Milton Friedman and economic policy

¶ … Social Responsibility of Business is to Increase its Profits" by Milton Friedman, a lot can be learned about the beliefs regarding business ethics of some people in the early 1970s. According to Friedman, businessmen are preaching socialism when they speak of improving social conditions and the need of businesses to be serious about their responsibilities of providing employment, ending discrimination, and avoiding environmental harm through means of reforming the business world. These are, in fact, socialist concepts, although business majors from universities across the nation will claim these are concepts of the free enterprise system alone. Friedman finds it to be ridiculous to refer to the responsibilities of business, as businesses and corporations are only artificial people and will therefore only have artificial responsibilities; for his arguments it is assumed that business executives are the people on whom business responsibilities fall. The primary responsibility of the manager of a company is to the corporate executives, and it is easy to evaluate the manager's performance as the arrangement is clearly defined. The personal responsibilities of an executive, such as those he assumes towards his family or chosen charities, are completely seperate from those of the business. The social responsibilities of the corporate executive as a businessman may be implied to include not raising the price of a product to help prevent inflation, even though he would benefit from it as a business, or to go beyond the required regulations for preventing pollution for the sake of the planet. However, a corporate executive, according to Friedman, would have to spend other people's money for a general social interest, by means of reducing returns to stockholders, lowering worker wages, or raising the price of products. However, herein lies the basic flaw of this author's reasoning, for the social responsibility of the business as it falls on the executive is to make sacrifices for the benefit of others. In a position of such power, a business executive needs to make policy decisions that might actually cut into his own profits, as opposed to the wages of the workers or the wallets of the consumers. While this author may argue that the only responsibility of the business is to make profits using all available resources, engaging in open and free competition without fraudulent activity, a business is a controllable extension of those who own and run it, and just as we have individual responsibilities towards our society and other people, the business personified must also recognize this responsibility. Being socially responsible does not have to cost a business money at all, especially since many consumers will choose to pay more for a socially responsible product or service to make up for any cost that simply cannot come out of the personal profit of the business executive.