A Stitch in Haste

Marginal Revolution revisits this Reason article about Milton Friedman's once-radical thesis that firms should abstain from engaging in "socially responsible behavior" such as donating to charities and should instead focus strictly on maximizing profits.

In the process, Tyler Cowen has a slight slip of the tongue (slip of the keyboard?):

Friedman has qualified his social responsibility claim for force and fraud, but what about negative externalities more generally (just ponder Tamiflu licensing if you want the appropriate headache)?

Huh? Developing the only pharmaceutical that is even remotely effective against avian flu is now considered a "negative externality"?

I actually see where Cowen is going in his post, but I think it's a bit too sloppy to fault the mere concept of private enterprise and private property as inflicting "negative externalities."

If I lock my apartment door on my way to work, then perhaps, technically, yes I have imposed "negative externalities" on my neighbors, who are now prevented from, for example, coming in and watching my television. But if we start defining down externalities to the point where private people and private businesses not engaging in altruistic deviation from profit maximization is an "externality," then the word no longer has any real meaning, and any or every policy proposal, no matter how anti-capitalist and anti-libertarian, is functionally and morally equivalent.

And with regards to Tamiflu specifically, I maintain my thesis that the "problem" of pharmaceutical profits is no real problem at all: If you want companies (or their investors) to do good tomorrow, then you have to let them do well today.