According to Milton Friedman, it is to increase its profits.
Except you left out the rest of what he said:
That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.
The ethical responsibility of college professor is to represent people's ideas correctly. Has anyone ever met a college professor with ethics? Has anyone met a college professor say, "hey, take it easy on the taxpayer, we don't need this much money and benefits for the small measure we contribute to society." How about less profit for the professors and more benefits to the students and society.
Limited Perspective, Has anyone met a college professor say, "hey, take it easy on the taxpayer, we don't need this much money and benefits for the small measure we contribute to society."
Are you under the impression that professors at public institutions earn extremely large salaries? After a three of decades of long work-weeks, if you're lucky, you'll make about what a decent system administrator makes after 5 years of experience.
The salary for professors for the California State system are accessable on-line. It doesn't give the total cost for retirement, health care, and other benefits. It also doesn't indicate total cost for each work day.
Does Victor think this is comparable to the profits of the guy (just he and his wife) who fixes my heating and air unit? The guy has 30 years experience and I trust him more, with several personal exceptions, than government employees.
I hope this is not the bullshit they are teaching in college. If they are, I hope their are a few students willing to come right back at them.
Here's what an ethical processor (as ethical as the guy who fixes my heating unit) would do:
In column one add up total cost to the university for pay and benefits for a professor. Divide that by full work days and showing math show the students. In column two put the total cost to the A/C technician (paying his own gas, social security, retirement, health care...) then divide that by full days of work.
Then ask, which one is greedy and also which one is more valuable.
Friedman's point is that corporations are normally formed by a group of people that agree to a common goal or purpose for the enterprise. Some may be personally charitable and some may be personally greedy, but that is irrelevant to the goal of the enterprise which is most often to fill a societal need and generate a profit.
If the profits are used unwisely, then the business will fail. If it goes well, then the stakeholders make money and can do as they see fit. If they hire someone with expertise to run the company, then they expect him to focus on that while on duty. If he decides by himself that, gee, the company I work for has a lot of money, so I'm going to start writing checks from the company's bank account to charity, then he is committing a crime, not doing something virtuous.
So who should decide how a business is to be run as long as it is legal and according to ethical custom? If it's the government rather than the business owner, then it seems the owner has no liberty and therefore, is not really the owner at all. Who gave that power to the government in the first place?
The history of the world has been one of despots and dictators but the rise of Christendom changed the script and brought us the concept of liberty and the government serving the people.
"Two centuries later this political theory had gained both in definiteness and in force among the Guelphs, who were the Church party, and among the Ghibellines, or Imperialists. Here are the sentiments of the most celebrated of all the Guelphic writers: “A king who is unfaithful to his duty forfeits his claim to obedience. It is not rebellion to depose him, for he is himself a rebel whom the nation has a right to put down. But it is better to abridge his power, that he may be unable to abuse it. For this purpose, the whole nation ought to have a share in governing itself; the Constitution ought to combine a limited and elective monarchy, with an aristocracy of merit, and such an admixture of democracy as shall admit all classes to office, by popular election. No government has a right to levy taxes beyond the limit determined by the people. All political authority is derived from popular suffrage, and all laws must be made by the people or their representatives. There is no security for us as long as we depend on the will of another man.” This language, which contains the earliest exposition of the Whig theory of the revolution, is taken from the works of St. Thomas Aquinas, of whom Lord Bacon says that he had the largest heart of the school divines. And it is worth while to observe that he wrote at the very moment when Simon de Montfort summoned the Commons; and that the politics of the Neapolitan friar are centuries in advance of the English statesman’s."
Suppose your A/C technician needed half of money up front to replace your furnace. Then when it was time to do the installation, told you he needed that amount again because he'd used the money you gave him to buy a furnace for the local soup kitchen.
OK, let's apply Friedman's thesis to some specific examples. American companies have had to deal with American labor unions and American labor laws, and have decided that they can make a better profit by opening up factories overseas, where the workforce is likely to be more desperate and willing to work in sweatshops under unsafe working conditions, employing child labor in a way that keeps the children from getting educated (thus perpetuating the cycle of poverty), and where they can be paid wages that are well below what even in those countries would be a livable wage. Charles Dickens' novels are all about capitalists who exploited the poor and mistreated their workers. But people working in these factories live lives that would make them envious of Bob Cratchit.
