Do you agree with Milton Friedman’s (1970) claim that : « the only responsibility of business is to increase its profits » ?
Do you agree with Milton Friedman’s (1970) claim that : « the only responsibility of business is to increase its profits » ?
Milton Friedman was an American economist, statistician and writer, who had a massive impact on the research agenda of the economics profession. His famous words “the only responsibility of business is to increase its profits” (Friedman, Milton. 1970) led to many controversial debates on whether businesses should have ethics or if profit should be their main goal. Corporate social responsibility has many definitions, as its interpretation is quite loose, so I have chosen one that relates the most to this essay, given by the World Business Council for Sustainable Development, in 2000: “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large” (Dahlsrud, A. 2006).
In Milton Friedman’s article 'The Social Responsibility of Business Is to Increase Its Profits ', Friedman’s central message is that the main responsibility for a business is to create wealth; and that the corporation is an instrument of maximising profit and that their priorities should be to maximise shareholder value, have a high competitive advantage and use whatever means, as long as it remains legal, to increase their sales and profitability. In this essay I will be arguing to what extent I agree with Milton Friedman’s claim “the only responsibility of business is to increase its profits”(Friedman, Milton. 1970) and then I will reach a conclusion in which I will give my own point of view on the topic.
On one hand, I agree with certain concepts related to Friedman’s claim. Firstly, and most importantly, any executive of a big corporation has direct responsibilities to its owners, which would be its stockholders. Friedman argues that “to conduct the business in
Milton Friedman was an American economist, statistician and writer, who had a massive impact on the research agenda of the economics profession. His famous words “the only responsibility of business is to increase its profits” (Friedman, Milton. 1970) led to many controversial debates on whether businesses should have ethics or if profit should be their main goal. Corporate social responsibility has many definitions, as its interpretation is quite loose, so I have chosen one that relates the most to this essay, given by the World Business Council for Sustainable Development, in 2000: “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large” (Dahlsrud, A. 2006).
In Milton Friedman’s article 'The Social Responsibility of Business Is to Increase Its Profits ', Friedman’s central message is that the main responsibility for a business is to create wealth; and that the corporation is an instrument of maximising profit and that their priorities should be to maximise shareholder value, have a high competitive advantage and use whatever means, as long as it remains legal, to increase their sales and profitability. In this essay I will be arguing to what extent I agree with Milton Friedman’s claim “the only responsibility of business is to increase its profits”(Friedman, Milton. 1970) and then I will reach a conclusion in which I will give my own point of view on the topic.
On one hand, I agree with certain concepts related to Friedman’s claim. Firstly, and most importantly, any executive of a big corporation has direct responsibilities to its owners, which would be its stockholders. Friedman argues that “to conduct the business in
References: Broughton, Edward, “The Bhopal disaster and its aftermath: a review”, Edward Broughton, Environ Health. 2005; Published online 2005 May, 10http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1142333/ Cosans, Christopher Dahlsrud. Alexander, 2006, “How Corporate Social Responsibility is Defined: an Analysis of 37 Definitions”, Published online in Wiley InterScience (www.interscience.wiley.com) Davis, K Friedman, Milton. 1970 'The Social Responsibility of Business Is to Increase Its Profits ', New York Times Magazine, 13 September 1970 Hutcheson, F Lueck, S. 2008, ‘After 12-Year Quest, Domenici’s Mental-Health Bill Succeeds’, Wall Street Journal, October 4–5. Melé, D., 2002. Not only Stakeholder Interests. The Firm Oriented toward the Common Good. Notre Dame: University of Notre Dame Press.) Moore, G.E