The Friedman doctrine was right and wrong about the responsibility of business. For democratic capitalism to live up to its name, voters, not corporate interest, must set the rules of the game.
Fifty years ago to the day, Milton Friedman set forth the famous "Friedman doctrine". In biting prose, he rejected the idea that business has “responsibilities for providing employment, eliminating discrimination and avoiding pollution”, and argued that the “one and only social responsibility of business” is to maximise its profits.
The past decade has brought a Cambrian explosion in species of “socially responsible” capitalism: sustainable investing (environmental, social and governance), impact investing, inclusive capitalism, conscious capitalism and stakeholder capitalism, to name a few. What does the doctrine mean for this throng of would-be reformers?
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Alan Schwartz AO is a businessman, investor and philanthropist.
