Conjuring-Up a Bad Guy: The Academy’s Straw-Manning of Milton Friedman’s Perspective of Corporate Social Responsibility and its Consequences

Abstract

Corporate Social Responsibility (CSR), the idea that business stewards have a broader range of societal obligations than maximizing shareholder value, is a mainstream theme in contemporary management research, education, and practice. Carroll points to one of its controversial aspects when he describes a clash between management scholars (who are generally pro-CSR) and their neoclassical economic contrarians. This has become an increasingly one-sided conflict with the pro-CSR side prevailing in both business and academia. CSR proponents have generally viewed Milton Friedman as an opponent of CSR. However, we argue that Friedman’s purported opposition to CSR is something of a caricature. We reveal that Friedman was concerned that his advocacy for free market operation would promote pro-social outcomes. Indeed, through his emphasis on creating value for consumers, being good stewards of scarce resources, and avoiding rent-seeking’s inefficiencies, Friedman has more in common with CSR proponents than is sometimes acknowledged.