Abstract

(Unpublished writing, 2007) This article briefly introduces a new argument concerning corporate social responsibility, based in an analysis of values expressed by the recent and contemporary liberal economists Milton Friedman and Michael Jensen. I will provide the gist of the argument by considering implications of Friedman’s very familiar view, that “…there is one and only one social responsibility of business - to use its resources and engage in activities to increase its profits so long as it stays within the rules of the game.” Harvard professor Michael Jensen has argued from slightly different premises to a similar conclusion, that “social welfare is maximized when all firms in an economy attempt to maximize their own total firm value.” Vestiges of such influential argument are also easily spotted in American corporate culture (See Palmer, 2007). I suggest that these authors’ positions allow for possibilities that undermine their broader fundamental values, however. I will concentate especially on Friedman’s classic treatment of liberal politics and capitalist economics, Capitalism and Freedom, in which he alludes to the importance of accepting and promoting individual freedom. Such values demand governmental and social stability, and so, in some cases, particularly where business activity may destabilize society, it would appear that freedom may be seriously threatened by corporate activity that follows Friedman’s narrow prescription. Nowhere is this more evident, at present, than in the Niger River Delta, where the promise and profits of oil have produced a society in great disarray. A case study of the delta situation indicates the problems of the narrow view of business goals and business responsibility, and this article will go on to consider possible solutions to those problems that delineate general sorts of responsibilities. The solutions require corporations to take a much broader view of their activity: I suggest that Friedman’s flaw reflects a general weakness of liberal individualism, nicely exposed in Amartya Sen’s arguments that lead to the conclusion that, “we have to see individual freedom as a social commitment.” That social commitment includes the goal of promoting individual freedom, but reaching for the goal may proceed along lines that are not so narrowly economic as Friedman would have, indicating new roles for business and government cooperation even in less extreme cases than that of the Niger Delta.