Milton Friedman on Corporate Social Responsibility

Milton Friedman, American Economist

Milton Friedman, American economist, argued against the concept of corporate social responsibilities in a famous article called “The Social Responsibility of Business is to Increase its Profits.” Friedman was the most prominent advocate of free markets and won the Nobel Prize for Economics in 1976.

Those who advocate such a concept, Friedman argued are unwitting puppets of the intellectual forces that have been undermining the basis of free society. Friedman cites the fiduciary responsibility of a company to maximize its profits for shareholders. Any expenditure elsewhere (e.g. to a charitable cause) is equivalent to theft from the shareholders.

Businesspersons who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.

In each of these cases, the corporate executive would be spending someone else’s money for a general social interest. Insofar as his actions in accord with his “social responsibility” reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employees, he is spending their money.

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