----------------- HES POSTING ----------------- [In reply to Dan Bromley's comments.] Dan, In all fairness to Friedman, you really ought to read the article before inferring what he means from the opening paragraph. His argument concerns the specific responsibilities of corporate executives, not business in general, and is only peripherally about their responsibilities with respect to externalities. The problem he is addressing is the ambiguity that usually accompanies the pronouncements that businessmen make about how they are fulfilling their "social responsibilities." For instance, two other paragraphs on the second page of the article read: "What does it mean to say that the corporate executive has a 'social responsibility' in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers [the owners of the business]. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price increase would be in the best interests of the corporation. Or that he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire 'hard-core' unemployed instead of better-qualified available workmen to contribute to the social objective of reducing poverty." "In each of these cases, the corporate executive would be spending someone else's money for a general social interest. Insofar as this actions in accord with his 'social responsibility' reduce returns to stockholders, he spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money." Sam Bostaph ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]