Milton Friedman was a brilliant economist and, like all economists, a moral philosopher. His pronouncement in 1970 that the only social responsibility of business was to “use its resources and engage in activities designed to increase its profits…” has been taken to heart by two generations of business leaders – perhaps a bit too much. Friedman was talking about what we now call corporate social responsibility (CSR), an expense in his view that undermined a corporation’s true purpose: to create jobs, returns for investors and downstream wealth effects for society.
In this respect, Friedman was out of step with Adam Smith, the 18thCentury economist and philosopher who hated corporations as much as he hated government interference in the productive purpose of work and business. He believed that efficient markets and general welfare resulted from the local business owners bearing the cost of their enterprise and sharing the values of their communities. He viewed government primarily as an instrument for extracting taxes to subsidize elites and for intervening in Continue reading “Milton Friedman, Adam Smith and the Business Roundtable”