In Response to Friedman’s View of Corporate Social Responsibility
It is not a common sentiment to hear Milton Friedman described as left of center in political spheres. Certainly, Friedman’s landmark essay The Social Responsibility of Business is to Increase Profits in the New York Times magazine was filled with many assertions that placed him as a bulwark for a growing conservative movement who felt a vindication for the free market mechanism and skepticism for the role of government. However, while reading Friedman muse over the social responsibilities of businesses, one cannot help but notice the emergence of a deeper philosophical thought that aligns much more closely with the liberal views of yesteryear and today.
The crux of the issue that Friedman tries to dissect is whether businesses acting socially responsible are effectively imposing a tax on those who invest their resources in such firms. Friedman’s argument centers around two ‘political questions’: whether firms have the appropriate mechanisms for determining the socially optimal use of resources, and whether corporations could recognize the repercussions that would arise from their decisions to assume social responsibilities. Friedman simplifies the two ideas into the argument of principle, and the argument of consequence. In answering both, Friedman determines that it is in the best interests for firms to maximize profits. Despite the rather impassive conclusion, there is still much congruence between Friedman’s ideas and more liberal viewpoints. The first idea to note is that Friedman is invoking a deontological, not consequentialist, argument. This is observable in the caveat he includes with his words, that businesses maximize profits within ‘the rules of the game…without deception or fraud’. A consequentialist reading of Friedman’s work would look to identify an ‘ends justifies the means’ sense of reasoning. Friedman however makes clear the means of achieving the ends are important, as profits need to be maximized within the regulatory environment and
The crux of the issue that Friedman tries to dissect is whether businesses acting socially responsible are effectively imposing a tax on those who invest their resources in such firms. Friedman’s argument centers around two ‘political questions’: whether firms have the appropriate mechanisms for determining the socially optimal use of resources, and whether corporations could recognize the repercussions that would arise from their decisions to assume social responsibilities. Friedman simplifies the two ideas into the argument of principle, and the argument of consequence. In answering both, Friedman determines that it is in the best interests for firms to maximize profits. Despite the rather impassive conclusion, there is still much congruence between Friedman’s ideas and more liberal viewpoints. The first idea to note is that Friedman is invoking a deontological, not consequentialist, argument. This is observable in the caveat he includes with his words, that businesses maximize profits within ‘the rules of the game…without deception or fraud’. A consequentialist reading of Friedman’s work would look to identify an ‘ends justifies the means’ sense of reasoning. Friedman however makes clear the means of achieving the ends are important, as profits need to be maximized within the regulatory environment and