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Terms | Definitions |
|---|---|
 who wrote "The Social Responsibility of Business is to Increase its Profits" (1970)? | Milton Friedman |
| who lived 1912 - 2006 | Milton Friedman |
| _________________ American economist who taught at the ________________. The theories of the so-called __________________________derive from his views. | Noble Prize winning; University of Chicago; 'Chicago school of economics' |
| Challenged __________________theories that were prominent at the time. | Keynesian economic |
| The views he expresses in the reading on social responsibility and business were developed at length in _____________________. | Capitalism and Freedom (1962). |
| The notion of __________________________ involves a concern for "promoting desirable "social" ends" over and above a concern for profit maximizing and staying within the law. | "social responsibilities of business in a free-enterprise system" |
| Friedman claims that extolling (praising) the social responsibilities of businesses amounts to "preaching pure and unadulterated _________". | socialism |
| Such people, along with socialists, must think "that __________________, not ____________________, are the appropriate way to determine the allocation of scare resources" in a society. | political mechanisms; market mechanisms |
| Since "only people have responsibilities", Friedman focuses on individual ___________________________. Executives are employees of owners or shareholders so have a direct responsibility to them to "make as much money as possible while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom". Beyond that, in their capacity as executives, they have ____________________________________. | proprietors and corporate executives; no further obligations |
| So, for an executive to promote social responsibilities like "preventing inflation", "improving the environment", or "reducing poverty", s/he must "act in some way that is ________________ of his employers", stockholders, employees, or customers. | not in the interest |
| In a constitutional democracy there is a separation of powers and a system of checks and balances, but an executive who considers social responsibilities when making decisions on behalf of the company s/he works for acts "simultaneously [as] _____________________________", by both imposing taxes and deciding how to spend the tax revenue. | legislator, executive, and jurist |
| An irony: "_______________ - at least in the U.S. - have objected to Government interference with the market far more consistently and courageously than have business leaders." | union leaders |
| The negative consequences, i.e. costs to owners (directly) and customers and employees (indirectly), of conducting business with too much concern for social responsibility would likely to lead to an ____________________. In contrast, the consequences of "private competitive enterprise" (in a free market) are ____________ because "it forces people to be responsible for their own actions and makes it difficult for them to "exploit" other people for either selfish or unselfish purposes." | executive being fired; positive |
| Objection: Sure it may be _________________responsibility "to impose taxes and determine expenditures for" social purposes, but the problems are too urgent to wait for ___________________ to do anything about it. | the government's; the government |
| Rejoinder: this argument "is an assertion that those who____________the taxes and expenditures in question have _______________to persuade a majority of their fellow citizens to be of like mind and that they are seeking to attain by __________________ procedures what they cannot attain by ____________________ procedures." | favor; failed; undemocratic; democratic |
| Things are somewhat different for the ________________, who should be free to spend as s/he likes. Doing so, however, "may impose costs on employees and customers." | individual proprietor |
| For executive and proprietors alike, there is a strong temptation to _____________decisions calculated to be in the company's _______________interest as exercises of social responsibility. | rationalize; long run financial |
| To this, Friedman says that he "cannot summon much indignation to denounce" those who cloak the _____________ behind their actions and decisions, while at the same time ______________ those "who disdain such tactics as approaching fraud." | self-interest; admiring |
| Different political principles underlie ___________________&________________. | market mechanisms and political mechanisms |
| For market mechanisms it is? | unanimity; |
| for political mechanisms it is? | conformity |
| Of course, in the real world, "_________ is not always feasible" and in "some respects ______________ appears unavoidable". | unanimity; conformity |
| The doctrine of social responsibility is a "collectivist" and "fundamentally subversive" doctrine. It differs only [from _____________] by professing to believe that collectivist ________ can be attained without collectivist __________." | socialism; ends; means |
| Friedman concludes: "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say... | it engages in open and free competition without deception and fraud." |
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