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by forlorn_mammoth
10 days ago
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> the Friedman doctrine makes the argument that the social responsibility of the firm is to increase its profits. That policy making should be left to governments. > His theory was introduced in 1970 and it seems has since become the standard for the corporate world questions: WHY has it become the standard? Should it still be the standard-- the world has changed a lot since 1970, is the context that supported Friedman's arguments still true? Does this also mean corporations shouldn't try to shape government/public policy? Additional questions: "increase profits" over what timescale? PE has a reputation for increasing profits in the short term while killing the company over the medium term. Re social responsibility. Wasn't it Ford who helped realize that paying workers enough to let them buy your product increased your market size, thus increasing profits? Did Ford perhaps go too far in 'social policy' by requiring his employees to pass invasive inspections by his company's Sociological Department. Where to draw the line? |
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1. It coincidentally aligns with the interests of the C-suite. They are mostly compensated in stock, and compensation mostly set by other members of the C-suite elite. And gosh darn it wouldn't you know it, they all think it's a jolly good idea.
2. It is taught in B-school, so most of the C-suite believe it or have never thought seriously about its deeper meaning. "Shareholder value" is easy to mouth, but breaks down almost immediately after trivial scrutiny. Which shareholders, pray tell Mr Babbage? What is value to them? Are they just are hivemind with perfectly identical interests, opinions, attention span, background knowledge, experience, access to capital, prestige, ...?