In an article about Milton Friedman in the Pacific Standard, Rick Paulas quotes from an article of Friedman’s published in 1970:
There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud
The phrase “rules of the game” immediately caught my eye, as it did Paulas’:
Another thing missing from Friedman’s framework of corporations playing “within the rules of the game” was the outsized role that the corporate lobbyists have had in the creation of those rules. As Sachs points out, “[i]n 2016, special interests spent $3.15 billion to employ 11,166 lobbyists in the U.S.” If Friedman’s theoretical world was based on the ability of outside actors—like government regulators—keeping societal rules intact, then that world has long been compromised.
Years ago I read Zephyr Teachout’s excellent book Corruption in America, and was struck by her description of how the framers approached the constitution. Teachout writes:
We have two thoughts: (1) men are not always angels, and therefore structures must help us; and (2) virtue is necessary, and structures alone cannot help us. The reconciliation between these two Madisonian beliefs holds the key to understanding the moral psychology of the framers. These can both be true if one perceives a dynamic relationship between constitutional structure and political morality. Because men are not always virtuous, structures must be enacted in order to discourage self-serving behavior in public life. The public orientation that flourishes in these structures in turn helps maintain the structures, which in turn helps maintain virtue.
The argument is not merely that, in the absence of good regulations, individuals (or companies) must temper their self-interest with civic virtue. It is that good regulations must be actively maintained, and that it takes virtuous individuals to do so.