So, is Scrooge, or his successors who are the executives of companies like Nike, right in asking if the prisons and workhouses are in order? Do they have a duty to make sure that their products are produced in a manner that is respectful of human rights? It seems to me as if Ebenezer Scrooge is being a good Friedmanite if he thinks of his company's profits as opposed to the rights of his employee.
But people working in these factories live lives that would make them envious of Bob Cratchit.
Good point. We should levy tariffs on products coming from outside the US. That would have the double effect of saving those people miserable lives working in a sweatshop and would provide more jobs to American workers. Win-win.
Boy that would have been an anathema idea to conservatives prior to Donald Trump. As one conservative commentator once put it, a tariff is a tax. So, if you impose a tariff you are raising taxes. But I do think the tax rewards actually favor outsourcing work to foreign countries, and that should be reversed. A lot of people thought Trump was going to do something about this, but he never did.
And Trump did do something about the tax situation by raising tariffs, most obviously with China.
And why do you think he killed NAFTA and re-negotiated trade with Mexico and China. Germany also taxes American car imports to high heaven and he mentioned the imposition of a 25% import duty on German cars.
If Victor despises woke corporations as much as I do, I consider that progress.
When I think of business ethics, I think of my own and the people I do business with. But, I am no Nike and I prefer to pay a little more to spend my money where they know my name. I know I can save by buying my home repair stuff at Home Depot, but Mike is the guy owns the hardware store down the street, Ching is the lady at the Chinese restaurant where me and Mrs. Perspective eat about twice a month, Joseph is the guy I buy most of groceries from, Bill is the guy who fixes my car (now that I stopped doing my own repairs), Phil is the guy who fixes my A/C, Jim, a true master, is who I call when I can't figure out how to do some carpentry, my son-in-law Keith is my plumber, and then there is one of my favorites, Karla. After her husband died in an auto accident 27 years ago and found herself a single mother, she opened the second Mexican restaurant in town (now there are four, not counting Taco Bell). She is getting ready to retire.
I avoid Nike, Amazon, Google, and all the other woke Democratic party shills as much as possible. However, I do have a weakness for the $1.00 McDonald's coffee (now $1.50 under Biden) and get my gas from Chevron and so on. I'm amazed that gas companies can go five miles off shore, drill down several thousand feet, pull up a few pounds of sludge, transform that into fuel, transport it half way across the country and sell it for $2.00 a gallon (before Biden and before local gas station mark-up and insane California taxes) which will propel me in my (woke company) Ford hybrid about 40 miles down the road at 65 miles per hour. Capitalism and business is good!
One problem with blindly banning exports from countries that have sweatshops is the impact to those workers. For instance, those workers choose to work under those conditions because the alternatives are worse....scavenging in dumps or prostitution...so simply closing those shops removes the option for a better, stable income.
"So the potential for growth is explosive. But first, countries have to get their institutions right, things that protect private property, the rule of law, give economic freedom. These things can attract the capital and the technology to the country to make the growth explosive. It’s still a process. Sweatshops won’t disappear overnight. But that process can go much quicker now than it has in the past. But it depends crucially on institutions that promote economic freedom."
"Oh hey, someone came up with a good "conservative" critique of A Christmas Carol."
Victor thinks a progressive pretending to be a conservative supporting an awful fictional character is somehow worth passing on? Good grief, if I pretend to be a progressive supporting Saruman, would that be anything but idiotic?
Okay, I'll try. See Saruman is a bad guy. Progressives are bad guys. Progressives are like Saruman and support Saruman because he does bad things and is mean to people. Tolkien was a great writer, he wrote about how bad progressives are by characterizing them as evil wizards. The end.
It's because socialists have always believed that ordinary people, left to their own devices, are evil and will destroy society rather than be benevolent, charitable and kind. So it is up to them, those of extraordinary virtue (and "liberal" arts training), to force the evil populace to do "virtuous" things like paying for everyone's abortions, wrecking the economy, allowing biological males into little girl's restrooms and keeping their mouths shut if you think any of that is wrong.
