Monday, May 5, 2014

Corporate Social Responsibility Is A Form Of Socialism

Most CEO's today accept the idea that the mission, and the only mission of the corporation, is to increase shareholder value.  Their compensation has also been arranged to satisfy that mission.  Most of their compensation is in the form stock options.  The origin of this idea is contained in a 1970 WSJ op-ed written by Milton Friedman.  Friedman, scolded CEO's for arguing that corporations have a broader responsibility to society.  He argued that the CEO's were enabling and abetting the anti-capitalist sentiments of the culture in 1970.  Accepting the mission of social responsibility, according to Friedman, was an implicit acceptance of socialist doctrines.

Friedman was successful in launching the idea that corporations only exist to grow profits and increase shareholder value.  His 1970 op-ed in the WSJ was also the beginning of a successful effort to transform the culture.  Friedman laid the groundwork for equating free market capitalism with personal liberty and democracy.  Corporations that engage in activities such as pollution control, or support for environmental goals, are engaged in socialism.  The only purpose of the corporation is to increase shareholder value.  Government interference that prevents corporations from satisfying their mission should be strongly resisted.  It should be regarded as an attack against liberty and free market capitalism. 

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