Critique of Milton Friedman's Essay ‘the Social Responsibility of Business Is to Increase Its Profits'

Critique of Milton Friedman's Essay ‘The Social Responsibility of Business Is to Increase Its Profits’

Milton Friedman’s essay “The Social Responsibility of Business is to Increase its

Profits” is based largely on the presumption that defining “responsibilities” of a business

entity can never be the same as the concept of responsibilities for a human being. The

argument largely revolves around the idea that responsibilities to the society can be there

for a corporate manager as an individual, but not as a representative of a business entity, as

he/she is in effect just an employee who works for the owners of the company, and if he

spends money for such social responsibility engagements, he is basically “imposing taxes”

on the business, which is futile, as Milton believes that the executive is unlikely to be able to

anticipate the social consequences of such actions, and it imposes costs on customers,

stockholders, or employees, which in turn will make him lose his power.

The primary critique-point of this article is based on the fact that the light in which

the notion of “imposing taxes” is seen, is very different from the realities of a socially

responsible corporate manager. Firstly, the costs associated with such activities are never

“imposed” on the parties involved in the business, and it clearly distinguishes the notions of

“expense” from “taxes”, as it is never