Milton Friedman's The Social Responsibility Of Business Is To Increase Profit?

We have been brought up with the misconception that the primary purpose of corporations is to increase profit for their shareholders even in cases of eleemosynary organizations. Milton Friedman in his 1970 article The Social Responsibility of Business is to Increase Profit, illustrates that the central responsibility of a business is “to use its resources and engage in activities designed to increase its profits” (pg 6). His reason being those corporate executives and managers are agents who are morally and legally obligated to act in the best interest of their principle. Friedman’s’ neoliberal economics, is being contested by stakeholders theory which takes socially responsible into consideration. Dana Brakman Reiser in the article The Next big Idea: Flexible Purpose Corporations introduces the idea that social enterprises have multiple objectives, which are to earn profits for owners and promote social good. …show more content…
Corporate executives, on the other hand, are lawfully prohibited from engaging in social responsibility with shareholders money. He states that the structure of corporations inherently deprives the entity of social responsibility or duty to anyone besides their shareholders. Brakman Reiser business theory is almost synonyms with stakeholder’s theory and Green Business. Reiser encourages the concept of organizations having the ability to legally and effectively incorporate ethics, and moral values when conducting business or allocating goods and services. In the Next Big idea: Flex Purpose Corporations, Reiser provides FPC, B-Corps, and L3L as alternatives to the traditional corporation. While also explaining exactly how each would function to promote social