Week 40 (2/2) - Friedman's principles for constructive use in SES sustainable management

Argue how the principle advocated by Friedman might be put to constructive use in the sustainable management of this SES.

"There is one and only one social responsibility of business -- to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." -Milton Friedman, New York Times Magazine, September 1970

In the coffee industry SES analyzed in the previous blogpost, the sustainable management is needed at a local scale, national scale, as well as global scale. Friedman's principle could be applied in certain actions taken by the users the coffee SES for resource management. For example, Friedman discussed the competitively of private enterprise to force people to be responsible for their own actions and make it difficult for them to "exploit" other people. This could be applied onto the governance systems of coffee industry. If the labor department of the government is able to not only make, but actually enforce rules for working safety and wage limits, the coffee workers would be able to count on the implementation to the government regulations to safeguard their income as well as working conditions.

Also, due to the competitivity of coffee farms, farmers also would be monitoring and providing surveillance in order to make sure the competitors play by the rules. The local farmers could even go further into making their own rules for resource distribution such as water rights for irrigation. More efficient resource distribution could then better secure the regional production stability. I the long run, the coffee from the region could be more well-known and the market demands of products from this region could be increased.

Milton Friedman wrote in his article, "To illustrate, it may well be in the long-run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects." This example demonstrated that Friedman's arguement boundary is not only for short term investment recovery. The example he gave is out of self-interest but was able to positively impact the target group at a greater level. This could be introduced into the coffee farm community which poverty continues to be an issue. It is reasonable to make the assumption that Friedman's principle also supports actions that will generate profit in the long-run, regardless of the action's capability of increasing the profit or not. Therefore improving coffee farming's working condition, investing in production knowledge sharing and training would benefit the farm's productivity as well as securing the coffee supply for the retailer. Eventually the social and ecological performances could be improved due to these decisions made by private firms.