At the base of Friedman's article is a contradiction. If markets worked anything like as well as he thinks they do, then corporations would have no choice but to prioritize shareholder profits and there would be no reason for F to write his article. The very fact he thinks it is necessary to scold them for not doing so, is an admission of basic market failure - that corporations have leeway from market forces to act politically/socially and that non-market constrained action is what is driving market prices.
What Friedman is essentially arguing is that corporations should self-regulate in the direction of what he thinks is the "social good." But profit-seeking is only a social good if constrained by the market, and not by some person's judgment about society's (or shareholders) political and economic good and what prices should be. There is no reason to think corporate CEO's unconstrained by markets, have nay idea what prices should be than any communist politburo. So the whole thing is self-contradictory.
Though he does not say as much, it is not clear why Friedman wouldn't be in favor of government legally requiring corporations to maximize shareholder interests, which would entail that governments have to intervene to do the job of markets.
Even then, the notion of shareholder interests is meaningless if it is not determined by prices set by efficient markets. Indeed, if shareholders cannot constrain corporations to pursue their interests, or if they are too disorganized, unconcerned or unsure what those interests are to do so, then in what sense do we have a free market economy with the virtues F ascribes to it?
This is exactly the point I made and I literally had a section in here originally saying that it’s contradictory. Ultimately corporations exist within society and he says that their standard social and ethical considerations. It’s really that he believes in a specific type of ethics
At the base of Friedman's article is a contradiction. If markets worked anything like as well as he thinks they do, then corporations would have no choice but to prioritize shareholder profits and there would be no reason for F to write his article. The very fact he thinks it is necessary to scold them for not doing so, is an admission of basic market failure - that corporations have leeway from market forces to act politically/socially and that non-market constrained action is what is driving market prices.
What Friedman is essentially arguing is that corporations should self-regulate in the direction of what he thinks is the "social good." But profit-seeking is only a social good if constrained by the market, and not by some person's judgment about society's (or shareholders) political and economic good and what prices should be. There is no reason to think corporate CEO's unconstrained by markets, have nay idea what prices should be than any communist politburo. So the whole thing is self-contradictory.
Though he does not say as much, it is not clear why Friedman wouldn't be in favor of government legally requiring corporations to maximize shareholder interests, which would entail that governments have to intervene to do the job of markets.
Even then, the notion of shareholder interests is meaningless if it is not determined by prices set by efficient markets. Indeed, if shareholders cannot constrain corporations to pursue their interests, or if they are too disorganized, unconcerned or unsure what those interests are to do so, then in what sense do we have a free market economy with the virtues F ascribes to it?
This is exactly the point I made and I literally had a section in here originally saying that it’s contradictory. Ultimately corporations exist within society and he says that their standard social and ethical considerations. It’s really that he believes in a specific type of ethics