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Jesus Creed

Found this here and thought we could have a conversation. In brief, should we expect big business to do good and to make money? Does this make a difference when you choose your vocation or your job or your employer? Is this question being asked more and more?

Bill Gates began this discussion a year ago by arguing for a new
type of capitalism where firms would do good while doing well, solving
the problems of poverty and disease that still stalk the planet.

In a sense, Mr. Gates’s real intellectual opponent is Milton
Friedman
. Nearly 40 years ago, Friedman argued, in the pages of The New
York Times Magazine, that corporations have only one responsibility:
maximizing profits. Firms have been entrusted by their shareholders to
earn money. If shareholders then want to use that money to do good,
then that is the shareholders’ business. Friedman argued that corporate
chieftains should not use other people’s money to cater to their own
social causes.

Two of my favorite scholars, Richard Posner and Lawrence Summers ……. Mr. Summers
pithily sums up the case against Mr. Gates:

It is hard in this world to do well. It is hard to do
good. When I hear a claim that an institution is going to do both, I
reach for my wallet. You should too.

Mr. Summers reminds us of the problems created by hybrid
institutions like Freddie Mac and Fannie Mae, where profit maximization
and public support came together to cost taxpayers plenty….

The hard problems concern whether there is ever a role for
corporations that try to do more than just the minimum
profit-maximizing level of ethical behavior
. The problem with
Friedman’s vision is that not every employee is crazy about the idea of
spending their working life solely to enrich anonymous shareholders. As
the world has gotten richer, more and more people have opted for jobs
that at least appear to be serving some greater good
.

In econ-speak, a sense of doing good is a luxury good. Journalists
like to think that they serve truth as well as their newspapers’
owners. Doctors like to think that they have a duty to patients as well
as to the H.M.O. that employs them. Firms cater to this human taste by
frequently telling workers that they are doing both well and good, and
sometimes that talk is more than just empty employee relations.

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