Which one of the following is NOT one of the arguments against social responsibility as used by economist Milton Friedman?
A) Spending money for social responsibility is spending the stockholder's money for a general social interest.
B) Businesses can actually do very little in terms of social responsibility.
C) Spending money on social responsibility is acting from motives other than economic and may, in the long-run, cause harm to the very society the firm is trying to help.
D) 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.
E) Through taking on the burden of social costs, the organization becomes less efficient, causing price increases or postponement of growth.

Milton Friedman is most famous for the defense of the Chicago School economics which is a neoclassical approach to macroeconomics. He favored free trade, smaller government and a slow but constant growth of the money supply. I personally disagree with neoclassical economists because they have the tendency to mess things up and time proves they are always wrong (that is a biased but positive statement). He was the father of monetarism, but if you look at his last two disciples, George Bush and George W. Bush, the outcome was not positive ⇒ 3 deep recessions in 3 presidential terms.

As a neoclassical economist, Friedman believed and argued in favor of the trickle down in economics. That means that if you allow the rich to get overwhelmingly rich, their riches will spill over to the rest of society. Not because they are good people that like to share their wealth, but because they need workers and employees to keep consuming goods and services in order to get the economy moving. Eventually the spilled over wealth should return to the top. So it is no wonder why he opposed corporate social responsibility, since wasting time and money in the community, employees or the environment was simply a waste of resources that could be used to increase stockholders' wealth.

I understand how theoretically this might work, but it takes the human factor out of the equation and expectations are extremely important in economics, that is why they always fail.

tutorareej tutorareej · Answer 2 · 2021-11-20T12:43:30+01:00

The argument given by Milton Friedman has not been related to the business done in terms of social responsibility. Thus statement B is correct.

Milton Friedman has been the neoclassical economist, who has been working with the favor to trickle down the economy. The neoclassical economists generally mess up things. It has been evident by the 3 consecutive recessions in the presidential terms of George Bush.

Milton Friedman argues on the money spent by the reach in social interest. They have been performing their tasks for their wealth. The continuous process results in harming the social economy of the country.

The argument given by Milton Friedman has not been related to the business done in terms of social responsibility. Thus statement B is correct.

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