Biography of Milton Friedman

Milton Friedman is a well-known economist and writer from Brooklyn, New York. His influential writing has sparked many debates on the limits of a company’s duty to perform Social Responsibilities within a society.

A famous quote taken from his book Capitalism and Freedom, details that ‘there is one and only one social responsibility of business- use its resources and engage in activities designed to increase profits as long as it stays within the rules of the game’ . He feels that Directors or CEO’s of a business have a ‘’direct responsibility’’ to their employee’s i.e. its shareholders, and so therefore should aim to ‘’make as much money as possible while conforming to their basic rules of society’’ both in law and ethical custom.

Friedman argues that, for example a corporate executive has a responsibility to his employers, which is usually to make as much money as possible for the company while conforming to the laws and ethical customs of the society. This employer, outside his work, may devote his time and money to certain charities that he regards as worthy and while these are social responsibilities they are the individual’s social responsibilities, not the company’s. Friedman in a sense says how entities have responsibilities; it is the people that have the responsibilities. A corporation in a way is too vague of an entity to assume responsibilities. Again, he feels ‘’that the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation…. And his primary responsibility is to them’’ . The only responsibility a director should have is to its shareholders and not to society or any other interest group or public good. And so if the interest of the shareho...

... middle of paper ...

...this idealism that a company needs to have self-interest. One student in a heated debate described how a man in Ohio could not afford his electricity bill and so they turned off his electricity as it was not profitable for them to keep it on, subsequently the man died . The student also goes on to demonstrate another argument against his views involving the well know car manufacturer Ford. Ford, he says, produced the Ford Pinto knowing that any rear end collision the car would subsequently explode due to the failure of installing a $13 block of plastic in front of the gas tank. He described that Ford’s internal memo estimated that it would cost 200 lives per year at a cost of $200,000 per life. They then calculated the cost of installing this Block of plastic to prevent this from happening which resulted in the cost being more than the cost of those people’s lives.