https://bazar.ufm.edu/author/mkrause/ – John Mackey. From Whole Foods, Discuss
Milton Friedman: “The social responsibility of entrepreneurs is to increase their profits.”
The article, published in the New York Times review, is clearly challenging, typical of Friedman. With an aggressive title he seeks to attract the attention of readers. This is how a student comments:
“Friedman emphasizes her rejection of the company’s social responsibility. Friedman states that CSR cannot be strictly discussed since it is people who take responsibility and not an artificial corporation. Those who must be responsible are the people and not an artificial corporation. Those who must be responsible are the entrepreneurs, owners, or those who represent the companies, that is, the corporate executives. Now, what does that responsibility consist of? ”
“The corporate executive is also a person in his own right and as such he may have many other responsibilities that he recognizes or assumes on a voluntary basis: to his family, his conscience, his feelings of charity, his church, his clubs, your city, your country. You may feel compelled by these responsibilities to dedicate part of your income to causes you consider respectable, to refuse to work for certain corporations, and even to quit your job, for example, to join your country’s military. If we wish, we may refer to some of these responsibilities as “social responsibilities”. However, in this sense, the corporate executive is acting as principal and not as agent; you are spending money, time, or energy, and not the money of your employers or the time or energy that you contractually pledged to dedicate to your goals. ”
The subject is so sensitive that many do not get to see Friedman’s arguments. I do not say agree, but simply understand it. The same must have happened with many of your readers.
But students read not only this, but also a very interesting debate organized by the Reason Foundation where John Mackey, founder and president of Whole Foods, the successful naturist supermarket chain holds:
“I strongly disagree. I am an entrepreneur and a free market libertarian, but I believe that the smart company must create value for all its partners. From the investor’s perspective, the purpose of business is to maximize profits. But it is not the end of other stakeholders – customers, employees, suppliers and the community. Each of these groups will define the firm’s objective in terms of its own needs and wants, and each perspective is valid and legitimate.
My argument should not be construed as hostile to profit. I think I know something about how to create value for shareholders. When I co-founded Whole Food Markets 27 years ago we started with $ 45,000 of equity, we had sales of $ 250,000 in our first year. In the last twelve months we have had sales of more than $ 4.6 billion, net earnings of more than $ 160 million and a market capitalization of more than $ 8 billion.
But we have not achieved that tremendous increase in shareholder value by making share value our primary goal. In my marriage, my wife’s happiness is an end in itself, not just a means to my own happiness; love leads me to put my wife’s happiness first, but in doing so I am happy too. Likewise, the most successful businesses put the customer first, before investors. In a profit-focused company, customer happiness is simply a means to an end: maximizing profit. In a customer-centric company, your happiness is an end in itself, and it will be sought with more interest, passion, and empathy than a profit-focused company can. ”