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The Friedman Doctrine Hits Its “Golden” Anniversary: How Does it Look 50 Years Later?

            September 13, 2020 was the 50th anniversary of the Milton Friedman publishing his essay, “The Social Responsibility of Business is to Increase Its Profits,” in the New York Times Magazine.  This consequential essay would give birth to something known as the Friedman Doctrine, an economic idea that would serve as a significant driver for the business community in the 21st century.  However, in his article “Has Business Left Milton Friedman Behind?,” Andrew Ross Sorkin argues the current business environment may have moved beyond the Friedman Doctrine.

            Now, at the time Friedman wrote his essay, he was not some nobody, and, in fact, he was actually a bit of a celebrity.  He was a regular on many talk shows throughout his career, and he was even given a 10-part PBS series titled “Free to Choose,” based on his book of the same name.  However, before his PBS series, Friedman was frequent columnist, and his infamous New York Times Magazine article was published on September 13, 1970.  The timing of this article is of a particular significance, as it comes right at the end of the 1960s.  The 1960s, as many of us know, were highlighted by periods of social unrest, including, but not limited to, the Civil Rights Movement and the anti-Vietnam War Movements.  Friedman appears to be writing at a time when businesses and business leaders are being pressured to take a stance on social issues, and thus adopting a corporate social responsibility.  This movement/concept is something Friedman believes strongly against. 

https://static01.nyt.com/images/2008/04/13/weekinreview/goodman-600.jpg?quality=75&auto=webp&disable=upscale

            Friedman’s opening paragraph is a strongly worded opposition to the then-emerging concept of corporate social responsibility.  Friedman writes:

The businessmen believe that they are defending free enterprise when they declaim that business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends; that business has a ‘social conscious’ and takes serious its responsibilities for providing employment, ending discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers.  In fact they are – or would be if they or any one else took them seriously – preaching pure and unadulterated socialism.  Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades (Friedman, 1970).

https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html

Now, clearly Friedman has strong views on this new idea of corporate social responsibility, and he argues quite adamantly against it.  He even goes as far as to compare it to socialism, something that would’ve struck a chord with readers at the height of the Cold War in 1970.

            The Friedman Doctrine goes against nearly everything we have discussed in this class about corporate social responsibility.  Today, many corporations believe they have a strong responsibility to not only their shareholders but also their communities and the world as a whole.  Friedman also strongly believed that business should stay out of politics, and, as evidenced by the $3.47 billion spent in 2019 lobbying the federal government, Friedman’s advice has not been followed (https://www.statista.com/statistics/257337/total-lobbying-spending-in-the-us/#:~:text=In%202019%2C%20the%20total%20lobbying,to%203.47%20billion%20U.S.%20dollars). 

            It is easy to argue that much of business has left Milton Friedman and his Doctrine firmly in the past.  In 2004, former United Kingdom Prime Minister Tony Blair said, “The emphasis placed by more and more companies on corporate social responsibility, symbolises the recognition that prosperity is best achieve in an inclusive society” (https://www.theguardian.com/society/2004/mar/24/executivesalaries.policy).  While the Friedman Doctrine may be widely denounced, it does not mean it is something that can be totally ignored.

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