An Analysis of Milton Friedman (1970) and Robert Reich (2007) articles

An Analysis of Milton Friedman (1970) and Robert Reich (2007) articles

This essay is going to present an analysis of two articles by Milton Friedman (1970) and Robert Reich (2007). To achieve this, the paper will first highlight what each article is communication and in the second part it will give the similarities and differences that these two articles exhibit.

Robert Reich’s articleexplores the responsibilities of citizens in a democracy relative to their roles as participants in a market economy. He opines that people have forgotten their responsibility to maintain strong democratic traditions and at the same timepreserve the market and political mechanisms from running amok.He assumes that capitalism and in extent, free markets were created to facilitate free societies where decisions are made by the people. However, the article expresses that capitalism and the onset of a free market system has resulted to an erosion of the people’srights to make decisions and the government has been robbed off the power to protect its citizenry, whilstcorporates have been left to roam free with no canons or tenets to limit their operations.

Milton Friedman article addresses the role that businesses play in the society and the wider economy. The authorargues that the sole purpose of any business is to generate profits for its shareholders. He maintains that companies that adopt ‘responsible’ attitudes would be faced with more binding constraints than companies that do not adopt responsible attitudes, and this would render such companies less competitive. The article discusses how businesses and their agents should not concern themselves with having a social conscience, but should try to simply increase their profitability. It suggests that corporate executives are accountable and obligated to their principles, employees,and stockholders to maintain the highest financial intake possible whilst acting within the bounds of the law of social mores. It adds that these executives should not extend their own agendas with the corporation’s finances. According to Friedman, if business executives pander to the desires and impulses of the society such as eliminating discrimination, avoiding pollution, then they will be going against the precepts of free market economy.

Similarities and Differences between the Articles

In terms of similarities, both authors address the issue of free markets, role of corporates and the effect of a capitalistic economy on the public welfare. However, in Friedman’s article, he talks from the perspective of the corporates and he is giving a case for the corporates not to subscribe to the business ethics referred to as corporate social responsibility. His article is based on the view that businesses should entirely be concerned only with the profit making motive and leave the government to concern itself with social goods. In brief the article seems to suggest that free markets should continue and the government should only be allowed to engage in its traditional roles of taxation and distribution of wealth. He adds that the government should leave other market dynamics such as minimum wage and price controls to the market forces of supply and demand, failure to which, it may result to market failure.

In Robert Reich’s article, he is giving a case for democracy and in extent for the common citizen. He states that leaving the economy to be controlled by the corporates, or leaving the corporates to be left to set the rules in the economy is wrong and it will have the overall effect of exploiting the public all in the name of a free market system, especially if it is a monopoly.

Robert’s article brings to light the inequalities that capitalism has brought into world economies and the negative externalities that these corporations have brought and they are not held accountable for. The author gives the examples of increased job insecurities, environmental hazards such pollution and global warming. He adds that capitalism negative side is crippling economies. In Friedman’s piece, he is arguing for capitalism, he wants the governments to play a very minimal role in the economy. He is against corporates engaging in corporate social responsibilities arguing that it should be the responsibilities of the government and individuals who feel philanthropic enough to engage in it. He states that the sole aim of the corporate is to maximize profits, and therefore, a corporate executive who is an agent of the shareholders should only engage the business in activities that serve the interests of these shareholders, the key interest being profit maximization and in extent wealth maximization.

Friedman insists that the employment of social responsibility kills the very foundation of a free society. He believes that eventually, the decision of corporates to engage in social responsibilities will result to more external or government controls or regulations on business, and this would lead to the death of the business entity which he says is bad. On the contrary, Robert believes that the government should play a more active role in the economyto safeguard the interests of the public, something which he calls democracy. However, he adds that this has been compromised as most corporates through the use of bribes and kickbacks are able to buy political influence which drowns the voice of the average citizen.

In conclusion, the two articles explain and clarify the role that multinationals play in the economy and the negative and positive sides of a free market. Robert opines that free markets have resulted to shrinkage in democracy, while Friedman gave a case for corporates to engage in their primary role of profit making. Both articles and approaches present valid arguments depending on which side the reader wants to lean.


Works cited

Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits.” New York Times September 13, 1970.

Reich, Robert. How Capitalism is Killing Democracy. September 05, 2007.

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