Topic > Milton Friedman Biography - 885

Milton Friedman is a well-known economist and writer from Brooklyn, New York. His influential writings have sparked many debates about the limits of a company's duty to carry out social responsibilities within a society. A famous quote from his book Capitalism and Freedom explains in detail that "there is one and only one social responsibility of business: to use its resources." and engage in activities aimed at increasing profits as long as they remain within the rules of the game' . He believes that the directors or CEOs of a company have a "direct responsibility" towards its employees, i.e. its shareholders, and therefore should aim to "earn as much money as possible while respecting the fundamental rules of the company", both in terms of law and ethical customs. Friedman argues that, for example, a corporate manager has a responsibility to his employers, which is usually to earn as much money as possible for the company while abiding by the company's laws and ethical customs. This employer, outside of his job, may dedicate his time and money to certain charities he considers worthy, and while these are social responsibilities, they are social responsibilities of the individual, not the company. Friedman in a certain sense says how entities have responsibilities; it is the people who have the responsibilities. A corporation is in a sense too vague an entity to take on responsibilities. Again, he believes that "the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the company...". And his main responsibility is towards them''. The only responsibility a director should have is to his shareholders and not to the company or any other interest group or public good. And so if shareholder interest... at the heart of the paper... this idealism that a company needs to have self-interest. A student in a heated debate described how a man in Ohio could not afford his electricity bill and so they turned off his electricity because it was not profitable for them to keep it on, subsequently the man died. The student also goes on to demonstrate another argument against his views involving the well-known car manufacturer Ford. Ford, he says, produced the Ford Pinto knowing that in a rear-end collision the car would subsequently explode due to the failure to install a $13 block of plastic in front of the gas tank. He described that Ford's internal memo estimated it would cost 200 lives per year at a lifetime cost of $200,000. They then calculated the cost of installing this plastic block to prevent this from happening, which resulted in a cost greater than the cost of those people's lives..