Milton Friedman has been called the most influential economist from the second half of the 20th century. With his passing this month a great deal has been written regarding what he did and did not achieve. While Dr. Friedman helped transform the economic world, he also believed that economic freedom was key to creating long-term economic growth, eradicating poverty, and preserving our broader freedoms. This struggle to transform greater society still has a long way to go. The slippery slope toward socialism continues to threaten our freedom, but it does so in a less obvious manner. The vibrancy of the modern Corporate Social Responsibility (CSR) movement stands as a testament to this continued threat.
In response to the rise of CSR principles more than 30 years ago, Milton Friedman wrote that in a free society, “there is one and only one social responsibility of a business – to use its resources and engage in activities designed to increase its profits, as long as it stays with the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
The modern CSR movement is the next wave of political correctness that ignores the basic free market principles articulated by Friedman. So-called “corporate social responsibility” is the notion is that businesses have much broader responsibilities than simply selling products that people want to buy and generating profits for its investors. According to the CSR view, businesses are as, if not more, responsible to “stakeholders” – that is, virtually anyone affected by a company’s products or means of production.
It is also quickly becoming accepted dogma. According to a recent Forbes article (11-28-06), “’In order to make a profit in this day and age, companies are not going to exist if they don't have corporate responsibility," says Alan Hassenfeld, the chairman of Hasbro. ‘You have to do the right thing," he says, claiming it helps to recruit and retain employees as well as keep customers.’”
CSR’s proponents paint themselves as the “moral entrepreneurs” who are “doing good” while doing well. The reality is different. When carefully examined, it becomes clear that CSR is immoral, and the firms that engage in CSR will ultimately cause more harm than good.