Friedman and the social responsibility of corporation

The Nobel Prize winner Milton Friedman was praised by The Economist (2006) as
“the most influential economist of the second half of the 20th century…possibly of all
of it". In 1970, he published an essay on the social responsibility of business in the
New York Times Magazine. In his article, he explains in complex detail about the
notion of “social responsibility” of businessmen within a corporate environment and
their goal to increase profits.

Indeed, at first glance, this quote seems to capture the mentality of many of the
actors in the financial sector in our era. Banks and financial institutions are accused
of acting unethically and only in their self-interest to increase profits along with
brokers and investment bankers who are accused of primarily aiming high incentives
and bonuses by selling unconscionably high-default assets. Scholars argued that
corporate governance failings and lack of ethical behaviour were significant causes of
the financial crisis of autumn 2008 (Skypala, 2008).

This essay discusses the question whether the above statement made by famous
economist Milton Friedman is still relevant in the context of business today and to
what extent it is relating to the financial sector and in particular to the financial crisis
of autumn 2008.