As the pandemic, fires, and inequity all rage, free market icon Milton Friedman’s declaration that the sole responsibility of business ‘is to increase its profits’ sounds emptier than ever







Milton Friedman wearing a suit and tie: Milton Friedman spearheaded shareholder primacy economics. Jon Hargest/South China Morning Post via Getty Images


© Jon Hargest/South China Morning Post via Getty Images
Milton Friedman spearheaded shareholder primacy economics. Jon Hargest/South China Morning Post via Getty Images

  • In 1970, Milton Friedman wrote an influential essay in The New York Times Magazine declaring the primary purpose of a company is to maximize profits for its shareholders.
  • He disagreed that businesses had any responsibility to provide employment, eliminate discrimination, or avoid pollution, among other ‘catchwords of the contemporary crop of reformers.’
  • From regular media appearances to advising President Ronald Reagan, Friedman’s influence cannot be understated. Waves of financial deregulation in the ‘70s and ‘80s followed his famous essay.
  • Today, amid rising inequality, massive fires in California, and calls for racial justice, Friedman’s theory of shareholder primacy seems more out of touch than ever before.
  • More Americans and business leaders are calling for a shift in mindset toward stakeholder capitalism, which dictates that companies are responsible to
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