Planner Reads

(Editor’s note: This post is part of the HBR Debate “What Does Business Owe the World?”)

A business is not a family or a charity or a government. It has a specific social function with a specific purpose, which implies specific duties. One of its responsibilities — its duties — is to make a profit. I know that Milton Friedman argued famously in 1970 that profit-maximizing was the only responsibility of executives, and that’s an overstatement.

Still, think about it.

The opposite of profit is loss. Unprofitable companies disappear, along with whatever goods, services, and jobs that they provided. If executives act willfully against their responsibility to seek and make a profit, they will have failed in one of their primary duties.

We all have other moral responsibilities, and that applies to corporate executives too. Their moral responsibilities, by extension, apply to their corporations (which are not themselves agents with responsibilities). Unfortunately, far too much that travels under the cover of so-called "Corporate Social Responsibility" (CSR) fails to capture that intuition. Instead, CSR has often become a euphemism for fashionable political goals that are not only morally debatable but economically unfeasible. As a result, they have given companies incentives ...