Week 4 (Chapter 3: Evidence, Friedman: The social responsibility of a business is to increase its profits, Posner: Milton Friedman was Wrong, & IPCC Fifth Assessment Report)

Question 1

Define an issue

Answer 1

point of contention/disagreement between at least two disputants or points of view

Ex. Should pornography be prohibited?

Question 2

Define the main issue and the central issue.

Answer 2

The main issue: is the one we’re trying to resolve in the dispute
The central issue: when its resolution is critical to resolving the dispute (main issue)

Example:
Main issue: “should pornography be prohibited”
Central issue: “Is pornography harmful”

Question 3

What are the 5 Criteria’s of Evdience

Answer 3

1. Accuracy
2. Precision
3. Representativeness
4. Authority
5. Sufficiency

Question 4

What is Accuracy? (in terms of evidence)

Answer 4

Evidence has to be true (accurate or correct) in order to support the conclusion. False evidence is useless (might use proxies, spelling errors…)

Question 5

What is Precision?

Answer 5

Evidence should be sufficiently precise to draw the conclusion.
- Ex. To say “election was marked by violations therefore it is illegitimate” is weak because we need to know precisely how significant and widespread violations were (as well as what counts as a legitimate election

Question 6

What is Representativeness?

Answer 6

Evidence should be representative (this is a technical term that means that sample reflects variability and frequency in the population). Also connected to the variety of sources of evidence
(bolded) 1. Sample size: The greater the sample size, the stronger support for the conclusion
2. Representativeness of Sample: the more random the sample, the more representative it is of the population, the more reliable is the conclusion

Question 7

What is Authority?

Answer 7

If the argument makes an appeal to authority, the authority must have legitimately recognized relevant expertise. The objectivity of this expertise should not be in doubt

Question 8

Friedman’s Social Corporate Responsibility: A brief history of business & sustainability

Answer 8

1953: Howard Bowden authors Social Responsibilities of The Businessman

1962: Rachel Carson authors Silent Spring. Linked pesticide use (ddt) to widespread animal & human harm. Launches the environmental movement

1965: Ralph Nader authors Unsafe at Any Speed: The Designed in Dangers of the American Automobile. Accused auto manufacturers of prioritizing cost concerns over human safety

By the late 1960s the term “corporate social responsibility” was being increasingly used by business leaders. A response to increased social pressure for corporate reform and activist stockholders aiming to influence corporate goals

In 1971, Nobel Prize winning, Chicago School economist Milton Friedman, writes his famous rebuttal of the concept in the New York Times

1984. Ed Freeman authors Strategic Management: A Stakeholder Approach. Argues that firms will perform better if they focus broadly on stakeholders, versus a narrow stockholder focus. Stakeholder = Any group or individual who can affect or is affected by the achievement of the organization’s objectives. Mainstream approach today!

Question 9

Friedman’s Social Corporate Responsibility: what is his issue and what is his position?

Answer 9

Issue: Should CSR aim at social good or owners’ interests?
Position: CSR should extend only to the owner’s interests.

Question 10

Friedman’s Social Corporate Responsibility: what does Friedman argue in his article?

Answer 10

Businesses are not moral agents, only individuals composing them are agents

• Friedman argued that CEOs have a duty only to maximize profit for the shareholders. Otherwise, they are imposing a costs (like a tax) on others (shareholders, workers, customers) for social causes, in which they have no expertise.

Question 11

Friedman’s Social Responsibility: what raises political questions on two levels with his CSR?

Answer 11

1. Principle
2. Consequences

Question 12

Friedman’s Social Responsibility: Principle-Level Argument (“TEST” bolded)

Answer 12

1. If executives become basically public servants, they should be subject to the same controls (political process, etc…), which they are not.
2. In principle, this means accepting the socialist idea that resources should be allocated by political rather than market mechanisms.

However, if the political process is based on conformity (where the outvoted minority is forced to conform to a majority), the market process is essentially based on unanimity (where both parties voluntarily agree to a transaction)

Extending this political principle to the market process takes away the freedom at the foundation of it—this is a socialist idea.

Question 13

Friedman’s Social Responsibility: Consequences-Level Argument

Answer 13

1. If the executive could get away with spending others’ money, how does he/she know how to spend it so it leads to the public good and at whose expense? They are not trained for it.
2. The other problem is that he/she is unlikely to get away with spending this money—the owners will fire him/her (e.g. unions example)

Question 14

What are Conceptual Models?

Answer 14

Help us make sense of the world, and where the business fits in it

Question 15

What is the relationship between business, society, and nature, define the 3 views: The Disparate view, Intertwined view, and Embedded view

Answer 15

The Disparate view: Consistent with Friedman’s perspective, this traditional view sees business as separate from nature and society and as one of the most important systems
- completely separate

The Intertwined view: The dominant conception of CSR /Sustainability: Doing Well by Doing Good. Social & environmental initiatives make more $$. Win-Win-Win
- sorta dependent

The embedded view: On this view, business is the most dependent system: Without nature and society, business can’t exist. Finite systems have limits
- Businesses are dependent

Question 16

Posner’s Milton Friedman Was Wrong: What is are the reasons that Friedman is wrong? (“TEST” bolded)

Answer 16

Wrong—Reason 1: He complained that businesses supported wage and price controls. Friedman believed these controls would harm the economy. Businessmen became short-sighted and muddle-headed

Wrong—Reason 2:
Business executives are employees of the corporation, not shareholders.

Friedman’s Strongest point:
Business leaders are rarely qualified to determine the best public use of funds, so there is no guarantee of ethical behaviour from the switch to shareholder theory.
To guarantee to stop them is to punish them through the law.

Question 17

what was the IPCC 5th assessment’s primary claim?

Answer 17

Human activities are changing the earth’s climate and threatening the livability of the planet.