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Milton Friedman on business, profit, and social responsibility

Friedman on the responsibility of corporate executives to their stockholders, and on businessmen who oppose competition for themselves.

17 passages in the archive10 checked against the source7 not yet checked
  1. In a reaction that has become only too familiar, the big-government coalition has been threatening dire consequences if Jarvis-Gann passes: police and fire departments “crippled,” bond issues in “default,” “bankrupt schools.” The opposition is preparing to launch a major media blitz to be financed in large part by big business, which apparently has let fear of Sacramento trigger its unerring instinct for self-destruction.
    A Progress Report
    Column, 1978, Newsweek (April 10, 1978); reprinted in the Congressional Record, Extensions of Remarks, April 4, 1978, pp. 8709 to 8710, introduced by Representative John H. Rousselot of California, who describes it as “his byline article which appeared in the April 10, 1978 issue of Newsweek”, Congressional Record, April 4, 1978, pp. 8709 to 8710
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  2. The broader and more influential organisations of businessmen have acted to undermine the basic foundation of the free market system they purport to represent and defend.
    The Suicidal Impulse of the Business Community
    Lecture, 1983
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  3. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means.
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
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  4. The elementary fact is that ‘business’ does not and cannot pay taxes. Only people can pay taxes. Corporate officials may sign the check, but the money that they forward to Internal Revenue comes from the corporation’s employees, customers, or stockholders.
    An Economist's Protest: Columns in Political Economy
    Book, 1966, p. 86
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  5. But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not of business.
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
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  6. Well, the way in which many economists have implicitly reconciled it is by being in favor of the free market in general and opposed to the free market in particular. This area is a special case. It needs regulation. This area is a special case. You know, the same thing happens to businessmen. Every businessman is in favor of private enterprise. Except for himself.
    The Open Mind
    Interview, 1977, The Open Mind, hosted by Richard Heffner, Episode “A Nobel Laureate on the American Economy” (May 3, 1977)
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  7. Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. This is a fundamentally subversive doctrine. If businessmen do have a social responsibility other than making maximum profits for stockholders, how are they to know what it is? Can self-selected private individuals decide what the social interest is? Can they decide how great a burden they are justified in placing on themselves or their stockholders to serve that social interest?
    Capitalism and Freedom
    Book, 1962, Ch. 8 Monopoly and the Social Responsibility of Business and Labor, p. 133
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  8. The difficulty of exercising “social responsibility” illustrates, of course, the great virtue of private competitive enterprise—it forces people to be responsible for their own actions and makes it difficult for them to “exploit” other people for either selfish or unselfish purposes. They can do good—but only at their own expense.
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
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  9. The greedy, selfish oil interests? If, as is frequently charged, they have conspired to create a shortage profitable to themselves, why have they been so slow? They are no more powerful now than they have been for many years. Why did they wait so long before squeezing the hapless consumer? And how do they make profits by having no oil to sell? By full-page advertisements urging consumers to economize on fuel? This is simply the irrational search for a devil.
    Why Now?
    Column, 1973, Newsweek (December 31, 1973); reprinted in full in the Congressional Record, Extensions of Remarks, January 24, 1974, p. 801, introduced by Representative John M. Ashbrook, who gives the issue as “the December 31, 1973 issue of Newsweek”, and reprinted again the same day at pp. 807 to 808 by Representative Earl F. Landgrebe, Congressional Record, January 24, 1974, p. 801
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  10. An income tax intended to reduce inequality and promote the diffusion of wealth has in practice fostered reinvestment of corporate earnings, thereby favoring the growth of large corporations, inhibiting the operation of the capital market, and discouraging the establishment of new enterprises.
    Capitalism and Freedom
    Book, 1962, Ch. 13 Conclusion, 2002 edition, p. 198
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  11. That is why, in my book “Capitalism and Freedom,” I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “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.”
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
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  12. In fact they are—or would be if they or any one else took them seriously—preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
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  13. So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not.
    Milton Friedman Responds
    Interview, 1974, Chemtech, p. 72
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  14. With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves.
    The Suicidal Impulse of the Business Community
    Lecture, 1983
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  15. Just as we speak of non-tariff restrictions on international trade, I regard the kind of thing you're talking about as non-tariff restrictions on internal trade.
    Interview with Milton Friedman
    Interview, 1992, Federal Reserve Bank of Minneapolis, The Region, Interview by David Levy, June 1, 1992
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  16. What does it mean to say that “business” has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities, even in this vague sense.
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
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  17. That is a widespread myth, that it is possible to spend money with nobody paying for it. You have everybody screaming that we ought to have new, bigger, more generous government programs. Where are we going to raise the money? Tax business. But business corporations can’t pay any taxes. A corporate executive may sign the check, but where does he get the money? From his stockholders or from his customers or from his employees. Unlike the federal government, he doesn’t have a printing press in his basement. So the only way he can pay money to the government is imposing a burden on somebody. Government cannot spend money at nobody’s expense.
    Economic Myths and Public Opinion
    Column, 1976, The Alternative: An American Spectator, vol. 9
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