Or, maybe, "Everybody is altruistic until they have shareholders."
The idea that companies should only be beholden to shareholders that has taken firm hold over the past 50(+/-) years doesn't look to be a good one, in hindsight.
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." - Adam Smith, 1776
I think Friedman's ideas are substantially different.
The quote from Smith is discussing tradesmen running a business in their own self interest.
In some ways, Friedman's point is the opposite. That the laborers perform in the self interest of the owner.
I don't know the full context of the Smith quote. I did a bit of digging for Smith's views on publicly traded companies, and came across this quote[0]:
>The directors of such [joint-stock] companies, however, being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.... Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.
Surely that’s exactly the same thing Friedmam was saying. According to Friedman managers spending company money on social causes are spending other people’s money, the same phrase Smith used, when they had no business doing so. In saying that the firms responsibility is to its owners, Friedman was addressing precisely the concern that Smith was worried about.
Of course in Smith’s time joint stock companies were a relative novelty. We have a lot more experience of them now and have developed standards, checks and balances to try to maintain discipline in managers in the intervening centuries. Friedman was simply attempting to bolster that effort, but Smith was writing about exactly the same concern.
As it happens while I’m a big fan of both men, on this issue I think Friedman is too much of a purist. Some social spending can just be good business. It promotes the brand, buys political friends and can even reap commercial benefits down the line. Donating or subsidising computers in schools for a company like Apple for example.
Smith had very few good things to say of joint-stock (shareholder-owned) corporations. They were comparatively scarce at the time. Most businesses of his time, including the "baker and butcher" line you quite, were sole proprietorships or family-owned and operated.
The interests he writes of are those of the butcher and baker to themselves. Not to their shareholders.
"Shareholder value" is a recent error attributed to Milton Friedman.
Psychology studies in the past showed people were altruistic. Then psychologist accounted for social capital/good will and worked to remove it from their altruism tests. People stopped being overly altruistic when it stopped benefitting them, likely meaning that what we see as altruism is really a failure to account for all the benefits a person expects to gain and all the negatives they expect to avoid when choosing to perform a certain action.
As for shareholders, I think that comes down to the incentive to avoid the negative outcome of being replaced. Those at the top optimize their actions to avoid being replaced which filters down through each level until it effects every level of a company. There is some variety that results from how a company chooses who to promote, but that is still an outcome of not wanting to be replaced. Promote people who you think will strengthen your own position and not those who will weaken it. This ends up being the primordial pool that spawns corporate culture.
The concept of altruism does not require it to be "pure" or entirely selfless. Altruism can have benefits but those benefits can exist outside of economy and into the realm of the personal, spiritual, social, etc.
In other words, that doesn't disprove altruism so much as it proves that economic self-interest is not our only motivator.
It's not some idea that came about from a vacuum. Put yourself in an investors shoes: you may have some investments that you do for the sake of charity or philanthropy, however, the majority of your investments are to increase your investment. It isn't surprising then, following this basic premise, that we have arrived at the current situation. Capitalism factors in greed for the general welfare of the most people. It just seems that we underestimated the upper bound of human greed.
It's not so much an underestimation as it is a systematic breakdown of constraints and personal responsibility for owners/directors of large corporations.
Sure there is. I don't know which motivation you'd have to bribe someone to promite your product, though. Would also be hard to sustain if intellectual property was decommodified.
Other, more pressing concerns have to be addressed, though.
Consider firms which are wholly owned by either 1) every single employee (worker-owned firm), 2) every employee and every customer who opts in (consumer co-op), or 3) literally every citizen of a government (publicly owned).
You own it in partnership with the other people who own it.
This is, in the strictest definition, the socialism that people are so scared of.
In the sense first and foremost that you may produce and design it, especially if production is structured in a co-op way, in the sense that you use it, especially if it's a consumer/worker co-op but also in a worker co-op, and to a lesser extent in that you are part of the society which produces it.
because there aren't luxuries in that system. that creates a need, and from it a secondary market, which without titles[1], sees the exchange of power either via favors exchange or plain tribalism. bribery then becomes the norm for the influential, even if actual money doesn't change hand, favors and contraband do.
1: a catch all to include both money, 'quota cards' and the likes
Socialism, like capitalism, also has a zero day vulnerability by the name of mundane old “human corruption” that undermines its goals. Capitalism just works better because it pits people against each other, keeping the focus off authority and top level control.
People thought of this issue since 1870 and the solution they came up with is simply non-transferable rationing devices. In traditional Marxist terms this was labour vouchers but nowadays there are much better solutions. Marx himself wrote about this, in terms of primitive accumulation in socialism.
For sure there are a lot of issues, but this isn't one of them.
You could in theory have bribery in material terms, but this is much easier to trace than in money terms.
My argument was with the idea that money will be gone as a rationing device. You can come up with alternatives but it’s the human nature that is the problem not the technology we use to ration resources. Let me know when this bug is fixed.
Well, that's not the problem we were talking about, is it? We were talking about the issue of bribery, which is made possible by the fungible nature of money.
I assume that this criticism is offered in good faith, and that you're in need of good, solid Wiki articles about the tens of millions of victims of Communist regimes--well, I'm happy to get you started!
Here's an article about the Soviet terror-famine (known as the Holodomor) which killed 4 million Ukranians. No worrisome notifications on this article, so I assume it meets your rigorous standards:
And here's one about the so-called 'Great Leap Forward', when the Chinese Communist Party's top-down modernization plans resulted in the accidental deaths of ~50 million human beings.
I'm not denying or excusing that historical atrocities occurred under socialist governments, but for perspective one should also look at the myriad atrocities that were and continue to be committed under capitalist governments. That doesn't excuse such actions, but neither side is innocent. I suggest reading The Wretched of the Earth* Chapter 1, "On Violence".
* Though I will object that it is unfair to attribute the actions of the Khmer Rouge to socialism. Like the Nazis they were socialist in name only, and in fact were supported by the United States in their war against the Socialist Republic of Vietnam.
The idea that companies should only be beholden to shareholders that has taken firm hold over the past 50(+/-) years doesn't look to be a good one, in hindsight.