In 1970, Nobel Laureate economist Milton Friedman famously
proclaimed in the New York Times Magazine, “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.” Many still swear by Friedman’s proclamation. However, the
tide has turned against the Friedman view of corporate purpose.
An overwhelming majority of companies polled in a recent global survey conducted by McKinsey to gauge support for corporate social responsibility disagrees with Friedman’s take on CSR.
More than four out of
five respondents agree that generating high returns for investors should be
accompanied by broader contributions to the public good by providing, for
example, good jobs, making philanthropic donations, and going beyond legal
requirements to minimize pollution and other negative effects of business.
We are seeing noting less than the social transformation
of capitalism on such a grand scale that Carl Marx might have become a
convert.
Reaching all the way back to 14th Century Sweden, when the
first known corporation was chartered, the primary purpose of state chartered
corporations was to serve public purposes. For 500 years, that's the way it
was. Then, in 1843, the British Parliment turned corporations into the
self-serving business models that Milton Friedman was so enamored of.
Now, there are clear signs indicating that business enterprises are subscribing in evere growing numbers to the premise that companies have a moral obligation to serve the
societies on which they depend for their well-being.
Read the article on the McKinsey study. (Registration required, but it's currently free.)
Posted by DBW
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