Saruman wanted to make people happy. Happiness is found in a central power. When everyone has guidance from the central power they are happy. Saruman only wants to make people happy. We are happy when there's no more racism, bigotry, homophobia, xenophobia, only allegiance to Sauron will make this dream come true. The end.
I'm glad my local business guys and gals are making a profit. I'm guessing Mike at my local hardware store is making about 30% GTM (gross trading margin) while Home Depot is at about 15% GTM, and HD buys in bulk.
The author is an ignorant fool at best, maliciously deceitful at worst.
On the contrary, the author is one of the "extraordinarily virtuous" ™! You would see that if you weren't a knuckle dragger prone to evil. The object is to signal that extraordinary virtue.
bmiller, It's because socialists have always believed that ordinary people, left to their own devices, are evil and will destroy society rather than be benevolent, charitable and kind.
As opposed to conservatives, which have abandoned the notion that we are all born into a sinful state?
According to Milton Friedman, it is to increase its profits.
ReplyDeleteExcept you left out the rest of what he said:
That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.
The ethical responsibility of college professor is to represent people's ideas correctly. Has anyone ever met a college professor with ethics? Has anyone met a college professor say, "hey, take it easy on the taxpayer, we don't need this much money and benefits for the small measure we contribute to society." How about less profit for the professors and more benefits to the students and society.
ReplyDeleteLimited Perspective,
ReplyDeleteHas anyone met a college professor say, "hey, take it easy on the taxpayer, we don't need this much money and benefits for the small measure we contribute to society."
Are you under the impression that professors at public institutions earn extremely large salaries? After a three of decades of long work-weeks, if you're lucky, you'll make about what a decent system administrator makes after 5 years of experience.
The salary for professors for the California State system are accessable on-line. It doesn't give the total cost for retirement, health care, and other benefits. It also doesn't indicate total cost for each work day.
ReplyDeleteDoes Victor think this is comparable to the profits of the guy (just he and his wife) who fixes my heating and air unit? The guy has 30 years experience and I trust him more, with several personal exceptions, than government employees.
I hope this is not the bullshit they are teaching in college. If they are, I hope their are a few students willing to come right back at them.
Here's what an ethical processor (as ethical as the guy who fixes my heating unit) would do:
ReplyDeleteIn column one add up total cost to the university for pay and benefits for a professor. Divide that by full work days and showing math show the students. In column two put the total cost to the A/C technician (paying his own gas, social security, retirement, health care...) then divide that by full days of work.
Then ask, which one is greedy and also which one is more valuable.
Friedman's point is that corporations are normally formed by a group of people that agree to a common goal or purpose for the enterprise. Some may be personally charitable and some may be personally greedy, but that is irrelevant to the goal of the enterprise which is most often to fill a societal need and generate a profit.
ReplyDeleteIf the profits are used unwisely, then the business will fail. If it goes well, then the stakeholders make money and can do as they see fit. If they hire someone with expertise to run the company, then they expect him to focus on that while on duty. If he decides by himself that, gee, the company I work for has a lot of money, so I'm going to start writing checks from the company's bank account to charity, then he is committing a crime, not doing something virtuous.
So who should decide how a business is to be run as long as it is legal and according to ethical custom? If it's the government rather than the business owner, then it seems the owner has no liberty and therefore, is not really the owner at all. Who gave that power to the government in the first place?
ReplyDeleteThe history of the world has been one of despots and dictators but the rise of Christendom changed the script and brought us the concept of liberty and the government serving the people.
