Social Responsibility in Business – Essay Sample

“The Social Responsibility of Business is to Increase Its Profits” by Milton Friedman

Milton Friedman’s text “The Social Responsibility of Business is to Increase Its Profits” can be understood as an ethical justification for the free market system and the ideology of capitalism. In essence, Friedman contends that the free market system itself possesses an ethical aim, insofar as the profits generated by a well-run business ultimately possess a positive effect on society. To restrict business to some greater ethical objective for society, according to Friedman, implies that business practice and theory must be sacrificed to an abstract aim that ultimately hinders the individual company. For example, as Friedman suggests, a business that would deliberately lower its prices to combat inflation could hurt the individual company and have negative societal effects, such as employees necessarily being laid off, since the business can no longer compete.

Friedman’s argument is thus radically individualistic. He opposes the possibility of greater societal projects and the potential of society working in a more organic and holistic fashion. Friedman thus presupposes that such a vision of society is impossible. The author posits, in essence, that business is more fundamental to society than society itself: business is what determines society, as opposed to business merely being a segment of the social construct.

This presents an overtly naïve view of how both business and society function. Friedman submits to the notion that capitalism and the free market is the best type of economic and social practice that can be realized. The obvious empirical facts of the existence of corrupt business practices, such as Enron, clearly contradict this claim. Friedman therefore ignores the exploitative aspect of business, and as such, his arguments for the ethical essence of free enterprise are explicitly false. Accordingly, Friedman essentially presents an argument that attempts to justify the existence of free enterprise against the possibility of a greater social ethics, thus conflating the free market system with human existence itself: his worldview underscores a responsibility to the free market, as opposed to a responsibility to others.

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