Social Responsibility and Economics

AND STABLE SOCIETY? IS IT RATIONAL?

In Capitalism and Freedom, Nobel Prize winning economist Milton Friedman addressed the issue of social responsibility as it relates to economics. He said that:

The view has been gaining widespread acceptance that corporate officials . . . have a 'social responsibility' that goes beyond the interest of their stockholders . . . This view shows a fundamental misconception of the character and nature of a free economy. In such an economy, there is one and only one social responsibility of businessto use its resources and to engage in activities designed to increase its profits so long as it stays within the rules of the game . . . Few trends could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible (Friedman, 1982, p. 133).

As his statement indicates, Friedman views the concept of social responsibility in the narrow confines of profit and loss. In the early1960s, concepts of economic and social justice, as well as concepts related to environmental protection, began a metamorphosis and expansion. One of the notions being incorporated into the expanded concepts was that all institutions and organizationsincluding business, which derived benefit from being a part of a society, and which separately or collectively affected the direct

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ocietal asset. Therefore, without destroying political freedom, society may impose environmental protection regulations, as an expression of societal will. Andrew Shotter (1985, pp. 15) identified individualism, property rights, rationality, selfishness, and economic competition as the key characteristics of the free market concept. The general theme of the concept is that whatever individuals want to do in an economy should not be interfered with by government, so long as the rights of others are not harmed in the process. Further, the concept holds that whatever people earn they have a right to keep (governments do not have the right to tax it away from them). The free market concept holds that economic welfare will be generated through the selfishness of the members of the economy. The concept also holds that economic injustice will be precluded by competition within the economy. Through such arguments as the "invisible hand," proponents of the freemarket concept contend that application of the concept will provide a distribution of economic benefits almost equal in equity to that which would be provided under "ideal" conditions (Shotter, 1985, pp. 1113). Further, the proponents claim that the greater economic eff
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Approximate Pages = 15 (250 words per page)