# Milton Friedman and Maximizing Profits
**URL:** https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991
**Category:** Unbounded
**Tags:** economics
**Created:** [January 1, 2025, 7:28pm UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991 "2025-01-01T19:28:26Z")
**Posts on this page:** 20
**Page:** 2
### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 11, 2025, 2:05am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/21 "2025-01-11T02:05:36Z")
> [@LMD](#):
>
> > The discussions of the “social responsibilities of business” are notable for their analytical looseness and lack of rigor.
It’s also ironic to make that mistake whilst saying this.
---
### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 13, 2025, 5:04am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/22 "2025-01-13T05:04:51Z")
> [@Elliot](#):
>
> 1. Outline the article just in terms of key logical arguments. (Tree or indented bullet points.)
I got a bit stuck on this one, and stopped after 40mins. It was slow going and I wasn’t going to finish the article. I hadn’t done an article outline before, and I wasn’t sure how to proceed. I had some doubts about how to outline in terms of key logical arguments. I figured I’d make the parent nodes the conclusions, and the reasons their children. But that seemed to be breaking up the article too much, because some of the conclusions are later than the premises? I think maybe this is just a bit too hard of an article for me to try for my first time. I’d like to learn how to do this though.
Title: The Social Responsibility of Business Is to Increase Its Profits
- Businessmen are not defending private enterprise but advocating pure socialism when they declaim that business is not merely concerned with profit, but that it also has a social conscience and “social responsibilities”
- Q: What does it mean to say that business has responsibilities? A: Only Individual businessmen e.g executives, have responsibilities.
- Only people can have responsibilities
- A corporation has artificial responsibilities
- A corporation is an artificial person
- Business as a whole doesn’t have responsibilities
- The responsibility of businessmen _qua_ employee, is to conduct business in accordance with their employers’ desires (and the law etc) because he is their _agent_.
- Whether their employers’ desires is to make money, or run a charity, the businessman is their _agent_. He is hired to serve their purposes.
- A businessman _qua_ individual may adopt his own social responsibilities, but in this he acts as a _principal_, and not an agent. He acts for his own sake.
- What does it mean to say that the corporate executive _qua_ businessman has a “social responsibility”? It must mean that he is to act in some way that is not in the interest of his employers.
- E.g, don’t increase prices, spend on helping reduce pollution, or hire unemployed people, at the expense of the business’s interests.
* * *
here are some problems i wrote down while I was doing it:
I’m not really sure how to outline in terms of logic arguments. Should I have the conclusion as the root/parent nodes? That makes sense, because then you can have the reasons under it.
I have the question in there as a parent. Maybe I shouldn’t, and should just have the conclusion. Or I could combine the question and conclusion like:
- What does it mean to say that business has responsibilities? Only Individual businessmen e.g executives, have responsibilities.
I kinda like that. Then the reasons go under that. ok.
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 13, 2025, 5:16am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/23 "2025-01-13T05:16:14Z")
Do you know how to outline an essay that you’re going to write? Including an essay that is focused on logical arguments?
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 13, 2025, 5:26am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/24 "2025-01-13T05:26:33Z")
> [@Elliot](#):
>
> Do you know how to outline an essay that you’re going to write? Including an essay that is focused on logical arguments?
No not really
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 13, 2025, 5:07pm UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/25 "2025-01-13T17:07:14Z")
> A Friedman doctrine‐- The Social Responsibility of Business Is to Increase Its Profits
Setting aside the other text, just looking at these words only, do you agree or disagree with the claim in the title?
> That responsibility is to conduct the business in accordance with their [his employers’] desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.
Do you think Milton Friedman would consider Amazon, today, to be conforming to the basic rules of society?
> Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily—to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country’s armed forces. If we wish, we may refer to some of these responsibilities as “social responsibilities.” But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not of business.
What does this say a CEO should do regarding his conscience when he’s at work?
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 13, 2025, 5:11pm UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/26 "2025-01-13T17:11:02Z")
One of the main issues with this partial outline is going into too much detail.
