Milton Friedman 's A Shareholder Approach Essay

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A. Article written by Milton Freeman (1970).
Milton Friedman took a “Shareholder Approach” to social responsibility. This approach claimed that owners provide fund to a company’s managers or entrepreneurs (we called “manager” here after for easy citation). Those managers are supposed to use the fund only in ways that have been authorized by the owners. Friedman proposed that the only one social responsibility of business is to increase its profits as long as it operates with open and free competition without deception.
Milton Friedman’s major arguments:
1. A corporation is an artificial person and therefore cannot be socially responsible. The goal of the corporation is to maximize profits and returns as rewards to its shareholders for their risk taking in compliance with the basic rules of the society, such as law and ethical custom, except those organizations established for eleemosynary purpose.
2. Managers are the agents of the owners of business. Their primary responsibilities were to the owners. Spending corporation’s money for a general social interest is not acting in owners’ best interests (conflict of interests between owners and the beneficiaries for the social interests). Managers who spend corporation’s money on social responsibility are irresponsible.
3. Presumably, managers are the experts in running business. They are not the experts on using their owner’s money for non-business purposes (how much to spend on “social” purposes? How to spend? Who are the
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