PP247 Chapter 5: Unit 5 Notes
Document Summary
Unit moves from the question of justice and the merits of capitalism, to the most fundamental issue of business ethics. Milton friedman (1912-2006) is a nobel prize winning economist and defender of free markets. His article on the social responsibility of business is often anthologized and many business ethicists have sought to refute it. Friedman is the classic defender of the stockholder theory - the view that managers only have an ethical responsibility to the owners of the company. A manager is responsible to the owners of the business. Milton friedman (cid:498)the social responsibility of business is to increase its profits(cid:499) As friedman puts it, managers should (cid:498)make as much money as possible(cid:499) for their companies while (cid:498)conforming to the basic rules of society(cid:499) (cid:523)the law and. Friedman dismisses the idea that managers should try to fight inflation, companies, that is the stockholder. ethical custom). protect the environment or help the unemployed (unless doing so is profit- maximizing).
