Wall Street Journal--When Corporate Theft is Good By Jamie Whyte
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? Read the entire article. (You may need to google the title to gain access to the full article if you don’t have a subscription to the Wall Street Journal.)
Comments