Kenneth J. Arrow | Social Responsibility and Economic Efficiency
Arrow first reveals the shortcomings in arguments against the social responsibility of firms, or in arguments for profit maximization, setting the stage for why firms should be held responsible to society. In particular, corporations should be held responsible for the harms they cause, such as pollution and traffic congestion, for which they do not pay any costs. Lastly, regulations for such social obligations should be embodied in institutional, legal, or ethical manner, so all firms will accept that their competitors will also be held liable for their fulfillment.
-One type of profit maximization argument states that profits should be as large as possible, since profit represents the net contribution that the firm makes to the

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Arrow argues that profit maximization should be aligned with the social good, implying that firms should be responsible for the social impacts of their actions.

Kenneth J Arrow | Social Responsibility and Economic Efficiency