Friedman offers two broad set of arguments in favor of his position. Milton friedman on inflation federal reserve bank of st. We analyze, from the viewpoint of value creation, the evolution of corporate social responsibility csr thought from friedman critical view of csr to porter and kramer sharedvalue proposition, emphasizing, at the same time, its parallelism with the evolution of asset valuation models from the viewpoint of common stocks value. Corporate social responsibility from friedman to porter.
Milton friedman on selfinterest and the profit motive. Friedman points to government and laws as an influence on ethics. Corporate social responsibility csr, milton friedman. Milton friedman was born july 31, 1912 in brooklyn, new york in a poor family of immigrants from eastern ukraine. Friedmans theory of corporate social responsibility thomas carson milton friedmans theory about the social responsibilities of business is an extremely important and influential position. He maintained that the only social responsibility of a business. This article identifies and reorganizes hayeks criticisms of social justice, the rule of law and morality, his comparison of the open.
Return to article details friedmans theory of social responsibility for business in the 21st century friedmans theory of social responsibility for business in the 21st century. The friedman doctrine, or shareholder theory, is a normative theory of business ethics advanced by economist milton friedman which holds that a firms main responsibility is to its shareholders. Following essay considers milton friedman s argument about csr and its meaning for businesses. Teivo teivainen corporate social responsibility csr talk has been created mainly to defend undemocratic governance of business. What are the advantages and disadvantages of gross domestic product. The stockholder theory whose leading spokesman was milton friedman argued that the only social responsibility of business is to. Milton friedman and csr in my book capitalism and freedom, i have called csr a fundamentally subversive doctrine in a free society, and have said that in such a society, 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. This approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible.
Friedman argued for a direct form of capitalism and against any activity that distorts economic freedom. So, milton friedman gives us what has become the dominant view of business social responsibility. Almost everyone who writes on the topic writes at least partly in reaction to friedman. Milton friedman pioneered the intellectual fight against csr.
Milton friedmans 1970 article the social responsibility of business is to increase its profits is likely one of the most assigned, and most debated, papers in social issues pedagogy. In this essay we are taking a look at the famous milton friedmans essay the social responsibility of business is to increase profit. Corporate social responsibility theory of milton friedman. Friedmans position was first stated in capitalism and freedom1 a. Friedmans free to choose was one of the first books on public policy i read in. The great economists career was full of heated controversy but achieved almost nothing of substance in. Despite these intentions, it expresses a crucial contradiction of capitalism. Schwartz and david saiia abstract when attempting to articulate the nature and scope of corporate social responsibility csr, a variety of opinions emerge. Milton friedman was an american economist who received the 1976 nobel memorial prize in economic sciences for his research on consumption analysis, monetary history and theory, and the complexity.
Do you think its reasonable for the school authorities to go off on their own tangent and use your money on some other cause they deem wort. What is full employment and why is it difficult to measure. Friedmans 1962 view is considered an instrumental view of csr because it gives profit maximization top priority. But theres one widely known friedman quote ive come to loathe. Friedmans theory of corporate social responsibility. The first is a set of deontological arguments in favor of fiduciary duties and against corporate social responsibility csr. Milton friedman on corporate social responsibility the. The social responsibility of business is to increase its. Imagine you make a donation to a school with the understanding that the money would be used for education.
My group in against corporate social responsibility. July 31, 1912 november 16, 2006 was an american economist who received the 1976 nobel memorial prize in economic sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy. Noble laureate milton friedman and his followers, though small in number, do not agree that a business has anything to do with csr. A companys stakeholders are all those who are influenced by, or can influence, a companys decisions and. Pdf friedmans the social responsibility of business is. Because friedman was so inflammatory in his call for a 100% versus 0% handling of the tradeoff, his entire opposition for the entire time since 1970 has focused on making arguments for a. As friedman emphasized, inflation is an old, old disease. The social responsibility of business is to increase its profits milton friedman the new york times magazine september, 1970 when i hear businessmen speak eloquently about the social responsibilities of business in a. There has been used multiple different authors to counter argue friedman s claim bringing up other aspects regarding to csr. The focus on his lecture relates to what he views as problematic areas. Milton friedmans most popular book is capitalism and freedom. Milton friedman and social responsibility an ethical.