From Lord Acton's The History of Freedom and other Essays
"Two centuries later this political theory had gained both in definiteness and in force among the Guelphs, who were the Church party, and among the Ghibellines, or Imperialists. Here are the sentiments of the most celebrated of all the Guelphic writers: “A king who is unfaithful to his duty forfeits his claim to obedience. It is not rebellion to depose him, for he is himself a rebel whom the nation has a right to put down. But it is better to abridge his power, that he may be unable to abuse it. For this purpose, the whole nation ought to have a share in governing itself; the Constitution ought to combine a limited and elective monarchy, with an aristocracy of merit, and such an admixture of democracy as shall admit all classes to office, by popular election. No government has a right to levy taxes beyond the limit determined by the people. All political authority is derived from popular suffrage, and all laws must be made by the people or their representatives. There is no security for us as long as we depend on the will of another man.” This language, which contains the earliest exposition of the Whig theory of the revolution, is taken from the works of St. Thomas Aquinas, of whom Lord Bacon says that he had the largest heart of the school divines. And it is worth while to observe that he wrote at the very moment when Simon de Montfort summoned the Commons; and that the politics of the Neapolitan friar are centuries in advance of the English statesman’s."
Limited.
ReplyDeleteSuppose your A/C technician needed half of money up front to replace your furnace. Then when it was time to do the installation, told you he needed that amount again because he'd used the money you gave him to buy a furnace for the local soup kitchen.
Was justice served?
OK, let's apply Friedman's thesis to some specific examples. American companies have had to deal with American labor unions and American labor laws, and have decided that they can make a better profit by opening up factories overseas, where the workforce is likely to be more desperate and willing to work in sweatshops under unsafe working conditions, employing child labor in a way that keeps the children from getting educated (thus perpetuating the cycle of poverty), and where they can be paid wages that are well below what even in those countries would be a livable wage. Charles Dickens' novels are all about capitalists who exploited the poor and mistreated their workers. But people working in these factories live lives that would make them envious of Bob Cratchit.
ReplyDeleteSo, is Scrooge, or his successors who are the executives of companies like Nike, right in asking if the prisons and workhouses are in order? Do they have a duty to make sure that their products are produced in a manner that is respectful of human rights? It seems to me as if Ebenezer Scrooge is being a good Friedmanite if he thinks of his company's profits as opposed to the rights of his employee.
Oh hey, someone came up with a good "conservative" critique of A Christmas Carol.
ReplyDeletehttps://www.thetelegraph.com/news/article/Beloved-Christmas-classic-attacks-free-enterprise-12659712.php
But people working in these factories live lives that would make them envious of Bob Cratchit.
ReplyDeleteGood point. We should levy tariffs on products coming from outside the US. That would have the double effect of saving those people miserable lives working in a sweatshop and would provide more jobs to American workers. Win-win.
Boy that would have been an anathema idea to conservatives prior to Donald Trump. As one conservative commentator once put it, a tariff is a tax. So, if you impose a tariff you are raising taxes. But I do think the tax rewards actually favor outsourcing work to foreign countries, and that should be reversed. A lot of people thought Trump was going to do something about this, but he never did.
ReplyDeleteA tariff is a tax. That's the definition.
ReplyDeleteAnd Trump did do something about the tax situation by raising tariffs, most obviously with China.
And why do you think he killed NAFTA and re-negotiated trade with Mexico and China. Germany also taxes American car imports to high heaven and he mentioned the imposition of a 25% import duty on German cars.
If Victor despises woke corporations as much as I do, I consider that progress.
ReplyDeleteWhen I think of business ethics, I think of my own and the people I do business with. But, I am no Nike and I prefer to pay a little more to spend my money where they know my name. I know I can save by buying my home repair stuff at Home Depot, but Mike is the guy owns the hardware store down the street, Ching is the lady at the Chinese restaurant where me and Mrs. Perspective eat about twice a month, Joseph is the guy I buy most of groceries from, Bill is the guy who fixes my car (now that I stopped doing my own repairs), Phil is the guy who fixes my A/C, Jim, a true master, is who I call when I can't figure out how to do some carpentry, my son-in-law Keith is my plumber, and then there is one of my favorites, Karla. After her husband died in an auto accident 27 years ago and found herself a single mother, she opened the second Mexican restaurant in town (now there are four, not counting Taco Bell). She is getting ready to retire.
