There is one and only one social responsibility of business - to use it 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, engages in open and free competition without deception or fraud.
Interpretation
Businesses should focus on maximizing profits while adhering to ethical practices.
Milton Friedman's quote emphasizes the primary responsibility of businesses to generate profits for their shareholders. He argues that this should be done ethically, within the confines of fair competition, and without engaging in deceptive practices, suggesting that the pursuit of profit is fundamental to a business's role in society.
In practice
This quote could be used in a business ethics seminar to discuss corporate responsibility.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
When a private enterprise fails, it is closed down; when a government enterprise fails, it is expanded. Isn't that exactly what's been happening with drugs?
The idea that business is strictly a numbers affair has always struck me as preposterous. For one thing, I've never been particularly good at numbers, but I think I've done a reasonable job with feelings. And I'm convinced that it is feelings - and feelings alone - that account for the success of the Virgin brand in all of its myriad forms.
No idea for a new growth business ever comes fully shaped. When it emerges, it's half-baked, and it then goes through a process of becoming fully shaped.
You go to any MBA program, and you will be taught the theory of the firm, that the purpose of the firm is the maximization of return on invested capital. I always thought this was a kind of lunacy.
Entrepreneurs say in an economic boom it's actually hard to build a company because everybody's too excited and there is too much money funding too many marginal companies.
Customers should be number 1, Employees number 2, and then only your Shareholders come at number 3.
I think that business practices would improve immeasurably if they were guided by "feminine" pinciples, qualities like love, care, and intuition.
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