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Money Talks from The Economist

Money talks: Purpose vs profit

Money Talks from The Economist

The Economist

News, Business, Economy, Finance & Economics, Business News

4.41.2K Ratings

🗓️ 17 September 2019

⏱️ 29 minutes

🧾️ Download transcript

Summary

What are companies for? The orthodoxy was that they exist primarily to pursue profit. But a new faith in higher corporate purpose as a means to address social injustice, climate change and inequality is sweeping the Western business world. How much is this trend of “reverse Friedmanism” going to change what it means to do business? Or could chief executives playing politics have dangerous consequences? Tamzin Booth hosts

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Transcript

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0:00.0

They're not authors, but they help you shape your financial story.

0:04.0

They're not an airline, but they connect global businesses across nearly 160 local markets.

0:10.0

They're not interpreters that they listen to and understand their client's needs.

0:14.8

With global expertise and over two centuries of experience, Citi provides tools, insights and

0:20.8

guidance that helps clients thrive.

0:23.0

They're not just any bank, they are city.

0:26.0

Learn more at city.com slash we are city. What are companies for? Do banks and builders, carmakers and supermarkets around the world exist solely to make a profit?

0:46.0

Or do they have some higher calling, a responsibility to make the world a better place?

0:56.6

A new faith in corporate purpose as a means to address social injustice, climate change and inequality is sweeping through the

1:01.1

Anglo-Saxon business world.

1:04.0

How much is this trend of woke capitalism going to change what it means to do business?

1:10.0

You cannot run a sustainably healthy business in an unhealthy society.

1:14.0

This is not about managing risk, it's really about managing business opportunity.

1:18.0

Or could chief executives playing politics have dangerous consequences.

1:23.0

My goal is to put us back on track,

1:26.0

worrying about the return on investments,

1:28.0

because I have 11 people in my family that are law enforcement,

1:31.0

and we need to make sure that we can retire.

1:34.0

You're listening to money talks from Economist Radio.

1:37.0

I'm Tamsin Booth and today we're weighing profit against higher corporate purpose. For three decades, the business orthodoxy has been an agreement with Milton Friedman the Nobel Prize winning economist.

1:58.0

He wrote that there is one and only one social responsibility of business to use its resources and engage in activities

2:06.2

designed to increase its profits so long as it stays within the rules of the game. But since the financial crisis, frustration has been growing

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