Milton Friedman on “Social Responsibility”

A couple days ago I described how has come under attack from liberals at the Seattle Times and elsewhere for not spending corporate money on philanthropy. I ended the post by expressing the opinion that “There is no real moral justification for corporate executives giving away their stockholders’ money to third party.”

Today it is more or less conventional to talk about big corporations having a “social responsibility” to do all sorts of things, like philanthropy, that don’t put money in their stockholders’ pockets. Obviously many executives would argue that they are behaving in a perfectly moral way when they spend their stockholders’ money on charities and causes. Many boast about it in their advertisements and their annual reports.

To argue against such a well-entrenched (but wrong-headed) idea, I’d like to defer to someone far smarter than myself.
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Free States, Free Enterprise

“America; where people do not inquire concerning a stranger ‘who is he,’ but ‘what can he do?’” Benjamin Franklin

Last week’s post included quotes from several college history textbooks, all of which claim that America’s fantastic economic growth was achieved, during the nation’s first few decades, by the ruthless exploitation of slave labor. While it is certainly true that slaves were ruthlessly exploited in our nation’s early history; it is not at all true that the slaves, their white exploiters, or the lands they farmed were the real drivers of America’s economic growth.

From the time the nation was founded the real wealth creation happened almost exclusively in the Northern states, where slavery was never very common, and where it was made illegal early. The rapid growth in productivity and prosperity that made America the envy of the rest of the world was made possible by legal and cultural conditions unique to the Northern “free” states. The Southern states lagged behind (as did the rest of the world) because Southern culture was hostile to all the things that made the North thrive. It also happens to be true that many of the North’s leading entrepreneurs were passionate abolitionists.

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