Milton Friedman and the Social Responsibility of Business Milton Friedman and the Social Responsibility of Business Joel Makower Friday, November 24, - pm The most provocative statement of the past half-century on the role of business in society came in an essay in the New York Times, written by a fellow named Friedman.
I have been impressed time and again by the schizophrenic character of many businessmen. That is the piece that Mr. Employees want more than a paycheck. Moreover, he maintained, companies that did adopt "responsible" attitudes would be faced with more binding constraints than companies that did not, rendering them less competitive.
Shareholder theory has been criticized by proponents of Stakeholder theorywho believe the Friedman doctrine is inconsistent with the idea of corporate social responsibility to stakeholders. There are some re spects in which conformity appears unavoidable, so I do not see how one can avoid the use of the political Mechanism altogether.
But it helps to strengthen the already too prevalent view that the ptirsuit of profits is wicked and im moral and must be curbed and con trolled by external forces. Conforming within acceptable legal limits may keep them out of court, but companies know well that holding themselves accountable to a higher standard will keep them in good stead with their customers, employees, shareholders, suppliers, regulators and communities.
Although Friedman is clear that directors as agents of the business have to play within the rules of the game, this still leaves room for unethical behaviour.
They can do good—but only at their own expense. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country's armed forces.
In an ideal free market resting on private property, no in dividual can coerce any other, all cooperation is voluntary, all parties to such cooperation benefit or they need not participate.
Another 35 percent without formal programs conduct regular reviews of these activities.
Following the utilitarian adage of providing the greatest good for the greatest number of people, 10 companies are ethically obliged to participate in socially responsible activities that maximise the total welfare of all stakeholders.