According to Milton Friedman,which of the following is a problem with corporate social responsibility?
A)Social responsibility comes with a high cost that is borne by company shareholders.
B)The time,money,and attention diverted to social causes undermine market efficiency.
C)Companies publicize socially responsible actions while they quietly pollute and mistreat the environment.
D)The marketplace will ultimately determine the importance of social causes.

Question

According to Milton Friedman,which of the following is a problem with corporate social responsibility?
A)Social responsibility comes with a high cost that is borne by company shareholders. 
B)The time,money,and attention diverted to social causes undermine market efficiency. 
C)Companies publicize socially responsible actions while they quietly pollute and mistreat the environment. 
D)The marketplace will ultimately determine the importance of social causes.

Quizplus · Accepted Answer

In his book "Capitalism and Freedom," Milton Friedman argues that the primary social responsibility of corporations is to increase their profits within the rules of the game, i.e., abide by the law and engage in free and open competition. He believes that diverting a firm's time, money, and attention towards social causes, especially those that do not directly serve its profits, undermines market efficiency and dilutes the fiduciary responsibility towards shareholders. Therefore, Option B presents the problem of corporate social responsibility according to Milton Friedman's viewpoint.

According to Milton Friedman,which of the Following Is a Problem