Businesses: Collections Of People

Economist Milton Friedman asininely said, in his article The Social Responsibility of Business is to Increase its Profits, that businesses do not have responsibilities (beyond making profit) because they are not people and only people have moral responsibilities.  This comes early in the article, after Friedman says that the claim that businesses should pursue more than just profit is plagued by "analytical looseness."  My bullshit detector is activating!  This is nonsense, of course, since a business is just a collection of people working together.

Yes, the thing that makes a business distinct from a social club or charity is that its members aim to actually make a profit--they seek to obtain enough revenue from providing goods or services to exceed the expenses of running the business, having surplus money for themselves at the end of their labors.  The goal of making profit is definitely a major objective of business.  Without at least generating enough revenue to cover expenses, a business cannot survive.  But this fact does not mean that businesspersons are somehow exempt from any existing moral obligations that people have, since they are indeed still people.

A business is comprised of its members, who are individual persons with moral responsibilities.  And ethical behaviors do not logically exclude profit itself, although some unethical practices might certainly lead to greater amounts of profit, at least in the short run.  In the long run, though, exposed scandals can certainly damage a company's reputation to the point where it does lose vast amounts of profit and public support.  Now, this goes beyond my criticism of Friedman's claim about the nature of businesses and moral responsibilities, yet it is still certainly relevant to a rational discussion about business ethics.  Profits can still be made, even significant profits, when a company remains morally consistent and in the right.  And morally wrong behaviors are never made amoral or morally good if profits result from them.

Milton Friedman argues from an untrue premise.  Businesses are not individuals, but they are collections of people, and, as Friedman himself admits, people have responsibilities beyond simply making profit.  As someone who understands the nature of a moral obligation knows, geography and societal status do not nullify moral obligations, and so businesses still have them, whether the members acknowledge this or not.