A critique of Milton Friedman's essay ‘the social responsibility of business is to increase its profits’

✍ Scribed by Thomas Mulligan

• Publisher: Springer
• Year: 1986
• Tongue: English
• Weight: 478 KB
• Volume: 5
• Category: Article
• ISSN: 0167-4544
• DOI: 10.1007/bf00383091

✦ Synopsis

The main arguments of Milton Friedman's famous and influential essay are unsuccessful: He fails to prove that the exercise of social responsibility in business is by nature an unfair and socialist practice.

Much of Friedman's case is based on a questionable paradigm; a key premise is false; and logical cogency is sometimes missing.

The author proposes a different paradigm for socially responsible action in business and argues that a commitment to social responsibility can be an integral element in strategic and operational business management without producing any of the objectionable results claimed by Friedman.

In his famous essay, Milton Friedman argues that people responsible for decisions and action in business should not exercise social responsibility in their capacity as company executives. Instead, they should concentrate on increasing the profits o f their companies. 1

In the course o f the essay, he also argues that the doctrine of social responsibility is a socialist doctrine.

The purpose o f this paper is to assess the merit o f Friedman's arguments. I shall summarize his main arguments, examine some of his premises and lines o f inference, and propose a counter-argument.