Milton Friedman must be stopped!
In contrast to my views on Naomi Klein (see below) I think Milton Friedman is a dangerous extremist. I've just read his 1970 article 'The Social Responsibility of Business is to Increase it's Profits' which appeared in the New York Times Magazine in 1970. I think it's a particularly nasty bit of polemic. Here's a flavour
"Businessmen who talk this way (advocate social responsibility) are unwitting puppets of intellectual forces that have been undermining the basis of a free society for these past decades"
"the businessman... is to be simultaneously legislator, executive and, jurist"
Aside from anything else the piece suggests that Milton never took the time to read anyone elses political philosophy, he just wrote down the first few things that popped into his red scare addled mind. So here's a question for Milton.
As a socially responsible individual I don't play loud music at 3 in the morning even when I want to. My neighbours would be pissed off. I voluntarily choose to limit my actions in the name of social responsibility. This is an instance of 'negative responsibility' I choose not to do something.
Now if I am managing a construction company I may discover that the cheapest time to do road maintenance is in the middle of the night, and that doing so would be legal. It'll wake up the neighbourhood, but thanks to the country I'm in I can't be sued or prosecuted.
As moral people neither I nor any of my employees would want to wake up the neighbourhood. But as employees Friedman argues that we should. Thanks to the miracle of incorporation we are now resolved of all moral responsibility which has been transferred to the shareholders. Moreover, since shareholders hold a 'universal portfolio' (or they would if they were rational) it seems every one in the world has a say in whether or not I wake up the neighbors. At any rate this will have to go to a board meeting and be voted on.
Clearly not all decisions like this should go to the board. Imagine the weekly list of neighbourhoods which may or may not be disturbed or the endless requests as to whether this or that garbage dump should be used. My construction company will set a policy. I imagine it will tell me to be socially responsible, trust my own judgement, do what they would do. After all, the shareholders are by and large moral folk who don't believe in waking people up at night, were each and every one of them in my shoes a clear majority would choose not to dig up the road. Since they have no interest in adjudicating separately each and every moral dilemma faced by their employees they choose to set a policy. They choose to be socially responsible.
Alternatively the shareholders, who as individuals can exercise their own moral choices choose to maximise profits. People are woken up. Garbage is placed in less than ideal places. Every company everywhere suddenly loses its moral compass. There will be protests, governments will intervene. Regulations are enacted and enforcement officers recruited. The state balloons out of all proportion in an attempt to impose the morals of it's constituents on its coroporate bodies. Taxes rise.
What I'm trying to get at is a conception that social responsibility is necessary to the smooth functioning of an economy. By adopting a set of social conventions we avoid the costs of regular decision making or constant supervision and regulation. We also allow each and every one of us to own shares in the knowledge that our investments are moral ones that we would choose to make on an individual case by case basis.
Now this doesn't work either, but that's because companies fail to be responsible - not because they try at all.