The Debate is Over …. Friedman Lost
I was having a conversation with a friend the other day on the topic of CSR. I was on the pro-CSR side (of course); he had the anti-CSR position. Predictably, as the conversation got spirited, he invoked the name Milton Friedman and his famous 1970 article in The New York Times Magazine, “The Social Responsibility of Business is to Increase its Profits.” It was predictable because there is hardly a debate on CSR that does not at some point find its way around to Friedman’s position on the topic.
In case you’re not familiar with Friedman’s article, his closing sentence provides a great summary:
“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.”
I admit to some dramatic license in my headline. Friedman didn’t necessarily lose the debate, but the “game” he referenced is very different today. From changing consumer expectations of businesses to the corporate accounting scandals that took place from 2001 through 2003 to the environmental issues we face today, a lot has changed in the 37 years since Friedman penned his article. Today, companies are learning they can increase profits as a result of their CSR efforts, not despite them.
Not one for long philosophical debates, I put it to my friend this way: You can oppose the expanding role of social responsibility in business; however, you can’t deny it and companies ignore it at their own peril.
Jeff
3 comments November 17, 2007
Lawson Software Vice President Jeff Frank discusses his views on CSR, compliance and sustainability related issues.