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 13, 2025, 5:12pm UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/27 "2025-01-13T17:12:08Z")
ok maybe we should work on that soon
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 14, 2025, 1:55am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/28 "2025-01-14T01:55:35Z")
> [@Elliot](#):
>
> > A Friedman doctrine‐- The Social Responsibility of Business Is to Increase Its Profits
>
> Setting aside the other text, just looking at these words only, do you agree or disagree with the claim in the title?
Disagree, but it depends on what he means by social responsibility. To me, a social responsibility means a responsibility you have to others. An important responsibility you have to others is to avoid violating their individual rights. So I think _a_ social responsibility of business is to not violate the rights of people. When he calls it ‘_The_ Social Responsibility of Business’, Friedman implies that the _sole_ responsibility of business to others is to increase its profits, which means that he thinks businesses don’t have a responsibility to avoid violating peoples rights.
> [@Elliot](#):
>
> > That responsibility is to conduct the business in accordance with their [his employers’] desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.
>
> Do you think Milton Friedman would consider Amazon, today, to be conforming to the basic rules of society?
I don’t know I know enough about Amazon to answer this, but I expect like other big companies they are bad.
> [@Elliot](#):
>
> > Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily—to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country’s armed forces. If we wish, we may refer to some of these responsibilities as “social responsibilities.” But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not of business.
>
> What does this say a CEO should do regarding his conscience when he’s at work?
I hadn’t seen it before, but I think it says that businessman qua employee should foresake his conscience (and his other values)?
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 2:00am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/29 "2025-01-14T02:00:47Z")
> [@LMD](#):
>
> Disagree, but it depends on what he means by social responsibility. To me, a social responsibility means a responsibility you have to others. An important responsibility you have to others is to avoid violating their individual rights. So I think _a_ social responsibility of business is to not violate the rights of people. When he calls it ‘_The_ Social Responsibility of Business’, Friedman implies that the _sole_ responsibility of business to others is to increase its profits, which means that he thinks businesses don’t have a responsibility to avoid violating peoples rights.
Do you think, more or less, that businesses should maximize their profits?
---
### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 2:01am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/30 "2025-01-14T02:01:38Z")
> [@LMD](#):
>
> > [@Elliot](#):
> >
> > Do you think Milton Friedman would consider Amazon, today, to be conforming to the basic rules of society?
>
> I don’t know I know enough about Amazon to answer this, but I expect like other big companies they are bad.
I believe Amazon is quite bad. Lots of other people don’t.
But the question was about what Milton Friedman would think – how he meant his essay.
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 2:02am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/31 "2025-01-14T02:02:07Z")
> [@LMD](#):
>
> > [@Elliot](#):
> >
> > What does this say a CEO should do regarding his conscience when he’s at work?
>
> I hadn’t seen it before, but I think it says that businessman qua employee should foresake his conscience (and his other values)?
Yes. Do you think that’s reasonable?
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 14, 2025, 2:06am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/32 "2025-01-14T02:06:36Z")
> [@Elliot](#):
>
> Yes. Do you think that’s reasonable?
Not at all.
It’s strange that he’s suggesting an individual use their values and conscience to make decisions about where to work, but then suggest he forsake them once he is in that job. What’s the point in using your values to decide where to work if you’re just going to forsake them? Why stop being critical of your job in terms of your values as soon as you get the job? It doesn’t make sense.
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 14, 2025, 2:28am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/33 "2025-01-14T02:28:53Z")
> [@Elliot](#):
>
> > [@LMD](#):
> >
> > > [@Elliot](#):
> > >
> > > Do you think Milton Friedman would consider Amazon, today, to be conforming to the basic rules of society?
> >
> > I don’t know I know enough about Amazon to answer this, but I expect like other big companies they are bad.
>
> I believe Amazon is quite bad. Lots of other people don’t.
>
> But the question was about what Milton Friedman would think – how he meant his essay.
Okay I think I misunderstood the question.
