The Social Responsibility of Business

This set of flashcards reviews key concepts from Milton Friedman's article on the social responsibility of business, emphasizing the distinctions between individual and corporate responsibilities.

Social Responsibility

The obligation of businesses to consider the social consequences of their actions.

Free-Enterprise System

An economic system where prices are determined by unrestricted competition between privately owned businesses.

Profit Maximization

The process by which a business seeks to increase its profits by generating as much revenue as possible.

Eleemosynary

Relating to charity or charitable giving.

Agent

A person who acts on behalf of another, particularly in a business context.

Principal

An individual who authorizes an agent to act on their behalf.

Taxation without Representation

A slogan used to summarize the grievance of American colonists in the 18th century against British rule, emphasizing the importance of giving people a voice in government.

Collectivism

The practice or principle of giving a group priority over each individual in it.

Market Mechanism

The use of market prices and sales to signal desired outputs (or resource allocations).

Political Mechanism

The processes and rules involved in government operations and decision-making.

Corporate Executive

An individual who has management responsibilities in a corporation.

Voluntary Contractual Arrangement

An agreement between parties that is made without coercion.