Milton Friedman famously said that the only responsibility
of a business was to make a profit. But, according to Stephen Green, chairman
of HSBC, "there is a very real place for corporate philanthropy." In
a speech he gave earlier this month, titled "Tomorrow's Value," he
claimed that Friedman's ethics "will no longer do. Plain common sense will
tell you that that cannot do." It is extraordinary what absurdities can be
conjured from "plain common sense." Mr. Green has made no moral leap
forward from Mr. Friedman's point. On the contrary, his speech should have
sparked moral outrage among HSBC shareholders because corporate philanthropy is
tantamount to theft. Suppose you own a company that you do not want to manage.
You hire a manager, pay him a salary, and one day you discover that he has
transferred $100,000 to the bank account of an external party that has provided
your firm with no goods or services. If the account belongs to the manager, or
one of his relatives, he is clearly a thief. But what if it belongs to the
manager's favorite charity? Then he is still a thief because the money is not
his to give; it is yours as the owner. He cannot defend his action on the
ground that you would have willingly given $100,000 to the charity. If that
were true, then why not simply disperse the $100,000 to you as profits and
allow you to make the donation yourself?
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