Answer to Question #67316 in Economics of Enterprise for Sonali Jain

Question

Milton Friedman argued,”Few trends could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.” Give two arguments in support of Friedman’s assertion and two against.

Answer 1

In these words, Friedman shifted from economic analysis to ethical advocacy in exhortations that impress me as having been disastrous for the whole world. His often repeated claim, that it is unethical—downright subversive—for a corporation or labor union to accept any social responsibility other than to benefit its shareholders or members has hurt us all. Friedman recognized that “the invisible hand” that is supposed to guide free markets for everyone’s benefit needs our help in a “framework of law” that establishes the “rules of the game,” and he instructs everyone to stay within its boundaries. But in these lines he said nothing about the moral duty of corporations and labor unions voluntarily to restrain themselves from harming people and damaging the environment.

Reference:
https://spectrummagazine.org/article/column/2008/12/30/milton-friedman-master-disaster