“…Friedman is widely understood to be a liberal (see, e.g., Nunan ; Danley ; Carson ; Wolff ; Schaefer ; Zwolinski .) He describes himself as such in the introduction of Capitalism and Freedom : “it is extremely convenient to have a label for the political and economic viewpoint elaborated in this book.…”
Section: Friedman's Shareholder Model and His Rejection Of Corporate mentioning
confidence: 99%
“…The ultimate justification for limited liability in torts is efficiency; it is understood as being the system that overall delivers the best consequences. In many of his writings, Friedman makes it clear that he is a consequentialist (Danley ). For example, in a 1978 article in Newsweek , he says:Capitalism, socialism?…”
Milton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business. Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman's position, nevertheless, has retained currency among many business thinkers. In this paper we argue that Friedman's economic writings assume an economy in which businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To restore consistency to his economic principles, Friedman must refuse limited liability or modify his doctrine on CSR and the related stakeholder model of business.
Ignacio
AbstractMilton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business. Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman's position, nevertheless, has retained currency among many business thinkers. In this paper we argue that Friedman's economic writings assume an economy in which businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To restore consistency to his economic There have been attempts by various scholars to interpret Milton Friedman's shareholder model in a way that brings it closer to the idea of corporate social responsibility and the stakeholder model most widely associated with Edward Freeman. Indeed, in a recent article, Freeman "welcomed Friedman to the big tent of stakeholder theorists" because, as Freeman sees it, creating value for stakeholders is the way to maximize profits (2008, 166). However, as we see it, rather than bringing Friedman into the stakeholder theory tent, Freeman's argument preserves the core of Friedman's shareholder model by putting emphasis on profit maximization for shareholders, while allowing for concern for other stakeholders' interests only insofar as they serve the instrumental purpose of supporting shareholder interests. This view falls far afield of stakeholder theory. However, we think there is another way to move Friedman's shareholder model to Freeman's stakeholder model, and that is to recognize in Friedman's position an internal contradiction, ...
“…Friedman is widely understood to be a liberal (see, e.g., Nunan ; Danley ; Carson ; Wolff ; Schaefer ; Zwolinski .) He describes himself as such in the introduction of Capitalism and Freedom : “it is extremely convenient to have a label for the political and economic viewpoint elaborated in this book.…”
Section: Friedman's Shareholder Model and His Rejection Of Corporate mentioning
confidence: 99%
“…The ultimate justification for limited liability in torts is efficiency; it is understood as being the system that overall delivers the best consequences. In many of his writings, Friedman makes it clear that he is a consequentialist (Danley ). For example, in a 1978 article in Newsweek , he says:Capitalism, socialism?…”
Milton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business. Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman's position, nevertheless, has retained currency among many business thinkers. In this paper we argue that Friedman's economic writings assume an economy in which businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To restore consistency to his economic principles, Friedman must refuse limited liability or modify his doctrine on CSR and the related stakeholder model of business.
Ignacio
AbstractMilton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business. Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman's position, nevertheless, has retained currency among many business thinkers. In this paper we argue that Friedman's economic writings assume an economy in which businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To restore consistency to his economic There have been attempts by various scholars to interpret Milton Friedman's shareholder model in a way that brings it closer to the idea of corporate social responsibility and the stakeholder model most widely associated with Edward Freeman. Indeed, in a recent article, Freeman "welcomed Friedman to the big tent of stakeholder theorists" because, as Freeman sees it, creating value for stakeholders is the way to maximize profits (2008, 166). However, as we see it, rather than bringing Friedman into the stakeholder theory tent, Freeman's argument preserves the core of Friedman's shareholder model by putting emphasis on profit maximization for shareholders, while allowing for concern for other stakeholders' interests only insofar as they serve the instrumental purpose of supporting shareholder interests. This view falls far afield of stakeholder theory. However, we think there is another way to move Friedman's shareholder model to Freeman's stakeholder model, and that is to recognize in Friedman's position an internal contradiction, ...
“…Friedman is an heir of Comte's vision including the moral implications of the grandiose scheme he fashioned in his mind. While Friedman's extremely attenuated prescription for CSR has been examined on a proximate level (Carson, 1993;Danley, 1991;Gallagher, 2005;Grant, 1991;Koehn, 1996;Lee and McKenzie, 1994;Liechty, 1985;Marsden, 2005;McAleer, 2003;Mulligan, 1986Mulligan, , 1990Nunan, 1988;Wilcke, 2004), little consideration has been given to the ontological basis for it.…”
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