Under this approach, any taxation for reasons other than policing the free market would be considered to be an unethical interference in the economy. Many agencies would simply disappear, including those involved in regulating education, unemployment compensation, social security, health care, environmental impacts, and pollution control. Even government agencies involved in promoting economic growth would be rejected if we accept Friedman's arguments. Clearly, this radical approach would not be acceptable to the majority of citizens in a functioning democratic society.
Secondly, regarding Friedman's "tax argument" Desjardins and McCall point out that the word "tax" often carries with it a negative emotional charge and that rational argument is better served by adopting the more neutral terminology of "costs." All expenditures, including those made solely for profit versus social or environmental reasons, involve costs to some individuals and benefits to others. It is up to the corporate manager to decide on the best expenditures, given the goals of the company, based on some form of cost-benefit analysis. .
Take the example of a multinational mining company discharging toxic effluent into a stream in the Philippines, poisoning fish stocks, along with the strong possibility that it will impact the health of people downstream. Suppose that the discharge could be eliminated by making expenditures that lowered the company's profits - at a cost to company shareholders - but did not threaten the firm's economic viability. Would a company manager who subscribed to Friedman's extreme libertarian views assume the responsibility to stop the discharge if no laws were being broken? Likely not, even though there would still be a heavy cost to bear externalised by the company to the members of the community (both ecological and human).
Desjardins and McCall make a further, important point: [16] .