Economics Essay on Profits are not the only business of business

Profits are not the only business of business

             I strongly disagree with the thought that profits are the only business of business. Elena’s argument is both logical and reasonable. However, she bases her reasoning entirely on Friedman’s arguments, which are not entirely true. The distinction between the business owner and the hired manager is excessively sharp whether it is general partnership, sole proprietorship, limited partnership, or a public corporation, its aim is to increase profit. Unless the business is a non-profit making enterprise, its goal remains to make profits. Elena’s argument limits the extent to which corporate managers should act responsibly. The corporate structure enables the amassing of substantial amounts of capital. Additionally, it provides limited liability. These two features supplement each other. Friedman neglects all the ethical concerns for the sake of a purely economic approach (Folsom 122). He maintains that no other group can have a stake in the corporation’s actions.

            By insisting that the sole purpose of business is to make profit, Elena is confirming the fact that “profits are sought by individuals who are acting in their own self-interest while the solutions to alleged social problems are sought by individuals who are not acting in their self-interest” (Folsom 122). In essence, the great concern is not about what the individuals conducting the business should do but the individuals should have a right to do. If businesses were left to entirely focus on making profits at the expense of social responsibility, then cases of substandard goods and customer complaints would increase in an unprecedented manner. In a nutshell, business enterprises ought to work for social concerns and not only for profits.

Works Cited

Folsom, Burton W., Jr. Entrepreneurs vs. The State: A New Look at the Rise of Big Business in

America, 1840-1920. Reston, VA: Young America’s Foundation, 1987.