The True Social Responsibility Of Business

"There is one, and only one, social responsibility of business - to 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."

Milton Friedman (1912 - 2006)

Much is said of the "social responsibilities" that businesses should be cognizant of and pertain to.

But the ultimate goal of business is to make enough profit to stay alive!  And to return its excess profits to its ownership - stock and bond holders and/or the business owners.

The business is not in business to employ a certain number of this or that group.

The business is not in business to hire arbitrary percentages from this or that ethnicity or gender or age.

The business is not in business to pay whatever the "living wage" that local bureaucrats consider to be "fair."

The business is not in business to provide benefits packages that are imposed on it by whatever the group.

Instead, the business is in business to conduct business!

The ultimate aim of the butcher, the baker and the beer maker is to provide such a good dinner for its patrons that those patrons return again and again.  And this fabled trio of business providers represents Mr. Adam Smith's example of any business that provides goods or services to its community.  Sometimes that community is worldwide.

No matter the business:

The business of their business is to offer the best product they can.

The business of their business is to attract and encourage a loyal clientele.

The business of their business is to engage that clientele with product and service such that they come back.  And tell others!

The business of their business is self interest!

Should they be "socially responsible?"  If they want to!  It should be up to them.  They would and should decide what "social responsibilities" they will take on.  And in that chosen social responsibility they might be able to do great things!

Those great things might help them to offer a better product.

Those great things might help them to attract and encourage more loyal clientele.

Those great things might help them to provide a better product or service so more clientele comes back.  And tells others!

Those great things might help them as they act in their own self interest.
Those great things might help them to increase their profits!

BUT NOT IF THEY ARE FORCED!

They should be, to quote another Milton Friedman term, "free to choose."

Force, by local law or political will is arbitrary.  It represents coercion.  It is not motivated by economics.

Free enterprise is not arbitrary, or coercive, but it IS motivated by economics.

Free enterprise will keep the business in the narrow path of good behavior and social responsibility.

Free enterprise, the business's market and the market in general, will insure the business does operate outside the rules.

Free enterprise, not in an arbitrary or coercive way, will insure that the business "engages in open and free competition without deception or fraud."

FREE ENTERPRISE IS, AT THE SAME TIME, CONFINING AND ENCOURAGING!

And, unlike the arbitrary natures of gubment officials or local this or that, free enterprise is even keel.  The true social responsibility of business is to stay alive and prosper within the rules of the game!

And when freely allowed to do this, any other social responsibilities will follow.  By choice.