Milton Friedman

1624 WordsOct 23, 20127 Pages
In this essay I evaluate Milton Friedman’s essay: “The Social Responsibility of Business Is to Increase Its Profits” in 1970, on the Social Responsibility of a business and his theory, which is called the “Efficiency Perspective”. In every article and book that I have read about social responsibility, Friedman’s “Efficiency Perspective is placed centrally. During my research I found that Friedman is often criticized for being too classical. Friedman believes that manager’s foremost objective or even moral obligation to the firm should be to maximize profits always. There is however one condition that makes his perspective more complicated, not only for me, but also for several well-known authors. According to Friedman, the managers’…show more content…
It can argue that both Friedman’s thesis and the current practice of CSR lead to a lack of professionalism. Imagine we ask the question: what makes a good shoemaker? For Friedman, it is making plenty of money. For the CSR zealot, it is spending Saturday afternoon volunteering in the local animal shelter. Yet common sense tells us that neither is true, that the good shoemaker is the one who makes good shoes at affordable prices, because shoes are something that everyone in the community needs. Medieval philosophers – unlike early Christian writers who generally took a dim view of mercantile trade – appreciated that merchants perform a useful social function, not by maximizing the profits of their shareholders, but by relocating goods from areas of abundance to areas of scarcity, contributing to a more equitable distribution of the earth’s resources and to the satisfaction of legitimate wants. The function of a business – mercantile or otherwise – is not, according to this reading, to maximize private profit by making as much money as possible, but to maximize the common good by making goods and services available to those who are in need of them. True corporate social responsibility is not an ‘extra-curricular’ activity, but the practice of the virtues proper to a particular occupation and the will to act in accordance with the truth that the purpose of one’s profession is to fulfill as perfectly as possible some definite function within the community.
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