American management has been very successful in fighting unions. Only 7.2% of private-sector workers are unionized. Management has used threats of plant closings and outsourcing to compel a disorganized workforce to accept stagnant wages and declining benefits.
If our society were to start all over and design a structure for ownership of corporations, would anyone advocate such a top-down, authoritarian model in a society that calls itself democratic?
Milton Friedman once said that "The Social Responsibility of Business is to Increase its Profits." Under the standard American model of corporate ownership, Friedman is quite correct.
Under that model, the only legitimate purpose for corporate expenditures by management is to generate profit for shareholders. For management to spend money on the welfare of workers and their community is to misappropriate other people's money.
But what if businesses can both compete in a free market and be dedicated to the personal fulfillment of their workers and the betterment of their communities? Of course, businesses must be profitableotherwise they are wasting scarce resources.
However, why must profit be the only goal of business activity? Food and drink are necessary for human survival, but that does not imply that they are the only, or even the primary, goals in life.
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