How Corporations Help Society

LETTERS TO THE EDITOR

To the Editor:

Milton Friedman once wrote “there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits.”

Yet Caroline Williams of the Nathan Cummings Foundation (“A Focus on Corporate Responsibility,” Endowments supplement, August 4) apparently thinks that the purpose of business is to yield to whatever social cause is the current rage among liberal activists.

Ms. Williams urges shareholders to propose resolutions at corporate annual meetings compelling businesses to implement policies combating so-called “global warming.” But a misguided campaign that forces a business to act against its own interests can only have long-term harmful economic effects, reducing profits and lowering the value of stock shares.

What happens to retirees whose pensions are tied to stock-market investments?

Lower stock prices also send a signal to the capital markets, which are essential to the creation of new businesses and new jobs.

If Ms. Williams feels greenhouse gases pose an environmental threat, she might use the resources of the Nathan Cummings Foundation to help develop new technologies. Better that than its current grant making to left-wing advocacy groups that promote fear of global warming and other junk science.

Terrence Scanlon
President
Capital Research Center
Washington