Milton Friedman Social Responsibility Critique

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Date Submitted: 11/25/2010 10:33 AM

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Critique of Milton Friedman's Essay, “The Social Responsibility of Business is to Increase its Profits” Shades of Grey: A Case for Corporate Consideration of Social Responsibility In his essay entitled The Social Responsibility of Business is to Increase its Profits, Milton Friedman argues that corporations should dedicate themselves to the single pursuit of maximizing profits. In Friedman's opinion, corporations are responsible to shareholders and employees, and not to the broader society as a whole; therefore, corporate executives should disregard the social impact of their activities so long as their behavior falls within the realm of legality. However, in crafting his argument, Friedman relies on a number of logical fallacies, including false dichotomies and false associations, to stir his reader's emotions. By constructing a black-and-white world where profits and social good are mutually exclusive, social responsibility equates to socialism, and employees are divorced from society as a whole, Friedman's narrow argument lacks nuance and analytical rigor, and fails to convince the sophisticated reader of its intellectual merits. First and foremost, Friedman forces the reader to take a side by constructing a false dichotomy between profits and social responsibility. He claims that the single goal of the corporation should be to maximize its profits; therefore, any regard for social responsibility that is detrimental to profits is damaging to stockholders and stakeholders. What Friedman fails to recognize is that in today's modern world, a company with visionary management can aim to profit while also striving to contribute to social good; not only as a cheap publicity stunt or to “look good” as Friedman claims, but to genuinely contribute to social welfare. Corporations that practice corporate social responsibility do so in order to generate a difficult-to-quantify, yet very real, positive utility to stakeholders. For example, many companies today are “going...