Milton Freidman On The Concept Of Social Responsibility Essay

Milton Friedman, who was a prominent economist, wrote a thought-provoking article in the New York Times Magazine in 1970 on the subject: social responsibility and ethics in strategic management. The one end of the economic policy spectrum, Adam Smith, influences Freidman. Smith embraces the knowledge that consumer and producer control the stability of the economy. This is based on free market equilibrium. Freidman most renowned quote is “There is one and only one social responsibility of business-to increase its profits.” The above quote clearly state his opinion on the concept of social responsibility. Freidman argues against the concept of social responsibility and his reasoning’s of corporations having one responsibility that is to make money, which has made him quite legendary.

In a business perspective, Freidman considers “social responsibility” as “act in some way that is not in the interest of his employers.

For example, that he …social objective of reducing poverty”. Thus, according to Freidman, profit maximization is the sole responsibility of a firm and spending shareholder money for the social interest is not ideal. This statement is less compelling to me as I believe social responsibility means: the right quality of life is given and human rights is not sacrificed or compromised in order to attain your opportunities or demands. Freidman illustrates that he is against social responsibility by stating: “there is one and only one social responsibility of business–to use it resources… without deception or fraud." Due to these reasons, I do not agree with Friedman arguments, because he believes that social interest can harm the organization’s productivity; whereas, I disagree and highly believe there are many benefits in taking lead in social interest and

responsibility.
I agree with Thomas Homer-Dixon’s view that the events in the world are bound to happen and it is broken up into many pieces. Such events can be controllable to an extent by learning from the past and not repeating it. Dixon wrote a segment titled “Tectonic Stresses in his volume “The Upside Down Catastrophe, Creativity, and the Renewal of Civilization”. Dixon’s arguments are on the foundations of the five stresses (population, energy, environmental, climate, and economic) that will impact a corporation’s efficiency. Dixon claims that to increase productivity and efficiency, the redundancy must increase and the complexity decreases and should be simple. Unlike Freidman, Dixon uses past experience to support his model; for instance, the blackout tragedies that occurred in September 2001 and 2003. Dixon emphasizes that the results of the stresses can range minimal to disastrous; but if we recognize them, end the problem, and start to change and implement a new direction to operate; then, the impact can be controllable (less disastrous or stoppable). This was proven with examples as how firms and individuals operated and controlled their external stresses throughout the blackout and during World War and Great Depression. Dixon expresses he is a key holder of the past. He believes that experience and past knowledge shapes the future better. Thus, that is a reason why I believe his foundations are more convincing than Freidman’s.
Overall, I favour Dixon’s philosophy over Friedman’s principles because I agree that a business organization must not only be in concern with profit maximization but also be concerned with its social corporate reasonability. The business should consider individuals that add valuables by making positive impacts in the organizations. Dixon’s arguments are more realistic as it involves the five external stresses and are also more convincing than Freidman’s facts since he supports his findings with past experiences where Freidman provides more of a judgment rather than a fact. Overall, Dixon’s claims were more prominent in my opinion.