HARVARD BUSINESS SCHOOL - RESEARCH & IDEAS - Aug 4 - Most of us tend not to think of capitalism as a moral system...it's one step removed from the law of the jungle. Capitalism has always had a moral framework that runs as a thread through the writings of Smith, Friedman and Hayek among other foundational thinkers.
Capitalism earns its legitimacy through the idea that the pursuit of self-interest explicitly delivers on certain moral goods for society. Milton Friedman said "the social responsibility of business…is to increase its profits." Friedman went further to say that any attempt to curb the free market was harmful to the good of society.
Managers should shift their ethical framework in order to preserve the system of capitalism itself. Capitalism is incredibly effective in leading to economic growth and has lifted hundreds of millions of people out of poverty where previously deployed systems did not. Also, capitalism tends to be self-correcting. When the free market fails, the market itself steps in to correct the problem.
But if enough CEOs and lobbyists get together and say there is something not quite right about what we are doing, then we may be able to start changing norms.
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