Milton Friedman’s Theory of Profits          2
MILTON FRIEDMAN’S THEORY OF PROFITS
Table of Contents
Responsibilities of Business    3
Profit as the Highest Responsibility of the Business    4
Friedman’s Theory & Corporate Social Responsibility    4
Controversies of Friedman’s Theory    5
The Consequentialist Arguments    7
Arguments Against the Friedman’s Theory    8
References    10
Responsibilities of Business
Milton Friedman's theory had put a prominent emphasis that the business is only responsible to increase profit. This particular theory is even polarizing the business theory of recent times. Some experts and economies point out that Friedman's theory was provocative and it augured the latest phase of American economic structure where profits are the only real objective of the business and Greed is God. This particular theory was considered to be an anthem of capitalism and many show it as a capitalist prospect that pointed out the role of the business leaders in the free market system. However, there are two sides that can be probably an arguable context that has become a debatable aspect over the last 50 years, and businesses have become much more dynamic and complicated in order to balance the different priorities (Cheffins, 2020). Moreover, the increase in the context of the social responsibility approach in modern business and investment has focused on the priorities of the corporate leaders where the investors also believe in the
oader dimension of social aims for the business.
Accordingly, it was found that businesses had social responsibilities and this theory contextualized that business leaders can try to help ameliorate social illness by providing employment to the long-term unemployed, fighting discrimination, avoiding pollution, and generating profits for the shareholders. Friedman complained that businesses cannot be successful with this type of theory. He rather claimed in his theory that a business perspective that focuses on the well-being of the individuals and the society are some exponential aspects of the political forces that reduces the basic aspect of the free market in the past decades. An influential publication in 1970 pointed out that the social responsibility of business is to increase profits which transformed the entire scenario of business theory in the US.
Profit as the Highest Responsibility of the Business
Friedman's theory achieved the universal acceptance that focused on the prime purpose of the business is to maximize profits and shareholder value above all other goals. Accordingly, by this theory, corporate executives became the employees and the shareholders of the company became the boss. It is the confirming nature of the theory that placed importance on the fact that making as much money as possible is the basic rule of business. Executives who are concerned about the social concerns above making profits are not utilizing the resources for an optimum business purpose and they are not performing their jobs as the employees (Clarke, 2020). It is obvious that the analysis of the fragments had consequently focused on the fact that an individual can do anything with his money and it is the employee who has to abide and hew to the desires of the superiors. Friedman's theory emphasized the fact that the business leaders must work to return the investment done by the shareholders to the shareholders. Business leaders who direct their profits and spend that amount on social aims have effectively turned themselves as legislators and not the businessman.
Friedman’s Theory & Corporate Social Responsibility
Friedman had always argued for capitalism and was against any such activity that distorted the economic freedom of the society. Activities that address social responsibility were conducted by a corporation that destructs the economic freedom because the shareholders are not able to decide how they are money is being spent. At this point, Friedman argues that corporations must focus on those activities that are related to the company's profits and exclude charitable activities that do not directly generate any sort of revenue. Another principle expressed by Milton Friedman focused on the principle that the companies can effectively focus to maximize their profits to avoid the law and follow ethical customs. He contemplates to deny the charitable actions of the business that does not contribute to the profit and according to the theory of Friedman, a good business does not undertake any...