There is one and only one social responsibility of business — to increase its profits.Milton Friedman
This is one of the more famous Milton Friedman quotes known as the Friedman doctrine. It has evolved to be ‘The sole responsibility of a corporation is to maximise profit for shareholders.’
Milton got it wrong.
It is one of the most destructive ideas around. We use this quote to focus on one sole measure – financial output. Profit could be about community contribution, could be about the long term, but it is not. Stakeholders could include the employees, the customers, the community, the planet, but it does not. And so, we make poor choices. We treat the planet as an ‘externality’ that is someone else’s problem. We glorify scale and the bottom line. Employees are expendable. Breaking the law, taking safety risks with employees or children who live next door is fine, in fact encouraged, as long as you can get a way with it.
Companies that take a different path are noticeable. They are often small businesses and care deeply about the community they are in. Not in a token, ‘social responsibility’ or pick up the trash day type of way. But everyday. You know can picture them. They are the ones donating to schools, community groups, giving discounts to the vulnerable rather than trying to take advantage of them. They are the ones saying ‘your tyres are good enough for another 6 months yet, so you don’t need the expense now.’ They are the ones signing their name in your jeans.
Milton’s economics may have helped create a vast amount of financial wealth, but it came at the expense of community and planet wealth. It destroyed us and our planet. Any statue or monument to him should be taken down.