This morning’s Wall Street Journal (Nov 24) has an op-ed by Henry Manne (Dean emeritus of the George Mason University School of Law) commenting on Milton Friedman. Now, hold your fire – I know Milton is not perfect in Austrian eyes (neither is Albert Schweitzer) Among other points, Manne comments on Friedman’s dislike of public corporations that strayed “off the reservation to join the altruistsâ€ – the question of corporate social responsibility. Milton frowned on such behavior, as you would expect. Like most of us he believed that profitability, not warm-heartedness should rule the corporate mission statement. Friedman suggested corporate legislation to prevent such a violation of fiduciary responsibility to stockholders.
At the time Manne (an expert on the congruence of law and economics) disagreed. Things are not always what they seem, he maintained. This seemingly “altruisticâ€ behavior was really maximizing profits, so leave it alone.
This discussion of 34 years ago, brings to mind an amazingly simple suggestion made by somebody (maybe my Economist son) pointing out to me that it was wiser, for say Wal-Mart, to offer low prices and let the consumer (if he choses) distribute the resulting savings to the charity of HIS choice. Better than allowing corporate management swayed by personal motives and responsible to 1000′s of stockholders, make that decision. Makes sense to me.