Comparing Social Welfare Systems: UK and Germany

Comparing Social Welfare Systems: UK and Germany This paper will seek to compare the social welfare systems of England and Germany with regard to how they cater for the elderly. The paper will approach the issue by firstly discussing the theoretical underpinnings of the welfare state in both England and Germany. This initial theoretical analysis is important because it sets the foundation to understand the way in which social welfare policy in both countries approach care of the elderly. The paper will then provide a comparative analysis of the welfare issues affecting the elderly such as national insurance, elderly care, pension provisions, health care and other pertinent variables. This comparison will then seek to establish defining characteristics of each model towards elderly care. One of the most prolific scholarly expositions on welfare systems and their ideological frameworks come from Epsing-Anderson[1] who postulated that there are three distinct regimes of welfare systems. These he identified as Liberal, Corporatist and Social Democratic. Within this model, he located Germany as a Corporatist- Conservative regime and the United Kingdom as a Liberal welfare regime. Nevertheless, despite arguing how welfare states have developed and can be characterized under these three trajectories, Epsing-Anderson maintains that â€Å"the welfare state cannot be regarded as the sum total of social policies, it is more than a numerical cumulation of discrete programmes†.[2] With this in mind, the paper will now consider the theoretical underpinnings of Germany as a Corporatist-Conservative regime. Germany maintains a welfare system that is usually classified as the classical Bismarckian welfare state. This intimates that the welfare system in Germany is structured among class and occupational lines and subsequently a high degree of stratification, along the lines of market participation exists. The state, rather than the market, is the most important agency in the delivery of welfare and benefits are provided through a network of public, quasi public, private and voluntary organisations.[3] The German welfare state is characterized by a dominance of mandatory social insurance schemes such as health, unemployment, pensions, disability and long care. These schemes are predominantly contribution based benefits with the state partly contributing to public pension schemes, unemployment insurance and social assistance. Another feature of the German conservative welfare system is that it ascribes the male breadwinner model with significant corrections. It is steeped in the social policy dictates of Catholicism and this is demonstrated by a commitment to ‘the preservation of status differentials’[4] by emphasising self-help and to the preservation of a traditional family model. Women’s benefits are inextricably linked to their spouse, which in modern day society, places women at a disadvantage because they may have spent years caring for elderly relatives, or childrearing and widows pensions are inherently low.[5] However, the German welfare state has had to adapt to the new realties of modern society where more women are remaining single, divorce rates are higher and individuals have to work for much longer. The oft practiced early retirement feature of the German welfare state has also seen adjustments as families, especially women now need to reconcile salaried work commitments along with duties towards their loved ones in order to ensure a good standard of living in today’s market led economy.[6] These changes have had an effect on how elderly care is administered and ordered within the German welfare sate. Before the issue of care for the elderly with the German welfare state model is explored, the paper will now examine the characteristics of the UK welfare state. Converse to the German corporatist-conservative welfare state model, the United Kingdom is largely been historically characterized as an example of a liberal welfare model. However as Epsing-Anderson stated earlier, no one regime is a pure typology, instead they are usually a hybrid form albeit with an overarching ideology. Modern day societies demand that so called welfare regimes undergo pragmatic shifts to adjust to social, political and economic shifts. In light of these changes the UK welfare system is viewed as a liberal socialist welfare system. Firstly, the welfare system in the UK places a distinct emphasis on market-based social insurance and it uses of means-testing for the â€Å"fair† distribution of benefits. It regards as fair the distribution of more benefits to the poor or vulnerable who are viewed as more deserving. In this regard, welfare is oriented towards a class of the poor dependent or what is called the ‘residual welfare state’. The consequence of this is that, there is a low degree of de-commodification, meaning, benefits are limited and stigmatised by the general populace as the model assumes that high levels of benefit will reduce incentives to work. A high degree of stratification exists within the UK welfare state, wherein, the state plays an active role in social relations. One of the factors impacting the classification of the UK as a liberal social democratic welfare state regime is the existence of in-kind services such as free health care which is delivered through the National Health Service (NHS) and the prevalence of subsidised social housing to vulnerable groups, such as the elderly, single parents and the homeless. One of the most impacting changes within the liberal social democratic social welfare regime of the UK was pension reform in the 1980’s. These reforms saw the government cutting back on contributions that were earnings liked to retirement incomes and the heightened encouragement of private schemes as a necessary supplement. Many employers took advantage of the new low regulations on pension schemes and did not offer sufficient coverage adequate for a decent retirement standard of living and quality of life.