The Social Responsibility of Businesses to increase its profits - Milton Friedman

What is a "fundamentally subversive doctrine" in a free society according to Milton Friedman?

"There is one social responsibility of business-to use resources and engage in activities designed to increase its profits as long as it stays within the rules of the game, which engages in open and free competition without deception or fraud."

In a free-enterprise, private-property system, what is a corporate executive?

An employee of the owners of the business

What is a corporate executive responsibility?

Conduct the business in accordance with which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.

What is the political principle that underlies political mechanism?

Conformity

True or False. Is unanimity always feasible?

False. Unanimity is not always feasible.

What do businessmen believe they are defending when they declaim that business is not concerned "merly" with profit, but also with promoting desirable "social" ends?

Free enterprise

The cooporate executive is the manager. Who is his responsibility to?

He is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them

Under political principle, the corporate executive is to simultaneously be who? What does he have to decide?

He is the legistlator, executive and, jurist. Who to tax by how much and for what purpose, and he is to spend the proceeds

What does it mean to say that the corporate executive has a "social responsibility" in his capacity as businessman?

He is to act in some way that is NOT in the interest of his employers

How is the executive exercising distinct "social responsibility?"

If he spends the money in a different way than the stockholders, employees, and customers would have spent it.

What is market mechanism?

In an ideal free market resting on private property, no individual can coerce any other, all cooperation is voluntary, all parties benefit or they need not participate. There are no values, no "social" responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form.

What does the doctrine of "social responsibility" involve?

The acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources to alternative uses.

What is political mechanism?

The individual must serve a more general social interest-whether that be determined by a church, a dictator, or majority. The individual may have a vote and say in what is to be done, but if he is overruled, he must conform.

On grounds of political principle, civil servants-insofar actions of social responsibility are real and not just window-dressing. How should civil servants be elected?

They must be elected through a political process.

What is the political principle that underlies the market mechanism?

Unaimity

If the individual proprietor If acts to reduce the returns of his enterprise in order to exercise his "social responsibility," who's money is he spending?

he is spending his own money, not someone else's

If the executive exercise a distinct "social responsibility," he is imposing taxes in one hand and deciding how tax proceeds is spent in the other. What 2 level of political questions does this process raise?

principle and consequences

What does the difficulty of exercising "social responsibility" illustrates?

the great virtue of private competitive enterprise-it forces people to be responsible for their own actions and makes it difficult for them to "exploit" other people for either selfish or unselfish purposes. They can do good-but only at their own expense.

What is Political Principle?

the imposition of taxes and the expenditure of tax proceeds are governmental functions

The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. When does this justification dissappear?

when the corporate executive imposes taxes and spends the proceeds for "social" purposes.