How Milton Friedman Read His Adam Smith: The Neoliberal Suspicion of Business and the Critique of Corporate Social Responsibility

Abstract

Using archival material and underutilized printed sources this article provides an intellectual history of Milton Friedman’s critique of corporate social responsibility. This evidence demonstrates how his arguments developed within the context of ‘neoliberal’ discussion in Europe and the United States about the problematic nexus of business and political influence. Friedman and others interpreted Adam Smith’s warning about business and social responsibility to connect CSR with their suspicions that businesses constantly sought to use political resources to suppress competition. The article thereby demonstrates the critical stance of Friedman’s critique and his attentiveness to the politicization of business. Yet his critique was also shaped by a specific historical understanding of corporate power and monopoly in the immediate post-war years in America. Finally, by using this analysis to rethink how we use historical knowledge to conceptualize the field of CSR, the article suggests how a political history of CSR can enrich contemporary debates.

This article is now forthcoming at Modern Intellectual History in a much revised form. Thank you to everyone who provided comments!

Keywords: CSR, political economy, neoliberalism, business ethics, Milton Friedman, CSR history, monopoly, corporate political activity, corporate history, corporate law, corporations, Chicago School

JEL Classification: G34, K22, L21, N22, K21, M14