[7] Subsequently, the UK government has not been able to negotiate adequate pension conditions with private employers on behalf of workers. All these changes within the liberal oriented UK welfare state model necessitates the discussion on how the elderly is affected. The aforementioned discussion on the typology of the welfare state in both Germany and the UK was necessary to this paper, as it sets the stage to understand how the elderly are treated within these two ideological frameworks. It also allows for an analysis on how modern day society has altered or shifted these ideological welfare state positions. To this end, the paper will now consider the comparative analysis with a focus on the various modes of care and policies towards the elderly in both Germany and the UK. One of the most important modes of care for the elderly is the provision of good health care. In societies where younger children have had to buy into active participation in a market based economy, the elderly becomes a particularly vulnerable group. Wegner explains this aptly when he states: â€Å"The absence of supportive health and social services contributes to several important problems: (1) the quality of care may fall short of adequate standards, resulting in instances neglect or abuse; (2) the strain of care giving places caregivers themselves at risk for many health problems; and (3) the heavy burden falling on a single caregiver eventually results in a greater reliance on institutional care than may be necessary.†[8] Germany’s historically conservative welfare state ideology, dictated that the family should be the main care-giver and support system for the elderly. However, with the elderly population living alone in Germany is the highest in the OECD and the European Union. Sensing that this tend would have been inevitable, Germany launched a long term care insurance scheme in 1994 which targeted the elderly. This scheme functions on a pay as you go basis and is strictly aimed at those in need of social assistance.[9] It is â€Å"financed through earmarked social insurance contributions and organized as a separate branch of social insurance†.[10] Some features of the scheme are: community based care, payment to caregivers and nursing homes, home modifications, personal assistance and general household assistance. In some instance, the elderly are also covered under the state’s accident and pension insurance schemes. Interestingly, Taylor-Gooby[11] notes that space was still made to retain conservative values with the introduction of the long-term care assistance as legislation such as cash reimbursement without any form of monitoring to encourage family supported care giving practices. In contrast, the elderly in the UK receive completely free health care under the statutory National Health Service which is free to all citizens post World War II. However, as previously discussed, the UK underwent serious cutbacks in pension provisions in the 1980’s and this has placed a significant number of retirement age pensioners at risk of poverty. Furthermore, the government also cut back in the number of public beds available for care in hospitals. This has in some ways encouraged caregiving from family members for the elderly, but like Germany, may younger family members have to reconcile paid employment with their desire to care for their loved ones. This has placed considerable strain on the NHS as the elderly suffer many injuries from largely having to care for themselves. The strain on the NHS reached such a crescendo that some doctors even recommended not treating the very old.[12] The NHS has come under great criticism for its treatment of the elderly,[13] cons equently the government, is trying to achieve the goals of its 10 year plan to reform care of the elderly in the UK which is documented in the National Service Framework for Older People. The inspection report â€Å"Living Well into Later Life†[14] recommended that the NHS needed to do more to encourage wellbeing and active ageing among the elderly. Specifically, while the NHS system is fraught with irregularities, vulnerable persons such as the elderly are increasingly being given more attention within the UK welfare state, with appeals for more state intervention, as opposed to the closed family oriented model of Germany. Housing is another important issue for the elderly. In Germany, the tradition of home care has affected the number of elderly persons who leave the home environment for care. Only 4% of the over 65 year old age group live in a nursing home or other forms of institutional care, despite the high number of elderly Germans living alone.