In other words, take care of profits, and the free market will take care of everything else.Friedman, who died in 2006, wasn’t shooting random mortar shells into the sky.Tags: Critical Thinking Decision MakingImportance Of Literature ReviewEducational Research Proposal TopicsHow To Plan A Business TripContracting Business PlanMacroeconomics Topics For Research PaperGender Roles In Modern Society Essay
There are many reasons why corporate social responsibility is on the table these days.
One is that the sharp rise in business profits since the 2008 crash hasn’t produced a commensurately sharp rise in hiring.
Let’s not forget that the flow of corporate wealth to CEOs and shareholders has helped drive the middle class into income stagnation and debt, impoverishing corporate America’s customer base.
So much of the debate today about corporate social responsibility misses the point.
Occupy Wall Street and its coast-to-coast offspring have catalyzed public disaffection with the gulf between the banking industry’s health and its millions of home foreclosures.
Philanthropy experts say corporate giving has ticked up recently, possibly in response to signs of public discontent.What would Friedman have made of the Supreme Court’s 2010 Citizens United decision, which granted rich corporations the same free speech rights as individuals — including the right to make unlimited political contributions?Here’s what he wrote in that 1970 essay: “What does it mean to say that ‘business’ has responsibilities?But the danger is that if it’s seen chiefly as a PR device, then corporate giving — currently a minuscule one-tenth of 1% of revenue among major corporations, according to the committee’s latest survey — will be first on the chopping block in economic downturns.Moreover, the giving-for-giving’s-sake model always runs up against the notion that the only constituency that counts in corporate management is the shareholder.He was responding to a public debate on the corporation’s role in society launched in the late ‘60s that sounds very much like the direct forebear of Occupy Wall Street.Dissident shareholders at Bank of America, AT&T and dozens of other companies freaked out managements by questioning not their financial results but the “social impact” of their activities, and disrupted annual meetings with demands for proxy votes on such issues as their company’s role in the Vietnam War, its record on minority hiring and its contribution to pollution.In this post-meltdown world we know better, don’t we?His latest book is “The New Deal: A Modern History.” Reach him at [email protected], read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.The modern dean of this school was the late eminent economist Milton Friedman, who in a 1970 article belittled talk of corporate social responsibility as “pure and unadulterated socialism.” Friedman called corporate social responsibility a “fundamentally subversive doctrine.” He conceded that some putatively socially beneficial actions such as improving local schools might have indirect benefits for a corporation — make it easier to recruit employees, for instance — but for the most part he scorned that rationale as “hypocritical window dressing.” Friedman maintained that society would benefit as a whole only if managements focused on increasing profits “within the rules of the game,” which meant without deception or fraud.That would provide customers with the best products and prices, workers with sustainable employment, and shareholders with plenty of money to spend on their own choice of good works, if they so wished.