1. What criticisms does Friedman raise against business managers who engage in "socially responsible" practices? Explain.
Friedman criticizes business managers who engage in socially responsible behavior by using the argument that there is a different set of criteria for social responsible behavior of a person, who happens to be a corporate executive (businessman) versus that same person acting as an individual in a free-society. A business manager’s main responsibility is to maximize the profit of the corporation. When that person combines those roles and directs a corporation to take on a social responsible cause, because it would either increase cost or decrease revenue, it would be equivalent to a tax on the customers, shareholders and employees without their consent and in some cases, knowledge.
Friedman further argues that a business manager who engages in socially responsible activities is in effect acting as a socialistic governmental agent in that a socialist government acts in the interest of the people it is set up to govern, while not fostering a free market or cultivating capitalism. A corporate executive would count on capitalism to ensure profits are maximized.
In short, a business manager cannot successfully have a split focus on the goals of the corporation. If he is going to maximize profits, he cannot actively partake in socially responsible activities.
Friedman says the political principle that underlies the market mechanism is unanimity (agreement) and the principle that underlies the political mechanism is conformity. Explain.
The political principal that underlies the market mechanism of unanimity is in a sense opposite to the principle that underlies the political mechanism. Unanimity calls for voluntary cooperation that does not require social values beyond what the group agrees upon. In conformity, people may disagree, but must still cooperate with the decision.
As it would be impossible to get all of...
Please join StudyMode to read the full document