Social Responsibility

Social Responsibility

Milton Friedman was the author of an informative and eye-opening article titled, “The Social Responsibility of Business is to Increase its Profits.” Within this article, Friedman explains in complex detail about the notion of “social responsibility” of businessmen within a corporate environment. Friedman argues that businessmen are only out for one particular goal. That goal would be to increase their profits.

Throughout Friedman’s article he is continuously emphasizing the idea of social responsibility and he compares and contrasts examples of what exactly social responsibility entails. The businessman has the responsibility of conducting business with his employers, customers, and stockholders. But, he is constantly pursuing a way to gain profits. When a businessman is making a decision, whether or not he will receive a profit will in turn determine what decision he will ultimately make. He believes that businessmen who gives speeches and proclaim of making a profit is not his number one priority, would be a bold faced liar. Friedman is critical of those who would impose on business any duty other than that of making money, and he is particularly harsh with those business leaders who themselves take a broader view of their social responsibilities. (Moral Issues in Business, Shaw. 2004.)

One of Friedman’s most effective arguments would be when he explains that a corporate executive is not an agent, but a principal. The corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily-to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse work for particular corporations, even to leave his job, for example, to join his country’s armed forced. In these respects, he is acting a principal, not an agent. (The Social Responsibility of Business is to Increase its Profits, Friedman. 1970.) He is essentially saying that it is okay for businessman to spend his money, and no one seems to question it, but if a businessman is spending the corporation’s money, he is wrong. He wanted to get across the point that as stated above, that is an individual responsibility, not a business responsibility. That was a wonderful compare and contrast