Quote from Milton Friedman in 1962:
A businessman or entrepreneur who expresses preferences in his business activities that are not related to productive efficiency is at a disadvantage compared to other individuals who do not. Such an individual is in effect imposing higher costs on himself than are other individuals who do not have such preferences. Hence, in a free market they will tend to drive him out.
Interestingly, Friedman wasn't talking about "social purpose businesses;" rather, he was arguing that free markets will drive out racial discrimination. I'd say this is pretty applicable to what's going on in the Middle East today.
On a somewhat related note, our Social Entrepreneurship class (and my Ethics class last term) had some good discussions on the feasibility of social ventures, socially responsible businesses, purely profit-motivated firms operating in the social sector, and nonprofit business ventures.
Here are two good articles that address the issues:
Debate between Milton Friedman and John Mackey (CEO, Whole Foods) in Reason Magazine. Very good dialogue... well worth reading.
Cover story in this month's Harvard Business Review by uber-business professor Michael Porter w/ Mark Kramer.
More commentary later, but I must study now. Really.
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