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
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- 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