Milton Friedman

Milton Friedman bases his opinion on businesses and profit maximization on the foundation of free enterprise. “The free market theory believes that business managers have only one primary responsibility, which is to maximize profit; also, the theory tells that government should not involve in economic matters, except to prevent fraud and coercion” (p. 7) Mr. Friedman argues that a corporation, unlike a person, cannot have responsibility. I disagree with this notion. I don’t think that anyone would engage in a business contract with a corporation if they thought that a corporation was not responsible to pay its bills. So therefore, a corporation can have legal, and moral responsibilities. Milton Friedman uses what, to me, is the key phrase 'as long as it stays within the rules of the game ' but does not define the phrase in terms of the legal system. My question is what about the rules of the game that are not so much as even suggested in the law? There are other rules that companies have to follow if they want to be successful; such as the obvious supply and demand rules in the marketplace. Also, as we have seen with the production of new ideas and technologies, the law follows progressions in technology and thinking. But the principle of responsibility leads the legal cases being decided. Being compliant with the law may keep them out of court, but companies know that holding themselves accountable to a higher standard will keep them in a good place with their customers,

First thing let us start with a little overview of what Milton Friedman exposed in his article. It seems that the whole point of his essay revolves around one basic statement which clearly says that the only social responsibility of business is to use its resources and engage in activities designed to increase its profits so long it stays within the rules of the game (Milton Friedman, the social responsibility of business is to increase profit).

What Friedman implies is that shareholders should only be concerned with maximizing profits and not be obligated to be “socially responsible.” In that case, the manager would only have one priority, to maximize profits. However, what if that manager determined that social endeavors is the best option to maximize profits? This would make the corporation socially responsible while still maintaining maximum profits. The argument presented by Friedman in this case is that while the manager is performing as expected by maximizing profits, this type of “social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.”

Subsequently, Denning may have misinterpreted Friedman’s main argument. The actual title of Friedman's article is "The Social Responsibility of Business is to Increase its Profits". Denning hastily substituted the word "sole" for "social" and misinterpreted Friedman’s argument to be that that the sole purpose of the firm is to make money for shareholders. This is not true. The main issue Friedman was tackling was the social responsibility of business; the responsibility that it has to the society. In fact, the word “sole” was not mentioned even once in the

Milton Friedman advocates the classical theory of business, which essentially holds that businesses should be solely devoted to increasing profits as long as they engage in open and free competition devoid of fraud. Friedman was an advocate of free market forces, he would recommend that let the market forces operate freely and the executive compensation will reach the right levels. The high performing executives will command higher salaries and poor performing executives will receive lower salaries or simply become unemployed. If

The first source is a quote by Milton Friedman that criticizes the view of corporate officials needing to abide to a “social responsibility”. He claims that, in a free market economy, corporate officials only have one goal, to increase profits for their business. So long as it's done without deception, fraud and engages an open and free competition. It is obvious that Martian Friedman is a supporter of capitalism. Capitalism is an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state or province. It is a right-wing ideology built on the foundation of individualism. It encourages freedom of action for individuals over government control. The source presents Milton is a supporter of individualism and classical liberalism. He favors an economy focused on making profits for the individual with little to no government intervention. Ideologies that

According to Milton Friedman, all of the following are reasons not to use corporate funds to serve social causes EXCEPT:

When most of us think of the words opportunity cost, price, production, and service, we think of something related to obtaining or giving something. According to Merriam-Webster, opportunity cost is defined as, the added cost of using resources (as for production or speculative investment) that is the difference between the actual value resulting from such use and that of an alternative (as another use of the same resources or an investment of equal risk but greater return). Price, is defined as the amount of money that you pay for something or that something costs. Production, is defined as the process of making or growing something for sale or use, and lastly, service, is defined as, the occupation or function of serving. Milton Friedman, an American economist, would say, nothing in live is free, that is, if you want something, you have to give something. These four words can all be tied together and used to give and receive. We can either use it to our benefit or simply perform it. We could get the most out of life using these four words, opportunity cost, price, production, and service, by primary accepting that everything in life is obtained at a cost, acknowledging that they can be used as forward-looking concepts, and agreeing to do everything yourself instead of hiring someone to do it in your place.

Milton Friedman argues that persons may choose to undertake social responsibilities to their communities, churches, or nations, and devote their own incomes to causes that they deem morally worthy. But, he adds, if corporate executives attempt to take such social responsibilities or to direct the corporation’s profits to such personal causes, without approval from the shareholders, then:

Milton Friedman was an American economist who won the Nobel Memorial Prize in Economic Sciences in 1976 for his researches. He was a professor at the University of Chicago and was a strong believer of free market capitalization. His quote “One of the great mistakes is to judge policies and programs by their intentions rather than their results” talks about people tend to judge policies based on their outcomes rather than the intention behind the policy. Friedman says not all policies will work out as they planned but people should realize that these policies were intended to benefit the citizens of the United States and not to judge them based on their outcomes. A good example would be the healthcare plans. President Obama introduced the Affordable Health Care Act, popularly known as Obama Care with the intention of giving health care to those who cannot afford it.

The Milton Friedman paper strongly supports my views on "what is economics", and the importance of science in acquiring and presenting economic knowledge.

There is a concept in Kierkegaardian existentialism that is quite interesting, particularly because in the current case it appears to be relevant for a very bizarre reason. Kierkegaard writes of the “teleological suspension of the ethical,” that is, the suspension of ethical rules for behavior in order to follow a higher, divinely-imposed law (McDonald, 1996). The example that Kierkegaard writes of is Abraham’s willingness to sacrifice his son, Isaac, a willingness that required that he suspend his ethical obligations in support of the telos provided by God. Milton Friedman certainly does not come across as a Christian Existentialist, so one wonders precisely how this concept is relevant to his thoughts on the duties of corporations. The answer is quite simple: for Friedman, the “divine law” that warrants a teleological suspension of the ethical is the accumulation of wealth. In order to accumulate wealth, the ethical obligations of all persons involved in a corporation can be suspended under the pretense that they together form a corporation that is and ought to be amoral and profit-hungry. I am being somewhat tongue-in-cheek, of course, because I doubt that Friedman would describe his position in these terms, but I am pointing to what I believe is a key reason that Friedman’s argument fails. In this short paper, I will first present what I believe are Friedman’s most fundamental arguments. I will then present my reasons that these arguments fail. Finally, I will discuss

Friedman, M. (1970). ‘The Social responsibility of business is to Increase its Profits’. Place of publication: The New York Times Magazine, 13 September 1970. Available at

“There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” (Friedman) Friedman’s word perfectly defines the shareholder theory. However, stakeholder theorists, like John Mackey or Edward Freeman, argue that business has an ethical obligation to all stakeholders, including employees, suppliers, costumers, society and any other groups of people that the business has a relationship with. Personally, I am more inclined to Milton Friedman’s sentiment for various reasons demonstrated as below.

For a long time now, there has been much debate over the social responsibility of a business. Friedman is one of the most influential