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Showing posts from January, 2012

The Social Responsibility of Business Is to Increase … What Exactly?

You might disagree with Milton Friedman’s famous claim that the sole social responsibility of business is to increase its profits. But you can’t deny that it sounds simple and straightforward. Here’s the full Friedman, as originally expressed in his 1962 book Capitalism and Freedom , then exposed to a larger audience in a 1970 New York Times Magazine article : There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. Elegant, no? Same goes for the theories of corporate governance that it inspired. Any other theory of how business ought to behave is going to sound muddled and inconsistent in comparison. Even if it’s closer to being right. That thought kept coming back to me as I read John Taft’s new book Stewardship: Lessons Learned from the Lost Cult