[15] Much of these attitudes towards institutional care are grounded in German legislation as the constitution is based on the principle of â€Å"subsidiarity† whereby responsibility for welfare needs rests squarely with families, then local or federal authorities, that order.[16] The German long term care insurance â€Å"pays for personal care, medical help and social care†[17] in a nursing institution for the elderly only when familial help is no longer possible. It avoids paying for accommodation and subsistence costs and the total payment does not â€Å"exceed 75 percent of the total cost.†. Dallinger maintains that housing for the elderly in Germany is usually determined along social class lines.[18] She makes this assertion because the higher and middle class are usually financially able to employ paid care or help for their elderly family members and therefore institutional care is usually only sought by those who cannot afford such care. Nonetheless, Dallinger points out that the increase of German women entering the labour market has necessitated a greater demand on the need for the elderly to rely on the welfare state for care assistance, since younger women were the traditional caregivers. Housing for the elderly in the UK suffers similar challenges as younger family members do not have the time to care for their elderly relatives because of the gradual individualization of the society. This places the elderly at risk of social exclusion and being marginalized within modern day Britain. Consequently, the government has reduced the cost of housing council tax for the elderly and has provided them additionally benefits such as free transportation to encourage them to remain at home, while fostering active lives. Additionally, the â€Å"Living Well into Later Life† inspection report found a renewed push by the government to encourage older persons to stay in their own homes by providing them with paid personal caregivers. Furthermore an outreach group called â€Å"Supporting People† was actively advocating for the building of more sheltered housing facilities for the elderly.[19] However, it is appropriate to say that the issue of elderly housing in the UK r eceives more state intervention and welfare services than it does in Germany. This paper previously discussed how state cutbacks on pensions in the UK have placed the elderly in a particularly vulnerable retirement position. The UK now sees a pension scenario where those who are better off financially are able to buy into private pension schemes, and those who cannot afford have to rely on what is now a â€Å"diminishing† pension returns at retirement via the state. Furthermore, many individuals who were advised by pension salesmen, bought into private schemes yet saw their entire pension investments diminish in the mid to late 90’s when many private companies went bust because of being unregulated.[20] Taylor-Gooby asserts that in Germany, retirement income which traditionally came from public pensions, has seen a shift since a 2001 pension reform initiative in the state.[21] The German state has moved towards provision of a mixture of public-private pension scheme, along with great encouragement to citizens that public pensions will not suffice pre-retirement standard of living, thus plugging supplementary private schemes. Noting the failure of such schemes in the UK in the 90’s, Germany has sought to have stricter regulations on private pension providers. Furthermore, in line with its conservative ideology, women are given pension credits under the German welfare scheme for time taken off work for childrearing. It is therefore conclusive to say that while the UK and Germany have ideologically different perspectives on how their welfare state is structured, both countries have had to adapt to socio-economic changes within their societies and aim to provide better care for the elderly. The pressures of a rapidly aging population, the individualization of both societies has caused the elderly population to become increasingly isolated and at risk of being severely socially excluded and marginalized. Consequently social policies that inform traditional welfare states have become more pragmatic in their approaches while still trying to retain their ideological perspectives. Bibliography Alber, J. (1996) â€Å"The Debate about Long Term Care Reform in Germany†, in OECD (ed.) Caring for Frail Elderly People: Policies in Evolution. Social Policy Studies, No. 19, pp. 261-278. Dallinger, U. (2002) Elderly Care in the Family in Germany. Paper contributed to: COST 13A Meeting in Copenhagen, Friday 19. April 2002. Accessed on October 20, 2008 at: http://www.socsci.auc.dk/cost/gender/Workingpapers/UrsulaDallinger.pdf Donnelly, L., (September. 