Tuesday 20 February 2018

Rivals embracing Milton mantra

ECONOMIST: Milton FriedmanDaniel McConnell

Since the 2008 crash, phrases like 'profit' and 'ambition' have become toxic ones in the Irish lexicon.

However, an increasing number of leading companies have said that if Ireland is to recover we must embrace the famous mantra of economist Milton Friedman, who said it was the "social responsibility of business" to increase its profits.

In the wake of the US sub-prime disaster, the global crash of three years ago, the BP disaster in the Gulf of Mexico last year, and of course the cancer that is Anglo Irish Bank, a hot debate has been raging over the issue of "corporate social responsibility (CSR)" and whether it should be embraced by all leading companies.

However, those countries and corporations who advocate Friedman's viewpoint are fighting back, saying that profits create jobs, therefore leading to advancement, and helping economies to grow.

They have dismissed CSR as a "farrago of value-destroying nonsense".

Well-educated people in countries across the globe were asked what they thought of Friedman's assertion that businesses should forget about social responsibility and concentrate on making money.

The startling results of the survey, published in the latest edition of The Economist magazine, gave a fascinating insight as to how the social responsibility war was being fought.

The world's most pro-Friedman or pro-business country is the United Arab Emirates, with 84 per cent agreeing with the dictum. In second place, is Japan, which after two decades of stagnation is abandoning its model of stakeholder capitalism.

Surprisingly, countries like Britain and the US, where traditionally the virtues of Friedman would have been loudly extolled, have "gone wobbly", with those surveyed giving only a lukewarm response.

As for the Irish, we were among the least taken with the notion, a clear reaction to the chaos the country is still mired in. But a word of warning, those countries against which we will be competing, like India, Indonesia and Mexico, have all shown a disdain for social responsibility and a desire to prioritise profits.

Sunday Independent

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