Milton friedmans argument about socialist implications of. Milton friedman, recipient of the 1976 nobel prize for economic science, was a senior research fellow at the hoover institution, stanford university, from 1977 to 2006. Despite the apparent acceptance of csr by businesses, many economists have taken a skeptical view of csr and its viability in a competitive environment. Permanent income hypothesis accidental or chance occurrences, though they may, from another point of view, be the predictable effect of specifiable forces, for example, cyclical fluctuations in economic activity.
Milton friedman and corporate social responsibility a. Generally, the text expresses a thought that he agrees with and is going to expound. Books by milton friedman author of capitalism and freedom. Corporate social responsibility and the triple bottom line. Milton friedman, in particular, doubted that csr was socially desirable at all. Corporate social responsibility the world business council for sustainable development in its publication making good business sense by lord holme and richard watts, used the following. On top of spending twentyfive hours a day at their desks, prospective recruits are welladvised to feign enthusiasm about the prospect of spending their weekends planting trees. The second line of argumentation is a utilitarian or broadly consequentialist argument against corporations taking on csr. There is one and only one social responsibility of businessto use it 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. Doc milton friedman critical analysis about csr tapio. Social philosophy and policy center, bowling green state university, 1984 milton friedman, the social responsibility of business is to increase its profits, in peter madsen and jay m.
For milton friedman, what are the social responsibilities of business. A survey of polish manufacturing and service companies, sustainability, 2016, 8, 2, 93crossref. Milton friedman has 109 books on goodreads with 73926 ratings. In this classic book, milton friedman provides the definitive statement of his immensely influential economic philosophyone in which competitive capitalism serves as both a device for achieving economic freedom and a necessary condition for political freedom. As any graduate looking to enter the corporate world will soon realise, recent years have seen an explosion in popularity of the idea of corporate social responsibility csr. Milton friedman believes america can still be the cooperative society in which citizens work together for individual benefit. Milton friedman famously wrote an article entitled, the social responsibility of business is to increase its profits. Milton friedman and corporate social responsibility. The age of milton friedman andrei shleifer between 1980 and 2005, as the world embraced free market policies, living standards rose sharply, while life expectancy, educational attainment, and democracy improved and absolute poverty declined. What are the best answers to milton friedmans arguments. 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. Dunn, phd 3 corporate social responsibility funds received by the church would be used for charitable purposes, for the appropriate level of support of the clergy, or for the aggrandizement of the church and its interests, but the cleric in charge could not legally appropriate the goods of his church. When a preacher gives a sermon, he usually has a text.
More than 40 years ago, renowned economist milton friedman referred to the idea of. No one should consider what is, or why corporate social responsibility should be done, without first reading and understanding his article. Hayek published a piece in 1960 that criticized corporate social responsibility as a norm for economic organizations, although he regarded corporate actions to be subject to essentially the same moral rules as individual action. In our readings last week, freeman and friedman have two very contrasting opinions on the goals and responsibilities of a business. Written 35 years ago, it was not an academic paper published in the new york times magazine. Freeman supports the stakeholder theory in saying that anyone who has a stakeclaim in the firm has the right to be. The following paper is an attempt to critically evaluate the article in consideration of freeman stakeholder theory. There is nothing simpler than stopping an inflationfrom the technical point of. For milton friedman, what are the social responsibilities. Corporate social responsibility csr is an expression used to describe what some see as a companys obligation to be sensitive to the needs of all of the stakeholders in its business operations. From 1928 1932 he studied at rutgers university gaining a baccalaureate in two disciplines concurrently mathematics and. Hence, the corporate social responsibility theory of milton friedman is a counterargument to the stakeholder theory or socioeconomic model.
663 1275 1048 462 566 1379 1140 1001 380 1253 652 1021 42 797 89 332 1547 1331 987 781 36 908 19 1493 1446 845 121 994 1363 1239 48 1189 272 740 852 631 635 375 948 133 406 1313 832 925 1419 1346 369 1234