I avoid Nike, Amazon, Google, and all the other woke Democratic party shills as much as possible. However, I do have a weakness for the $1.00 McDonald's coffee (now $1.50 under Biden) and get my gas from Chevron and so on. I'm amazed that gas companies can go five miles off shore, drill down several thousand feet, pull up a few pounds of sludge, transform that into fuel, transport it half way across the country and sell it for $2.00 a gallon (before Biden and before local gas station mark-up and insane California taxes) which will propel me in my (woke company) Ford hybrid about 40 miles down the road at 65 miles per hour. Capitalism and business is good!
One problem with blindly banning exports from countries that have sweatshops is the impact to those workers. For instance, those workers choose to work under those conditions because the alternatives are worse....scavenging in dumps or prostitution...so simply closing those shops removes the option for a better, stable income.
ReplyDeleteModern industrial societies went through the same sweatshop phase as third-world countries and came out the other side once the country's infrastructure was established and reached critical mass. All of that can potentially happen much faster now:
"So the potential for growth is explosive. But first, countries have to get their institutions right, things that protect private property, the rule of law, give economic freedom. These things can attract the capital and the technology to the country to make the growth explosive. It’s still a process. Sweatshops won’t disappear overnight. But that process can go much quicker now than it has in the past. But it depends crucially on institutions that promote economic freedom."
"Oh hey, someone came up with a good "conservative" critique of A Christmas Carol."
ReplyDeleteVictor thinks a progressive pretending to be a conservative supporting an awful fictional character is somehow worth passing on? Good grief, if I pretend to be a progressive supporting Saruman, would that be anything but idiotic?
Okay, I'll try. See Saruman is a bad guy. Progressives are bad guys. Progressives are like Saruman and support Saruman because he does bad things and is mean to people. Tolkien was a great writer, he wrote about how bad progressives are by characterizing them as evil wizards. The end.
ReplyDeleteIt's because socialists have always believed that ordinary people, left to their own devices, are evil and will destroy society rather than be benevolent, charitable and kind. So it is up to them, those of extraordinary virtue (and "liberal" arts training), to force the evil populace to do "virtuous" things like paying for everyone's abortions, wrecking the economy, allowing biological males into little girl's restrooms and keeping their mouths shut if you think any of that is wrong.
ReplyDeleteGod save us from the extraordinarily virtuous.
Saruman wanted to make people happy. Happiness is found in a central power. When everyone has guidance from the central power they are happy. Saruman only wants to make people happy. We are happy when there's no more racism, bigotry, homophobia, xenophobia, only allegiance to Sauron will make this dream come true. The end.
ReplyDelete"God save us from the extraordinarily virtuous"
ReplyDeleteI'm glad my local business guys and gals are making a profit. I'm guessing Mike at my local hardware store is making about 30% GTM (gross trading margin) while Home Depot is at about 15% GTM, and HD buys in bulk.
I'm guessing Mike is the Scrooge.
Victor thinks a progressive pretending to be a conservative
ReplyDeleteIf I say I'm pretending to be a dog and I quack, that makes me a quack, not a dog.
I didn't see anything resembling actual Tea Party values there. The author is an ignorant fool at best, maliciously deceitful at worst.
The author is an ignorant fool at best, maliciously deceitful at worst.
ReplyDeleteOn the contrary, the author is one of the "extraordinarily virtuous" ™! You would see that if you weren't a knuckle dragger prone to evil. The object is to signal that extraordinary virtue.
Limited Perspective,
ReplyDeleteDoes Victor think this is comparable to the profits of the guy (just he and his wife) who fixes my heating and air unit?
The training and sacrifices involved in becoming an HVAC repairman are an order of magnitude less than those for a professor.
Then ask, which one is greedy and also which one is more valuable.
Both are valuable. The professor contributes much more to the overall economy.
bmiller,
ReplyDeleteIt's because socialists have always believed that ordinary people, left to their own devices, are evil and will destroy society rather than be benevolent, charitable and kind.
As opposed to conservatives, which have abandoned the notion that we are all born into a sinful state?
One Brow,
ReplyDelete"Both are valuable. The professor contributes much more to the overall economy."
I also appreciate an opposing point of view. It adds to my perspective.
The professor contributes much more to the overall economy.
ReplyDeleteBy being part of a financially crushing education system that leaves students in debt for countless years?