Truman proposed to the board of directors of Trumarc, Inc., that the corporation distribute one percent of its pre-tax yearly income to feed the poor. To Milton Friedman, Truman's proposal would be considered unethical, because it violates the purpose for which the corporation was established.

Question

Truman proposed to the board of directors of Trumarc, Inc., that the corporation distribute one percent of its pre-tax yearly income to feed the poor. To Milton Friedman, Truman's proposal would be considered unethical, because it violates the purpose for which the corporation was established.

Quizplus · Accepted Answer

Milton Friedman argued that the primary responsibility of business is to increase its profits, and any activity not aligned with profit maximization, such as distributing corporate income for social causes, is considered unethical because it deviates from the corporation's purpose of generating value for its shareholders.

Truman Proposed to the Board of Directors of Trumarc, Inc