“People have responsibility”

In late 20th century, offspring of capitalism re-emanated from the most counter-intuitive and pragmatic thought by Friedman, “Business have no responsibility, People have responsibility”. He further decapitated the viability of socialist policies and formed a well- versed doctrine elucidating about the economic loss bore by the shareholders when corporate business are required by law to fulfil their ‘social responsibility’ towards society.

Determining the ‘social responsibility’ of a business is extremely subjective. Pressing on it reflects business have the primary responsibility of earning profits, which also is the return earned by shareholders. Functioning of business prominently is managed by the executives and they are responsible for working in the best interest of shareholders. They basically are the agents of shareholders handling their funds. If these funds are used in any other non-business activity by these agents in fulfilling the ‘social responsibility’ of business, then it’s a huge conflict of interest against shareholders performed by the executive agents. When economy is defined to be formed by four primary factors which includes the shareholders as capitalist and corporate businesses as entrepreneurs, if any factor of production works against the rationale of providing maximum returns to it’s cost, economy will be operating at below potential level. It also defines the course if enterprises work against the rules of business which provide free market competition, still there will be economic cost to bear upon. Hence, business should work upon the sole purpose they were laid upon to earn profits and maximising shareholders interest by working in a purview of free market competition.

Therefore social responsibility should not be held upon any agents, it creates a conflict of interest in their working and also it cannot be defined for a non-living institutional framework, as it will create disharmony for less benefitted section. Therefore only an independent individual should have the social responsibility and its need to be fulfilled through the resources he privately own.