Question
Course event
In 1970 Milton Friedman claimed that the only social responsibility of business was to increase profits. Compare and contrast the evidence presented by Freidman with that provided in the IPCC Fifth Assessment Report summary videos. In light of the available evidence, discuss whether you believe Friedman’s claim is valid.
Sample paper
Course Events
Milton Friedman has a very different perspective about the social responsibility of business compared with what we all consider to be right. According to Milton Friedman, the main role of a business is to make profit and not to give attention to any social interest of other people. In most cases, social responsibility activities are tasked with the corporation. This makes it hard to clearly identify the actual individual that is responsible for those social activities. In Friedman’s views, in a private-property, free-enterprise system, a corporate executive is not the business owner, but an employee. The direct responsibility of this employee is not to society, but to his or her employer. This means the employee is bound by the employers’ rules and instruction and can only perform business as per their desires. In most cases, enterprise owners’ desire is to maximize profits while adhering to basic social rules required by the law and that are dictated by the ethical duties in the industry of operation. According to Friedman, a manager or an executive in a corporation is simply an agent who operates based on conditions given by others (owners). This person does not have the ability to decide on social responsibility unless authorized or unless the owner is ready to take the cost[1].
To some extent, Friedman’s stand on social responsibility matches what IPCC advocates for. Since an executive officer does not have the power to decide on such things, corporations should embrace social responsibilities by creating organizational policies to implement them. This means corporations should authorize their agents to embrace social responsibilities during their operations and embrace the cost associated with the same. According to Friedman, corporation agents are only required to follow basic rules as defined by the law and ethical norms. IPCC affirms this by advocating for the formation of rules or government regulations that demand environment conversation. Based on those laws, industries must devise ways to control the amount of emission they produce, or incur carbon tax among other charges. When such laws are implemented, then it becomes easier for all corporations to be socially responsible simply by observing basic societal laws imposed by the governments.
One of the main differences between IPCC and Friedman’s view is that in IPCC, human activities are regarded as the main cause of climatic change. Control of human activities through being responsible for own actions would make a great difference in reducing this effect. So according to IPCC companies should find a way to confirm their emission which include trapping the gases and store them in underground archives. Friedman, on the other hand, does not think corporations should consider adding to their cost due to social goodness. Making a profit should be their core goals, and thus, if not forced, they should ignore such activities. Such an attitude in IPCC views are among the main cause of the negative climatic change experienced today and its change can ensure control of excessive greenhouse gases emission[2]. While IPCC calls for taking responsibilities at individuals’ operational levels, Friedman calls for ignoring such cost if not forced by the law to incur them. In Friedman’s view private, free enterprises do not have any responsibility toward the society, but toward the owner. This statement discourages any small move to reduce pollution for the sake of our environment, and encourage working without employing any measures that would increase operational cost and reduce profitability. On the contrary, IPCC believe observing human activities at individuals’ level can play a great role in reducing greenhouse gases emission in the world. The two thus show consensus in some issues and disagreement in others.
References
Friedman, Milton. “The Social Responsibility of Business is to Increase its Profit.” The New York Time Magazine, 1970 September.
IPCC. “Fifth Assessment Report – Synthesis Report.” 2015 December. https://www.youtube.com/watch?v=fGH0dAwM-QE
[1] Friedman, Milton. “The Social Responsibility of Business is to Increase its Profit,” The New York Time Magazine, 1970 September.
[2] IPCC. “Fifth Assessment Report – Synthesis Report,” 2015 December. https://www.youtube.com/watch?v=fGH0dAwM-QE
