The Social Responsibility of Business is to Increase its Profits: Synopsis Businessmen bragging about a business' social responsibility is just

that: bragging. Businessmen ho claim that they support employment or the elimination of !iscrimination are too blin!e! by themsel"es to see that a business in a free mar#et economy has not social responsibilities. $irst% e must as# ho a business coul! ha"e responsibilities. & single business or corporation is sai! to be an artificial person% an! coul! be sai! to ha"e responsibilities% but o"erall% a business cannot be sai! to ha"e a responsibility. 'e must instea! as# hat a business' responsibilities implies for each an! e"ery one of us. In a free mar#et economy% a corporate e(ecuti"e has responsibilities to the people abo"e him )the o ners*. This responsibility in this case is to con!uct the affairs of the business ho the o ners ant it% normally in the pursuit of profit. +o e"er% a philanthropic business may ha"e a !ifferent man!ate% in hich case the e(ecuti"es ha"e !ifferent responsibilities. In either case% the e(ecuti"es primary responsibility is to the o ners of the business. The criteria may be strait for ar!% but this !oes not mean it is al ays easy to ju!ge ho ell he is performing his tas#. The e(ecuti"e may ha"e other responsibilities outsi!e of or#% inclu!ing those to family% church% country% etc. These are consi!ere! social responsibilities% but the e(ecuti"e is acting as an in!i"i!ual% not as a member of the corporation% so this is not relate! to the social responsibilities of a business. 'hen it is sai! a corporate e(ecuti"e has a social responsibility in his capacity as a businessman% it is mean that he acts in ays that are not purely in the interests of his employers. $or e(ample% using e(tra money to help pre"ent pollution% e"en though the company is not brea#ing any la s regar!ing this topic. In this case% the e(ecuti"e is spen!ing someone else's money )the o ners* for the promotion of his o n social interests. +e is spen!ing the money of e"eryone ho is connecte! ith the business )o ners% employees% stoc#hol!ers% etc* just to further his o n social interests. This process% of effecti"ely imposing ta(es% an! !eci!ing ho the procee!s ill be spent% is an e(ample of principle an! conse,uences. Principally% the imposition of ta(es an! the spen!ing of procee!s is a go"ernment function. In the go"ernment% there are many chec#s an! balances to ma#e sure the collection an! e(pen!iture of ta(es remain separate. Because a business lac#s this system of chec#s an! balances )an! because no one "ote! him into po er* the e(ecuti"e is acting as a !ictator% boun! only by moral beliefs. The ,uestion then arises% if the e(ecuti"e ere to spen! our money a ay e !o not ant it spent% ho coul! he be remo"e!. In a pri"ate sector business% there is not much the public coul! !o. The company o ners might remo"e him if his conscience causes a loss of sales% but other than this% there is not much e coul! !o !irectly. In a pri"ate sector business% the stoc#hol!ers )current or future* coul! fire him. This also is calle! into ,uestion hen tra!e unions are in"ol"e!. Tra!e unions )at least the larger ones* ill not ta#e any age cut hatsoe"er% an! therefore ill be oppose! to any social programs impose! by the higher-ups in the company. .n the other han!% if the social programs actually !o pan out% they are much faster ays of increasing the ,uality of life than aiting for ne la s or legislation to change things. +o e"er% li#e &!am Smith sai! about the benefits of those ho affect tra!e% the argument must be rejecte!. Someone ho uses unregulate! ta( money for the promotion of his o n social programs is !oing so because he as unable to !ra people to his si!e% an!

therefore is a"oi!ing the !emocratic process. /ssentially% he may thin# he is !oing goo!% but one man's goo! is another man's e"il. The situation is much the same hen stoc#hol!ers ben! to the ill of acti"ists. They are putting forth ne social programs not al ays in the best interest of the company or the people. The situation is not the same% ho e"er% in the case of an in!i"i!ual proprietor. If someone uses their o n money for the promotion of a certain social program% that is perfectly alright% an! in many cases encourage!. +o e"er% no one is perfect an! in many cases% hen a corporation claims to intro!uce a social program% it is usually a shiel! for something else% normally something more selfish. 'hile this may be self ser"ing in the en!% for the most part it !oes goo! in the long run% an! if you can ignore the !ishonesty on the part of the corporation% this is perfectly alright. This main concern ith this is the !eception le"el ill ma#e consumers belie"e that corporations are illing to !o anything necessary to earn a greater profit% an! this ill lea! to an outcry for more go"ernment regulation on the free mar#et. 0othing #ills the free mar#et faster than go"ernment regulation. This short-sighte! "ie of the economy is hat ma#es businessmen seem li#e they ha"e a suici!e ish. They ant ,uic# profits% but they !o not reali1e that a ,uic# go"ernment crac#!o n is hat follo s. The o"erarching problem ith social programs in a true free mar#et system in conformity. 0o t o people in a !i"erse culture are ali#e% an! therefore no matter hat social programs you intro!uce or hat !ecisions you ma#e% there ill be someone at o!!s ith you% an! therefore true unanimity is impossible. If it as possible to ta#e true social responsibility to the e(treme% e oul! essentially ha"e collecti"ism ithout communist i!eals% hich is hat $rie!man proposes in Capitalism and Freedom.