Essay about Ethics: Social Responsibility and Milton Friedman

Submitted By rebelt0323
Words: 632
Pages: 3


Property Paper

Businesses in America are managed in many different ways. Is there a correct, moral, or wrong

way? I will discuss the view of two men Milton Friedman and John Mackey, who are both trying to

show that their way is the correct and ethical way of owning and running a business, and that others

should follow. Milton Friedman states “there is only one social resposibility of businesses, to use its

resources and engage in activities designed to increase profits so long as it engages in open, free

competition, without deception or fraud.” John Mackey aslo believes that maximizing profits is

essential but, with that comes a resposibility to customers, employees, suppliers, and the community.

Milton Friedman believes that there is no extent of responsibility in owning a business other

than profit, and that social responsibilities are only part of a person and not of a business. Executives

are appointed to run a business by the owners and should do this by direct responsibility towards the

owners and make as much money as possible, or in cases such as a hospital, provide certain services.

An executive with feelings towards their family, community, church, or a charity according to

Friedman, should do so only with their own money and not that of the business in which they were

appointed to run. By saying an executive has a social responsibility does not include business activities.

It is only on a personal basis. A businessman that decides on not raising prices, in order to help their

customers and prevent inflation (even though an increase would benefit the company), would be

spending someone elses money for a general social interest. This in turn could, could reduce returns to

stockholders. By being hired or appointed by stock holders, involves being a legislator, executive, and

jurist all at the same time. As difficult as this balance may be, it should be done so that the stockholders

believe in the executive to do what is in the best interest of them. Friedman allows some small

exceptions when it comes to trade unions and individual proprietors. When an individual proprietor

decided to act in a way of social responsibility, he is spending his own money. This is not using

anyones elses money other than his own. Friedman says businessmen that exercise social responsibility

are short sighted and muddle-headed. Kudos may be earned in the short run by executives that do these

things in the name of social responsibility, but it also…