On which side are you?
I hope that famous Seth Godin will not be mad at me because I want to share a letter from his daily emails. Sometimes when I write and write and no profit around, I think that the heck, maybe I need to go after some simple things. However, I like what I write and after reading his email I wanted to share about simple but powerful truths from his writing.
From Seth Godin:
Off the hook with Milton Friedman
Nearly fifty years ago, Milton Friedman published a polemic, an article that altered the way many people think about corporations and their role in society. Countless writers have explained why it's poorly reasoned, dangerous and wrong. (Including business school deans, Harvard Business Review and Fortune).
The simple message of the simple article was: “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits..."
Friedman does add a parenthetical, "so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud,” but it's clear that his emphasis is on the first part.
Businesses, he argues, should show no corporate responsibility, do nothing to further the goals of an ethical society, do nothing to improve the lives of customers, employees or bystanders—unless these actions coincidentally maximize profits.
An interesting question that most people haven't focused on: why did this dangerous idea catch on and stick around so long?
Here it is 2017, and the Chairman of one of the largest pharma companies in the country is gleefully telling patients and the FDA to live with the costs of his profit seeking, at the same time he pays his CEO more than $95 million a year. Because he can, and, like many who lucked into top jobs at big companies, because his excuse is simple: He's just doing his job.
If the idea is so wrong, if it leads to an erosion of the social contract and the deaths of innocent kids, why are we still discussing it?
Because it's simple, because it diminishes responsibility, and because it comes with prizes and warm chocolate cookies for those in charge.
The simplicity of the argument matches up with its mendacity. There's no need to worry about nuance, no need to lose sleep over choices, no endless laundry list of social ills to worry about. Just make more profit.
Do this, get that.
A simple compass, a north star, a direction to go that absolves the employee/boss of responsibility for anything complicated or nuanced.
People love mechanical simplicity, especially when it benefits them.
The official rules of baseball are more than 250 pages long. Why? Because working the system, cutting corners and winning at all costs long ago replaced playing by the spirit of the game. Since the league can't count on people to act like people acting on behalf of the community, they have to create ever more rules to keep the system in check.
The problem is far worse in a supposed free market. When humans stop acting like humans and instead indicate that they have no choice but to seek every short-term benefit and cut every possible corner, we can no longer trust each other to act responsibly.
Off the hook feels like a simple way out. "I'm just doing my job, and not thinking hard about the side effects (or to be more accurate, the effects) of my actions. Not only that, but one of the things that's part of my job is lobbying to have fewer rules. Because working the refs is good business. And because everyone is doing it, I have no choice but to do it too."
Of course, it's difficult for us to solely blame poor Milton. Lots of us have bad ideas, I've certainly had plenty. No, we need to blame ourselves for letting selfish corporate officers get away with this reasoning. When we go to work, or partner with, or buy stock in a company that signs up for Milton reasoning, we're rewarding people who have long ago stopped acting like people.
Profits are fine, they enable the investment we need to produce value. But almost nothing benefits from being the only thing we seek, and the pursuit of profit at the expense of our humanity is too high a price to pay.
Here's a different version: A business is a construct, an association of human beings combining capital and labor to make something. That business has precisely the same social responsibilities as the people that it consists of. The responsibility to play fairly, to see the long-term impacts of its actions and to create value for all those it engages with."
How about you? What do you think?
All the best, be healthy and wealthy, Nemira.
Recent Comments
21
I am a resident of Chicago as well. There is an old saying money is the root of evil, I don't remember where the statement originated, but they got it wrong, money is a necessary tool. Man is the root of evil. The pharmaceutical companies in the US are bordering on criminal, what was the mark-up on the aids medication 700 % ? No accident I read this post today. I got a call from a company stating I had been approved for a government grant that I did NOT apply for, all I had to do to get the 9000 dollars was to place $180 on a Walmart card to get the money released. They even gave the address of Department of Health and Human Services in Bethesda. HA HA HA! On point NemiraB
It's the love of money that is the root of all evil. There are many many scams out there to get money. Be careful!
I agree the Pharmaceutical companies are the worst.
Well money can't be the end-all or I wouldn't be in WA, where I haven't made a cent. But there are so many other benefits. This conversation can go on forever. Thanks for sharing. Debbie
I guess that it is the universal topic but Seth Godin explained so clearly that I wanted to share with others. All the best, Nemira.
Unless all healthcare becomes collective and in government control, those extortionate prices will stay, when pharmacy companies have a monopoly position they can charge what they want and earn what they want
Hi, Loes, thank you for the comment. I guess that you in Holland have a different system where the human being is in the first place, not profit?
Yes Loes, I guess in a socialistic State, healthcare is collective and in the government's control, but not so in the U.S.. Would you also want the internet in a collective and under the control of the government? I don't want either.
I don't think so, hospitals are complaining about the cost of lung cancer medication of $100000 a cure and insurance companies are refusing treatments and medication of all kind because of the high cost. Medication is being replaced for cheaper, less effective ones, the patient will live but with less quality, they don't give a f*ck. The own contribution to the treatments increases, like as the insurance fee too.
No, the Netherlands isn't at all that compassionate with its citizens
You are right Nemira, the rest of the world thinks we're nutty here in the U.S because of the way we're fighting about health care now. But I don't know of a better place to be on the planet if I were to need some serious and immediate medical care. I take a mild BP pill every day and it costs me $4 a month.
Wayne
Nemira.....good post.....very thought provoking subject. I guess my position is that all business needs to find it's own responsible profit place in the chain. Profit equals health for a company.......no profit, no health, no jobs. But the pharmaceutical situation was clearly a profit gouge....unethical in anybody's book.......went far beyond the health of the company.
Friedman's philosophy that the one and only social responsibility of a corporation is profit, is as you say, 50 years old and doesn't totally fit today. Good and financially healthy corporations do far more locally than supply jobs. But corporate (company) profit is of course mandatory in a free market society. It is the engine that drives the U.S. economy.
Wayne
(gardenguy)
Hi, Wayne. This post is from Seth Godin. I got it with emailing list. It sticks to me as the way to prompt people to think about their missions on this earth. Maybe it sounds exaggerated, but without it, people aim in short gain if we would think from the universal perspective. The profit is great and money is vital too for everybody but there are plenty of ways how to do it without harming others. Here WA comes to mind. They choose the way which works for everybody.
Thanks for the comment, all the best, Nemira.
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The business of business is business. They are not job banks and they are being beat on constantly, at least here in the USA! Profit is necessary or they go out of business. They should be socially responsible, however, having that mandated by an overbearing government stifles creativity, growth and threatens the business so their business is no longer business, it is filling out forms, forming re-education classes and making sure they are doing the 'right' thing and thinking the 'right way'.
None of this helps anyone!
Gouging people on pharmaceuticals? NO, but if you will notice, many of those companies offer a lot of drugs to people in need, fro free!