26, 2008) Don’t Treat the Old and Unhealthy says Doctors. The Telegraph. London. Accessed on October 21, 2008 at: http://www.telegraph.co.uk/news/uknews/1576704/Dont-treat-the-old-and-unhealthy,-say-doctors.html Esping-Andersen, G. (1994) ‘Welfare States and the Economy’, in N. J. Smelser and R. Swedberg (eds) The Handbook of Economic Sociology, pp. 711–32. New York: Princeton University Press Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism. Oxford: Polity Press. Goode Committee (1994) Pensions Law Reform. Cm 2342-1, HMSO. Laurance, J. (March 27, 2006) The Great Betrayal: How the NHS Fails the Elderly. The Independent. London. Accessed on October 21, 2008 at: http://www.independent.co.uk/life-style/health-and-wellbeing/health-news/the-great-betrayal-how-the-nhs-fails-the-elderly-471635.html Living Well into Later Life: A Review of Progress Against the National Service Framework for Older People. Audit Commission. Audit Commission. UK. Accessed on October 21, 2008 at: http://www.audit-commission.gov.uk/Products/NATIONAL-REPORT/4C4C40BE-6383-40E0-8B26-48D7FAF39A56/HCC_older%20PeopleREP.pdf Solsten, E. ed. (1995) Germany: A Country Study. Washington: GPO for the Library of Congress. Accessed on October 19, 2008 at: http://countrystudies.us/germany/111.htm Taylor-Gooby, P. (2004) New Risks, New Welfare: The Transformation of the European Welfare State. Oxford: Oxford University Press. Wegner, E. (2001) Restructuring Care for the Elderly in Germany. Current Sociology. Vol. 49(3) pp. 175-188 1 Footnotes [1] Epsing-Anderson, G. (1990) [2] Epsing-Anderson, G. (1994) pp. 711-32 [3] Solsten, E. (1995) Accessed at: http://countrystudies.us/germany/111.htm [4] Epsing-Anderson, G. (1990) [5] Solsten, E. (1995) Accessed at: http://countrystudies.us/germany/111.htm [6] Taylor-Gooby, P. (2004) p. 31 [7] Goode Committee (1994) [8] Wegner, Eldon. (2001) p.2 [9] Ibid. [10] Taylor-Gooby, P. (2004) p. 42 [11] Ibid., p.40 [12] Donelly, The Telegraph (Sept 26, 2008) Accessed at: http://www.telegraph.co.uk/news/uknews/1576704/Dont-treat-the-old-and-unhealthy,-say-doctors.html [13] Laurance, J. The Independent (March 27, 2006) Accessed at: http://www.independent.co.uk/life-style/health-and-wellbeing/health-news/the-great-betrayal-how-the-nhs-fails-the-elderly-471635.html [14] Living Well Into Later Life. Accessed at: http://www.audit-commission.gov.uk/Products/NATIONAL-REPORT/4C4C40BE-6383-40E0-8B26-48D7FAF39A56/HCC_older%20PeopleREP.pdf [15] Dallinger, U. (2002) p.2 [16] Alber. J (1996) p.264 [17] Wegner, E. (2001) p. 180 [18] Dallinger, U. (2002) p. 3 [19] Living Well Into Later Life. Op. cit. p. 68 [20] Taylor-Gooby, P. (2004) p. 61 [21] Ibid. p.35 Social responsibility, maximising profits? Social responsibility, maximising profits? In his article The Social Responsibility of Business is to Increase its Profits (1970), Milton Friedman, the Nobel laureate in economics, argued for what was summed up in the title of his article: the social responsibility of businesses is simply and solely to maximise profits! In the following, different arguments for and against Milton Friedmans statement will be presented and criticized. The inherent theories and principles will be presented as far as needed in order to discuss the extent to which this statement is true. Milton Freidman starts his famous article by describing the claim for a social responsibility of business by a pure and unadulterated socialism. For him, stating that business has a responsibility is looseness and lacks rigour. A company is only an artificial person and can not have responsibilities like an individual can. In this regard, only people in an organization, which means only the in ­dividual proprietors or the corporate executives, can have any social or moral responsibility. The managers of a company have a legal responsibility to manage the company in the best interests of the stockholders. As those shareholders first interest in investing their money in a business is to increase their wealth, then the managers sole responsibility is to maximize the profits for their shareholders. It is the legal and moral obligation of the managers to concentrate solely on serving their employers best interest, which means increasing profit. If the managers or the shareholders feel the need to fulfil any moral, social or ethical duties, they may very well devote some of their incomes or time to such activities. They are in doing so acting as a principal, not an agent. They are spending their own money and time, not those of the corporation they are working for and those of its shareholders. If an executive or a manager is fulfilling any social responsibility, this means that he will act in a way that is not in the primary interest of his employer, or worse, that is violating his duty of maximizing the profit. Any money or time that is spent by an executive in any kind of social action will not be spent to increase the shareholders wealth, to reduce prices or to increase wages. Therefore, this executive is spending someone elses money, the shareholders, the customers or the employees. Furthermore, in doing so, the manager is actually imposing a tax to the shareholders, the customers and the employees. He is also deciding on how those tax proceeds are to be spent. This is for Freidman a governmental function. In doing so, executives are, as per Freidman, simultaneously legislators, execu ­tives and, jurists. They become what Freidman calls public employees, civil servants even though they are employees of a private corporation. It is therefore the governments responsibility to impose taxes and determine the expenditures to be spent by any and all businesses in social activities. Freidman also recognizes that some businesses might act socially, contribute to chari ­ties or provide amenities. This can be described hyp ­ocritically by social responsibility or social actions. The