Milton Friedman famously decried corporate social responsibility (CSR) in a 1970 New York Times article. At the height of the Cold War, he made a powerful statement that businessmen who support CSR are “unwitting puppets” in the hands of the intellectuals who intend to emasculate the concept of a free society. The main thrust of Friedman’s argument was that managers are agents of the shareholders, and their primary and only duty is to serve the interest of the shareholders by increasing their return on investment. Therefore, when managers spend on CSR, they are spending shareholder funds based on their whims, which is akin to putting an extra tax on shareholders by individuals who were neither elected nor given the mandate to impose taxes.
