“‘There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits 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. ’”[1]
Before my time, Gordon Gekko – a character played by Michael Douglas in the 1987 film Wall Street – captured the entrepreneurial spirit of an entire generation during his iconic “greed is good”[2] speech.
In his speech, Gekko implores individuals and corporations to embrace greed. Greed, argues Gekko, “captures the essence of the evolutionary spirit”[2] and “has marked the upward surge of mankind”[2]. Both Milton Friedman and Gordon Gekko concur that the pursuit of profits or “greed … for money”[2] is the sole responsibility of a for-profit organization.
A corporation undertaking any other type of responsibility, be it “social responsibility”[1] or some other matter not concerning maximizing profits is failing in its role as a business. This is because using corporate money “for a general social interest”[1] oversteps the boundary of a business by allowing executives to direct revenue – the money of the stockholders, employees and consumers – to whatever charity they deem fit. The money used for the social cause is lost money for the corporation, stockholders, employees and so on. Friedman encourages privately investing money in social causes, but argues that it is counterproductive for company profits to be thrown at these causes. Corporate donations to social causes interferes, and is often detrimental to the pursuit of profits.
The characteristic of Gordon Gekko that needs to be embraced by the modern businessman is his unrelenting pursuit to maximize profits for personal gain and greed. In doing so, a businessman fulfills his role in maximizing profits for his business and himself. The downside to Gekko’s greed was it drove him to unethical and illegal business practices. A minor adjustment therefore must be made to the iconic Wall Street quote: Greed is good, but only if you play by the rules.
Daniel Boissonneau-Lehner
[1] Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits”. The New York Times Magazine, September 13, 1970. Accessed September 26, 2010. <http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html>
[2] Stone, Oliver. Wall Street. Perf. Michael Douglas. Twentieth Century Fox Film Corporation, American Entertainment Partners L.P., Amercent Films, 1987.
