“The Social Responsibility of Business Is to Increase Its Profits” by Friedman

Companies are built, and business is developed in order to gain some profits, and the orientation to receiving more profits is the main responsibility of business. This point of view is discussed by Milton Friedman in his article “The Social Responsibility of Business Is to Increase Its Profits”. Friedman argues that the concept of social responsibility is irrelevant to be used in relation to business because only persons can have the definite social responsibility as well as the moral one and can regulate their actions according to this responsibility when a business develops according to the law of profits. Friedman’s idea can be discussed from several perspectives because there are companies that are oriented to gaining profits along with addressing the communities’ needs, and the author pays much attention to the correlation between the business’s responsibility and political influence and consequences.

Friedman states that the doctrine of social responsibility is the socialistic doctrine. However, it is inappropriate to refer to the socialistic principles within the free-market environment where the main business goal is profits. Thus, according to Friedman, the concept of social responsibility is supported by those persons who follow the socialistic principles and ideas because they try to focus on the ‘social ends’. Friedman notes that these businessmen are “preaching pure and unadulterated socialism” (Friedman 173). These persons can be discussed as rather naïve from Friedman’s point of view, and the author is addressing these businessmen in his essay.

The author develops his idea and stresses that it is a controversial point to speak about the business’s social responsibility because “only people can have responsibilities” (Friedman 173). Speaking about the business’s responsibility, it is possible to refer to the manager’s individual responsibility. However, in this case, the manager is responsible for addressing the shareholders’ interests but not the other stakeholders’ ones (Mackey). According to Friedman, this responsibility is natural because shareholders are oriented to receiving some profits, and the manager’s task is to work according to this direction, and the manager is “the agent of the individuals who own the corporation” (Friedman 174). From this point, the idea of increasing profits is discussed as more relevant in comparison with the idea of the business’s social responsibility performed by the manager.

Friedman concentrates on the fact that when managers devote company resources to ‘social ends’ they use their own resources instead of the company’s ones (Friedman 174). That is why this activity cannot be discussed as an example of the business’s social responsibility. Nevertheless, many companies organize their activities to address the communities’ needs, and the managers’ task is to regulate these activities (Carson). Thus, Friedman’s argument cannot be used to analyze all the possible variants of the situation. However, it is important to determine situations when businesses ‘do good’ for communities, but these actions are challenged with the issues of taxation and other social and political questions. That is why it is the responsibility of the elected officials to address social needs.

Thus, according to Friedman, the concept of social responsibility should not be used in relation to business in the situation of the free market. Businesses are oriented to receiving profits, and the managers’ task is to address the interests of shareholders, but not the public and community. Moreover, the socialistic principles reflected in the idea of social responsibility are rather harmful to the business’s growth.

Works Cited

Carson, Thomas. “Friedman’s Theory of Corporate Social Responsibility”. Business & Professional Ethics Journal 12.1 (1993): 3-32. Print.

Friedman, Milton. “The Social Responsibility of Business Is to Increase Its Profits”. The New York Times Magazine 13 (1970): 10-18.

Rpt. in Corporate Ethics and Corporate Governance. Ed. Klaus Richter, Markus Holzinger, and Walther Zimmerli. New York: Springer, 2007. 173-178. Print.

Mackey, John. Rethinking the Social Responsibility of Business. 2005. Web.

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NerdyRoo. "“The Social Responsibility of Business Is to Increase Its Profits” by Friedman." May 29, 2022. https://nerdyroo.com/the-social-responsibility-of-business-is-to-increase-its-profits-by-friedman/.

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NerdyRoo. 2022. "“The Social Responsibility of Business Is to Increase Its Profits” by Friedman." May 29, 2022. https://nerdyroo.com/the-social-responsibility-of-business-is-to-increase-its-profits-by-friedman/.

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NerdyRoo. (2022) '“The Social Responsibility of Business Is to Increase Its Profits” by Friedman'. 29 May.

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