The Analysis Of Links Between Economic Growth & Climate Change
Milton Friedman claims that the only social responsibility of a business is to use its resources as efficiently as possible and generate the maximum return for the shareholders. According to the IPCC Fifth Assessment Report, there is a strong link between economic growth and climate change.
According to the Milton Friedman, the businessman who talks about the corporate social responsibilities are puppets of the intellectual force that is destroying the foundation of a free society. He also thinks that business cannot have any responsibility. He believes that corporate executives are employees and are only responsible to their employers. They are only responsible to run the business in the most efficient process to generate the maximum revenue possible. However, in the video it was stated by a member of the working group that taking action will cost us but if no action is taken it will cost more in the future. In the video, it was stated that the increase in population from 2000 to 2010 was constant however between these years the carbon emission was highest in the history.
Population increase from the period 2000 to 2010 has been the constant whereas the economic growth rose sharply. Members of the group strongly believe that there is a strong link between economic growth and climate change and businesses especially the big corporations are responsible and should take immediate actions to mitigate this problem.“Technology in the institution are missing components in climate policy. Some of the technology is already competitive but for ambitious climate policy we need a fundamental upscaling of technology.” This statement was made in the IPCC report.
According to Milton Friedman, if a corporate executive invests more money in environmentally friendly technology it would cost more. Hence the shareholders will get less return and the customers will pay more for the goods or services and the workers will get fewer wages. In this case, the shareholders, customers, and workers are paying for the social purpose, not the corporate executive. The time the corporate executive promised to contribute to running the business operations is being invested on social purpose.
Milton Friedman also told that these executives act more like a government employee than an employee in the private sector. Milton Friedman did not claim that we should not contribute to social activities. He just claimed that it should be voluntary and should depend on person to person. He agrees with the fact that an individual proprietor can reduce his own return and invest that fund on social activities, such as reducing pollution and controlling inflation or charity. It is fine if the individual is willing using his own money, not others. This a similarity since the IPCC video also showed that the first step should come individually. We should be more aware of the climate change and take actions.
Articles and videos studied:
- Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. New York Times, pp. 32–33, 122, 124, 126.
- IPCC Fifth Assessment Report – Synthesis Report (https://www.youtube.com/watch?v=fGH0dAwM-QE).
