poor people. "Why not reduce the corporate income tax on companies that met some specified minimum responsibility to their employees and communities, while raising it on those that didn't?" Reich asked himself.

As Reich tells the story, President Bill Clinton's influential secretary of the treasury, Robert Rubin, hated the idea. So did others inside and outside the Clinton administration. Reich's plan to enforce corporate social responsibility was branded "inflammatory" or worse. Reich was quickly squelched: his exclusion from the inner economic policymaking loop was whispered around Washington, he says. His themes were not picked up in presidential speeches. And White House aides quietly told their reporter contacts that Reich had "gone off the reservation," and would soon be muzzled.

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