Final answer:
Milton Friedman's concept of 'ethical custom' refers to accepted norms in business, suggesting that companies should prioritize profit maximization within the legal and ethical frameworks of their societies. This raises questions on how businesses should balance profits with societal welfare, especially in the context of emerging technologies with undefined ethical guidelines.
Step-by-step explanation:
Milton Friedman's concept of 'ethical custom' in the context of business primarily refers to the established norms and practices that are deemed acceptable or expected within the business environment. In his views on the social responsibility of businesses, Friedman argues that the main moral responsibility of businesses is to increase profits for their shareholders. He posits that corporate executives should conform to the basic rules of the society, both those embodied in the law and those embodied in ethical custom. However, the broader societal, economic, and environmental issues are seen as the responsibility of the government rather than businesses.
Friedman's perspective has considerable implications for contemporary business practices. It suggests that while businesses should follow the ethical customs prevalent in their respective societies, their focus should be on profitability within the confines of the law. This has led to debates about the extent to which businesses should also consider the welfare of other stakeholders such as employees, the community, and the environment in their decision-making processes.
Examples illustrating the application of 'ethical custom' include adherence to fair labor practices, respect for legal contracts, and avoidance of deceptive marketing, as long as these practices do not conflict with the goal of profit maximization. Some critics argue that such a narrow focus on shareholder interests could lead to ethical shortcomings concerning emerging technologies, which often lack established ethical guidelines and legal frameworks for their use and impact on society.
This emphasis on profits can conflict with pertaining to emerging technologies, as these areas often involve uncharted ethical territory. Companies wrestling with these issues must navigate the development and deployment of technologies in ways that uphold social values without clear guidance from historical customs or established norms. The rapid pace of technological advancement makes it difficult to establish ethical practices that might limit harmful impacts while still adhering to the Friedman doctrine of profit maximization.