real and hidden reason for businesses in doing so is to gain a long-term profit from such actions, like attracting desirable employees, reducing wage bill or tax proceeds. To summarize his thoughts and in his tribute to an ideal free-market, Freidman believes that no individual can coerce any other, all coopera ­tion is voluntary, all parties to such coopera ­tion benefit or they need not participate. There are no values, no social responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form. Some others do believe, all the same way, that the sole responsibility of a company is to compete to maximize profit. Adam Smith (As reported by The Economist, 2005) believes that benevolence is not necessary to advance the public interest. Rather, self-interest and profit-seeking is what brings humans to accomplish things, produce goods and services and thus benefit each others. It is false to think that profit-seeking fails to serve and advance the public interest, and that something else needs to be given back to the society to compensate for this profit-seeking. Keith Davis (1973) advances several arguments against the so called Corporate Social Responsibility. First of all, as per Freidman, the business function is an economic one, and the manager is the agent of the stockholders and has thus to maximize their profits. The second argument given by Davis is the costs of the social involvement. Indeed, many social goals do not have any economic outcome. Any business must spend with great caution its scarce resources, although sometimes very substantial, or it will sooner or later cause financial distress. Indeed, scarce resources will never self-renew, and must thus be spent in a way that guarantees at the minimum their recovery, if not gaining some premium. The author here cites some example metal foundries which could not meet the high costs of new pollution equipment and closed their doors. Another argument advanced by Davis is the lack of social skills of many businessmen. The author questions whether those businessmen, who are experts at generating profit, are well qualified to deal with social and public interests. Keith Davis also presents the argument of the dilution of the business primary purpose. A business involvement in social activities might dilute its primary focus on economic productivity, divide the interests of its leaders, and weaken business in the market place, with the results that it would accomplish poorly both its economic and its social roles. Furthermore, if a business spends resources in social programs, then these resources must be recovered, generally by increasing prices to the final consumer. In the same manner, if spending in social activities reduces the business productivity, this leads to higher production costs. If the business is operating in international markets with other firms that do not have to support such additional costs, the socially responsible ones will have a competitive disadvantage. Another argument is that the businesses that would support social activities will have additional social power. Davis states that business is one of the two or three most powerful institutions in society at the present time, giving extra social responsibilities to the business would result in an excessive concentration of power which will reduce the viability of our free society. In addition, Davis believes that although some people want businesses to be more responsible and socially involved, some dont. This lack of agreement among the public may result in a lack of broad support for the businesses and thus social frictions and disagreements. Finally, one of the most relevant arguments given by Keith Davis is probably the fact that businessmen are not accountable to people, but only to their stockholders. It should therefore be unwise to give them responsibility in areas where they are not accountable! This idea of non-accountability of businessmen and managers is also used by Michael C. Jensen (2002). Jensen criticizes the stakeholder theory as stated by Freeman (1984), Clarkson Principles (1999) and others because it contains no conceptual specification of how to make the tradeoffs among stakeholders that must be made. This makes the theory damaging to firms and to social welfare. According to Freedman, as stated by Jensen (p. 254), The à ¢Ã¢â€š ¬Ã‚ ¦ definition of stakeholder [is] any group or individual who can affect or is affected by the achievement of an organizations purpose. This includes shareholders, customers, employees, suppliers, but also the people who might be affected directly or indirectly by the companys business, through for example the damages to the environment, the layoffs, the corruption etc. Adopting the stakeholder theory brings businesses to be socially responsible. Jensen states that the managers who adopt this stakeholder theory will do what they want, spend the business money in social or other activities which are of no interest to the business or to the stakeholders, and will not be accountable for that. He thinks that the stakeholder theory must be inline with the long-term objective of value maximization. Only by keeping in mind that the value needs to be maximized that managers will find the good trade-offs between the different stakeholders. In a less extreme position than Freidman and the