Sunday, November 20, 2005

Friedman and my midterm

Creeeping Collectivism!
creeping collectivism

Working on my midterm here and that same "Social Responsiblity" question came up again. if you'll remember, last time that question was posted on a test, I answered with some quotes from Milton Friedman, a Nobel Prize winning economist, who believed that social responsiblity was the Communists trying to tear down the capiltalist marketplace and steal our precious freedoms while polluting our bodily fluids.

So, here's the question again, and this time I acutally have the book, so I have to post something resembling a correct answer. Follows is my answer:

(sorry, no Friedman quotes this time - I have the book, so here is page 116)
Social responibility can be implimented by contributing time and money to charitible, cultural and civic organizations. Responsibility can also be demonstrated by limiting the impact on the environment their operatiosn make. Socially responsible companies hire a diverse workforce. They also adopt policies to contribute to the quality of life of their workers.

(Wow - the book never even mentions Friedman. I figure with a NOBEL PRIZE in economics, he'd be at least given short shrift, but no! just mealy mouthed comsymp statments like "most experts agree that socially responsible firms will eventually be rewarded by their markets and stakeholders" Holy bat, Crapman! Call Joe McCarthy - this book is part of the Red Menace!)

Last time I got the answer right - wonder what he'll do with this one. Click the Time and Date below to see the commets, where I posted the answer I used in the last quiz....

1 comment:

Will England said...

What'd I put for my original answer?

First, I don't have the book, so I'm winging this one. To take the Freidman view, only people have responsibilities - a corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities. The individuals who run the company have responsibilities, but their primary responsibility is to the owners of the company. That responsibility is to conduct the business accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society. (Friedman, 1970) Spending the companies money for "social responsibility" or for the good of the common people directly reduces the revenue of the company, and is in effect, stealing from the owners of the company. In the case of a corporation, often the very people you are "helping" with the donations, are shareholders - you are stealing from the people you are trying to help. Social responsibility is often used as a politically correct way to cloak actions that will directly or indirectly benefit the company over the long run - devote resources to the community to provide more services, help to improve the government, schools or local environment. These actions may make it easier to attract quality employees, may give the company tax benefits, or may build good will in the community. These all benefit the company. Friedman views that by applying "social responsibility" to a corporation, you are devaluing the real purpose of a company - to make money for the owners. The company is not there to provide subsidies for schools, to build parks, or to equalize the social condition of the people. Forcing such standards upon companies undermines the free market and and brings more collectivist ideas to the forefront. Friedman calls social responsibillity a "fundamentally subversive doctrine" (Freidman, 1970). Friedman, Milton. (1970). "The Social Responsibility of Business is to Increase its Profits (Online)". The New York Times Magazine, 09/13/1970. Retrieved from