{"id":398,"date":"2010-03-30T11:22:55","date_gmt":"2010-03-30T11:22:55","guid":{"rendered":"http:\/\/terrywassall.org\/blogs\/capitalism\/?p=13"},"modified":"2010-03-30T11:22:55","modified_gmt":"2010-03-30T11:22:55","slug":"the-social-responsibility-of-business-is-to-increase-its-profits","status":"publish","type":"post","link":"https:\/\/terrywassall.org\/index.php\/2010\/03\/30\/the-social-responsibility-of-business-is-to-increase-its-profits\/","title":{"rendered":"The Social Responsibility of Business is to Increase its Profits"},"content":{"rendered":"

The Social Responsibility of Business is to Increase its Profits (full article)<\/a> by Milton Friedman.\u00a0 Also at http:\/\/www.umich.edu\/~thecore\/doc\/Friedman.pdf<\/a><\/p>\n

[But contrast the historical origin of keizai or \u201ceconomy\u201d in Japanese – Keizai comes from keisei zaimin, or \u201cadministering society and deliverance of people\u201d in 18th century Osaka. Also Sen shows Friedman’s view is not that of Adam Smith].<\/p>\n

The New York Times Magazine<\/em>, September 13, 1970. Copyright @ 1970 by The New York Times Company.<\/p>\n

When I hear businessmen speak eloquently about the “social responsibilities of business in a free-enterprise system,” I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en\u00adterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing em\u00adployment, eliminating discrimination, avoid\u00ading pollution and whatever else may be the catchwords of the contemporary crop of re\u00adformers. In fact they are\u2013or would be if they or anyone else took them seriously\u2013preach\u00ading pure and unadulterated socialism. Busi\u00adnessmen who talk this way are unwitting pup\u00adpets of the intellectual forces that have been undermining the basis of a free society these past decades.<\/p>\n

The discussions of the “social responsibili\u00adties of business” are notable for their analytical looseness and lack of rigor. What does it mean to say that “business” has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities, even in this vague sense. The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom.<\/p>\n

Presumably, the individuals who are to be responsible are businessmen, which means in\u00addividual proprietors or corporate executives. Most of the discussion of social responsibility is directed at corporations, so in what follows I shall mostly neglect the individual proprietors and speak of corporate executives.<\/p>\n

In a free-enterprise, private-property sys\u00adtem, a corporate executive is an employee of the owners of the business. He has direct re\u00adsponsibility to his employers. That responsi\u00adbility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con\u00adforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose\u2013for exam\u00adple, a hospital or a school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services.<\/p>\n

In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Social Responsibility of Business is to Increase its Profits (full article) by Milton Friedman.\u00a0 Also at http:\/\/www.umich.edu\/~thecore\/doc\/Friedman.pdf [But contrast the historical origin of keizai or \u201ceconomy\u201d in Japanese – Keizai comes from keisei zaimin, or \u201cadministering society and deliverance of people\u201d in 18th century Osaka. Also Sen shows Friedman’s view is not that of … Continue reading “The Social Responsibility of Business is to Increase its Profits”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-398","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/posts\/398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/comments?post=398"}],"version-history":[{"count":0,"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/posts\/398\/revisions"}],"wp:attachment":[{"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/media?parent=398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/categories?post=398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/terrywassall.org\/index.php\/wp-json\/wp\/v2\/tags?post=398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}