other authors cited above, Patrick Primeaux and John Stieber (1994), as well as Josie Fisher (2004) believe that social responsibility and long-term profit are not incompatible, and that being socially responsible could be converted into business opportunities. Orlitzky (2003), Russo and Fouts (1997) and Waddock and Graves (1997) (as cited by Husted and Salazar, 2006, p. 75) even found that corporate social performance has a positive impact on the firms financial performance! However, several different researches employed a variety of theories and methodologies to study the potential relationship between corporate social responsibility activities and other traditional measures of a firms success (Mahoney and Roberts, 2007). The results are confusing. Rim Makni, Claude Francoeur and Franà §ois Bellavance (2009) found in their study that socially responsible firms experience lower profits and reduced shareholder wealth, which in turn limits the socially responsible investments. Bryan W. Husted and Josà © de Jesus Salazar (2006) state on their side, that a business can not make maximum profit while investing in social responsibility activities. Rather, great overall social and financial output can be achieved only when businesses adopt a strategic approach, than an altruistic approach. Kant would have argued that even if the outcomes of such businesses actions might be beneficial to the society, the intention of those businesses is bad in the first place. As far as people are used as a means for those businesses to maximize their own profit, they are not ethical. All of the above are arguments that tend to support Freidmans theory, which in turn states that a business must concentrate on maximizing profit. The less extreme approaches suppose that it is possible to conciliate social activities and profit maximization, but the latter must remain the primary goal of any business. Keith Davis, in his call for a social responsibility of businesses, puts forward the arguments that acting socially would serve the long-run self-interest of the business, enhance the public image and the viability of the business, avoid any government regulation, serve the stockholders interest and prevent any future social problems, thus before all maximizing the long-term profit for the shareholders. The whole issue of ethics and business ethics is a complex one. Companies are made up of people. Multinationals are made up of many different nationalities. Several opponents to Freidmans theory do believe that businesses are part of society and as such they should reflect society norms. Companies, especially multinational ones, do have responsibilities in the world and have to be a positive influence. If a company is not ethical, then it will not survive as a company. Marjorie Kelly believes that maximizing profit and returns to shareholders isnt a legitimate mandate. Indeed, she argues that the shareholders are in effect not financing the public corporations. The money that a shareholder invests in a public company does not go to the company itself but rather to other speculators. Such investments go to the public corporation only when new common stock is sold, which is a rare event. Actually only the founders, entrepreneurs and initial investors are bearing the risk associated with a business. 99% of the money which is invested further on in those companies goes to the original investors and not to the company. So in effect, an established business is not getting any money from the shareholders, who are rather exchanging their stocks and gambling on several fields. They are thus not the legitimate owners or funders of the business which in turn does not have to care about their desires more than those of other stakeholders and the community in g eneral. Freidman, in his argumentation, states that only individuals in a business can have moral responsibility, but every business is made up of the decisions freely taken and approved collectively. The responsibility in such a decision process is thus not reduced to an individual, but rather it is a collective and shared responsibility among all the individuals who drive a business. As soon as the decisions are freely chosen and approved by the collection of individuals who run the business, they are all responsible for the outcomes of those decisions and are subject to moral evaluation. Furthermore, by seeking solely the profit maximization, some managers might allow or induce actions which may be illegal but are for sure immoral, like aggressive selling techniques or untrue publicity. They are, for this, acting in an immoral way and are responsible for that. Social responsibility refers to the obligations businesses have toward society. These are obligations that ought to be fulfilled; which indicates a normative use of the term (Josie Fisher, 2004). The author opposes to the classical economic view of Freidman and Levitt, the socioeconomic view that offers a broader account of social responsibility. Business has obligations that go beyond pursuing profits and include protecting and improving society. Boatright (2000), as cited by Fisher (2004, p.396), goes on to say that by implication businesses must be willing to forgo a certain measure of profit in order to achieve noneconomic ends. Backman, also cited by Fisher (2004, p396), identified