National Review nonsense: Not (Necessarily) for Profit Alone

It was possible, back in 1970, to read an essay by an eminent libertarian economist in the The New York Times Magazine. Milton Friedman’s byline appeared under a headline that both grabbed attention and accurately distilled his argument: “The Social Responsibility of Business Is to Increase Its Profits.”

National Review nonsense: Not (Necessarily) for Profit Alone PortraitofMiltonFriedman

National Review nonsense: Not (Necessarily) for Profit Alone PortraitofMiltonFriedman

The CEO is an employee of shareholders, wrote Friedman, and his “responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society.” He should be charitable on his own time, and with his own money.

Friedman’s essay remains influential 50 years later, but its ideas have always been contested. In August 2019, the Business Roundtable, a group of nearly 200 chief executives of the country’s top businesses, released a “Statement on the Purpose of the Corporation.” From 1997 onward, previous versions of the statement had endorsed the idea that corporations exist primarily to serve shareholders. The new statement omitted such language and instead affirmed a “commitment to all of our stakeholders” (emphasis in original): customers, employees, suppliers, “the communities in which we work,” and shareholders, all listed in that order.

The new statement has been drawing criticism ever since, from opposite directions. Some prominent conservatives and libertarians have criticized the Roundtable for abandoning Friedman’s wisdom and thereby aiding socialism and corporatism, and also for undermining managers’ accountability to shareholders. The Wall Street Journal has lashed the statement repeatedly, in one case running excerpts from Friedman’s essay as a rebuke. Contributors to National Review’s new “Capital Matters” project have taken the same view. Nikki Haley, widely considered a contender for the Republican presidential nomination in 2024, said that the Roundtable had turned its back on capitalism.

https://www.nationalreview.com/magazine/2020/09/07/not-necessarily-for-profit-alone/

Apologists for altruism! Should have listened to Gordon too...

National Review nonsense: Not (Necessarily) for Profit Alone

National Review nonsense: Not (Necessarily) for Profit Alone

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