Milton friedman business ethics essay

Moreover, he maintained, companies that did adopt "responsible" attitudes would be faced with more binding constraints than companies that did not, rendering them less competitive. That is, acting "responsibly" risks reducing profits or forgoing revenue in the name of social good. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price increase would be in the best interests of the corporation. Or that he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment.

Milton friedman business ethics essay

But, really, it took you only five minutes. One of the main agendas in any business ethics class is to encourage individuals going into business to be socially responsible. It goes without saying that one of the main goals in business is to make money but we also hear many times that business people also have other responsibilities.

As some of you may know, Milton Friedman was a Nobel Prize winning economist and a defender of free market capitalism for many years.

Milton friedman business ethics essay

Needless to say, he was very much against the sort of talk that we often hear about social responsibility. In fact, he thought it was nothing more than propaganda for socialism.

Milton Friedman

First, we need to clarify the concept of responsibility. Can businesses have responsibilities? No, says Friedman, mainly because responsibilities only adhere to individuals.

This is similar to the claim that businesses do not pay income taxes. A corporation is not an individual so much as a legal fiction so it cannot have responsibilities.

Rather, it is the individuals in the corporation who have responsibilities. So, the claim that a company has a social responsibility is really a claim that an individual such as a manager has a responsibility. So, what could it mean to say that a manager has a social responsibility?

Well, in the conventional sense it must mean that the manager has a responsibility to do something other than what he is being paid to do.

Socio-economic School

Many times we hear precisely these claims. A business has a responsibility to keep the environment clean and provide jobs and a living wage. In fact, Friedman argues that businesses or rather individuals in the business have no such responsibilities.

He argues this for three reasons: First, pursuing a social responsibility violates the relationship between shareholders and the company. After all, it is the shareholders who own the company and they have hired the CEO or manager to do a specific job.

This job is to increase profits. By not doing this job the individual is violating the agreement. Interestingly, this argument seems to imply that if the shareholders were to hire someone specifically do fulfill a social responsibility, then they would be justified in doing so.

Of course, non-profit companies exist for just such purposes. Secondly, a manager or CEO who pursues a social responsibility is infringing on the liberty of the shareholders of the corporation.Business Ethics.

Home Unit One Unit Two Other Documents Links Videos Books Milton Friedman. Thomas Sowell tells the following So, it may come as a surprise to read Milton Friedman’s essay where he basically equates social responsibility with making profits.

Milton Friedman Business Ethics Essay Milton Friedman on Social Corporate ResponsibilityThe 14 Jul Milton Friedman proposed a guiding principle for business ethics in a In this essay, The social responsibility of business is to increase its profits arguments.

Nov 24,  · The most provocative statement of the past half-century on the role of business in society came in an essay in the New York Times, written by a fellow named Friedman. That's Milton, not Thomas.

Milton Friedman proposed a guiding principle for business ethics in a New York Times article, provocatively titled: “The social responsibility of business is to increase its profits”: 1 In this essay, Milton Friedman’s view is discussed and contrasted with the socio-economic view of Corporate Social Responsibility. It will be argued. Responsible Business - Milton Friedman on Business Ethics. Milton Freedman's Business Ethics Essay - Ethics means the principle of used by human well-being as a guideline for making a good of an ethical in organization and others. Abstract. The main arguments of Milton Friedman's famous and influential essay are unsuccessful: He fails to prove that the exercise of social responsibility in business is .

Milton Friedman, “The Social Responsibility of Business is to Increase Profits” Formative Essay Business Ethics and Society ‘The main responsibility of business is to increase the profit for its shareholders – discuss ’. First I am going to explain the role of shareholders and how they affect the decision making of businesses.

Ethics: Business Ethics and Corporate Social Responsibility Essay Business ethics reflects the philosophy of business, one of whose aims is to determine the fundamental purposes of a company.

If a company's purpose is to maximize shareholder returns, then sacrificing profits to other concerns is a violation of its fiduciary responsibility. Published: Mon, 5 Dec The question of business ethics has been at the forefront of business studies for several decades.

It is an issue that has been discussed by everyone from philosophers to economists, many of whom placed an emphasis on the social responsibility of .

Milton Friedman on Corporate Social Responsibility