some examples of corporate social responsibility: Employment of minority groups, reduction in pollution, greater participation in programs to improve the community, improved medical care, improved industrial health and safety. The social responsibility of a business is then to comply with the behaviours and norms that society expects business to follow. This focus on the socioeconomic view is a normative discourse, as it emphasizes how society believes business ought to behave. Several studies and researches have been conducted in the last decades on the business ethics and on how companies ought to behave. Those studies concentrate on three main subjects inherent to todays business: The globalization, the sustainability and the stakeholder theory presented earlier. Indeed, in recent times, multinational companies have grown rapidly and are yielding an excessive power. Those firms have also invaded multiple countries and cultures and are having an excessive economic and political power especially in smaller and poorer countries. They therefore are now responsible for their actions that might greatly impact such countries. Taking benefit of the poorness of local population to practice low wages or employ children is for sure a socially irresponsible action of those businesses. The second concept that has been studied in the recent ethics researches is sustainability. The sustainability is about the long-term effect of any business (or other) operation on any external factor like environment. As a matter of intergenerational equity, it is the businesses responsibility to consider the effects of their activities on the natural resources and the society and to repair any damages that can affect the future generations rights and equity. It is therefore the businesses responsibility to act sustainably. The third concept is the stakeholder theory, which has been presented earlier. The normative discourse of business ethics states that businesses ought to take into account the interests of all stakeholder groups. The different arguments presented so far range from those supporting Freidmans statement that any business social responsibility is to solely maximize the profits to the shareholders, those who support that a business can and has the duty to be socially responsible and try to advance the public good as far as this will have a beneficial impact on the long-run value and profits of the company, and finally those arguments supporting that any business ought to act socially, sustainably, invest in programmes that benefit the public interest, and be morally responsible for the outcomes of its operations. The supporters of this last view believe that businesses have to adapt their objectives, from solely financial, to a higher level which is all of the stakeholders, the public, the environment and the future generations interest. The latter arguments are therefore normative, and do provide a view about what business ought to be. This is the aim of the business ethics philosophy. From a more practical point of view, and considering how the companies are acting in todays world, it is true that many of them are advocates and practitioners of Corporate Social Responsibility. Many CEOs, especially in Europe, are convinced that basic capitalism fails to serve the public interest, and are promoting moral and socially responsible actions in their companies, like treating employees well, encouraging loyalty among customers and suppliers, avoiding any investment in unethical markets or countries that pay low wages and employ children, saving energy and recycling. However, no one doubts that this is not a standard yet. Social responsibility is not the norm today, and although some practitioners of Corporate Social Responsibility are getting some benefit, like a good public image, many of them are disadvantaged because of such social investments that some competitors do not support. Also, in the name of social responsibility, some multinational companies stopped their investments in poor countries where wages are very low. This is having a negative impact on those countries concerned that would have benefited from those investments. It is the aim of the business ethics discipline to study and propose what businesses ought to do and how they ought to behave. But I do think that it is the role of the governments to impose some basic moral principles and behaviours that must be respected by each and every business. Businessmen ought to behave morally but they will never all do so. A critical morality of moralities or a Metaethics has to be imposed by a higher institution governments- in order to guarantee the basis for equity. Conclusion In this work, different arguments for and against the 40-year old but still so famous statement of Milton Friedman that The Social Responsibility of Business is to Increase its Profits have been presented and discussed. The normative discourse stating how business ought to behave is for sure morally and ethically against this statement and its arguments will sound both moral and logical for any mind. However, reality is far from the moral ideal. In my opinion, it is the governments responsibility to impose a minimum ethical code to be respected by businesses and individuals to guarantee the equity of rights and advance the public interest.