Is the question asking for my estimation of how Milton Friedman thinks about big business in general, and whether he is perhaps biased toward them? And not to do with the facts of whether Amazon is bad or not?
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 14, 2025, 2:31am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/34 "2025-01-14T02:31:14Z")
> [@Elliot](#):
>
> Do you think, more or less, that businesses should maximize their profits?
Yes I think so, among other things.
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 2:36am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/35 "2025-01-14T02:36:20Z")
> [@LMD](#):
>
> Yes I think so, among other things.
What does the “among other things” mean here?
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 2:37am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/36 "2025-01-14T02:37:18Z")
He made claims about how businesses should behave.
The question is what actual facts of reality he would think are what he advocates and what he thinks are bad. You can use other examples.
When he says _conforming to the basic rules of society_, what does he have in mind? What is he saying to conform to? What is OK to him, and what isn’t?
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 14, 2025, 2:48am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/37 "2025-01-14T02:48:28Z")
> [@Elliot](#):
>
> > [@LMD](#):
> >
> > Yes I think so, among other things.
>
> What does the “among other things” mean here?
Like I think they should maximise profits and care about other things too like, making a great product/service, being a great place to work for employees.
I’m reminded of the discussion at the end of Goldratt’s _It’s Not Luck_ where they are discussing the goals of a business. Here is a excerpt:
> His expression shows that he doesn’t agree yet. No wonder, for a long time we thought that business and social values were almost contradictory. They were. Not anymore.
>
> To help him quickly digest it, I say, “Let me review what we have agreed on. We agreed that we should, ‘Make money now as well as in the future,’ ‘Provide a secure and satisfying environment for employees now as well as in the future,’ and ‘Provide satisfaction to the market now as well as in the future.’ The first one represents the traditional view of people who own companies. The second is the traditional view of the unions, the employees’ representatives. And the third expresses the message that all new management methods are zealously advocating. We, as top managers, must make sure that our companies provide all of them.”
>
> “Easy to say,” Granby sighs. “The problem is that so often there are conflicts between them.”
>
> “No, there aren’t,” I say. “There are modes of operations that apparently conflict with one of them. These same modes in the long run conflict with all of them.”
>
> “What you are telling us,” Jim is trying hard to digest, “is that we have to realize that there is no conflict between them. That they don’t contradict but in fact supplement each other.”
>
> “Precisely.”
>
> “Alex is probably right,” Brandon joins me. “As people who believe in making money as the goal we are also awakened to the fact that the other two entities are absolutely necessary conditions for achieving our goal.”
>
> “The same awakening is happening in the other camps,” I add. “Show me a union leader who believes that there is job security in a company that constantly loses money. Show me a quality zealot who thinks that a company can provide good service to the market while constantly losing money.”
---
### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 3:11am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/38 "2025-01-14T03:11:50Z")
> [@LMD](#):
>
> Like I think they should maximise profits and care about other things too like, making a great product/service, being a great place to work for employees.
I think you’re interpreting the word “maximize” loosely and I’m not. Can you look up the definition, think it over, and see if you can figure out what I mean.
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### Author:  [@LMD](https://discuss.criticalfallibilism.com/u/LMD)
#### Post date: [January 14, 2025, 3:24am UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/39 "2025-01-14T03:24:43Z")
> [@Elliot](#):
>
> > [@LMD](#):
> >
> > Like I think they should maximise profits and care about other things too like, making a great product/service, being a great place to work for employees.
>
> I think you’re interpreting the word “maximize” loosely and I’m not. Can you look up the definition, think it over, and see if you can figure out what I mean.
Sure how’s this:
Do you think, more or less, that businesses should _aim to make their profits as large as possible_?
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### Author:  [@Elliot](https://discuss.criticalfallibilism.com/u/Elliot)
#### Post date: [January 14, 2025, 4:25pm UTC](https://discuss.criticalfallibilism.com/t/milton-friedman-and-maximizing-profits/1991/40 "2025-01-14T16:25:31Z")
Can you compare how you’re using the word and how I’m using it and find any difference or issue?
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