Milton Friedman on the Social Responsibility of Business – To Increase its Profits!


Recently, I wrote an article titled Examples of the Inherent Corrupt Nature of Corporations quoting Bakan’s conclusion that corporations are inherently corrupt because they are legally bound to place profit over everything, even the public good and provided relevant and timely examples in support.

I’ve also written a few articles criticizing corporate hegemony:

I want to make a further point to rule out the “fringe” element of these arguments. That is to say, the conclusions that corporations are inherently monstrous are actually mainstream and not part of a “radical” intellectual circle.

Introducing Milton Friedman, arguably the most important economist of the last 100 years. Friedman was an advisor to Republican U.S. President Ronald Reagan and Conservative British Prime Minister Margaret Thatcher.

A survey of economists ranked Friedman as the second-most popular economist of the twentieth century, following only John Maynard Keynes, and The Economist described him as “the most influential economist of the second half of the 20th century … possibly of all of it”.

Friedman won the Nobel Memorial Prize in Economic Sciences, the sole recipient for 1976, “for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy.”

On September 13, 1970, Friedman wrote an article on The New York Times Magazine titled The Social Responsibility of Business is to Increase its Profits.

Friedman argued:

The discussions of the “social responsibilities 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.

Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and presti­gious businessmen, does clearly harm the foun­dations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely farsighted and clearheaded in matters that are internal to their businesses. They are incredibly shortsighted and muddle­headed in matters that are outside their businesses but affect the possible survival of busi­ness in general. This shortsightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or income policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally con­trolled system than effective governmental con­trol of prices and wages.

The shortsightedness is also exemplified in speeches by businessmen on social respon­sibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse.

That is why, in my book Capitalism and Freedom, I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

And there you have it. Business need not be concerned about anything outside of its profit margin.

This is why Apple, DuPont, Big Pharma,  HSBC, Exxon, and Big Tobacco lie to the public. Tech, chemical, pharmaceuticals, energy, tobacco, banks, etc — all lie for the sake of profit. Corporations are inherently corrupt because they are legally bound to place profit over everything else.

Any questions?


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