Economics Questions

Re: Friedman on corporate responsibility

Torsten — Thu, 25 Feb 2010 21:18:39 GMT

Merlin:
A system which doesn’t make it utility-enhancing to abide by common law is utopian. All my hope for anarchy is most people’s utilities would be maximized by abiding by “the laws” under anarchism. Hence, that is implicit in the rephrasing.

Or the other way round: There will be some penalties for not obeying the law. Good laws or rules are in the end utility enhancing, because they set norms that make labour, entrepreneurship, exchange, ownership etc. worthwhile. So while laws (and penalties) against fraud and theft, prevent some people form gaining a quick advantage. They ensure prosperity in the long run. More confidence in people abiding by the rules, means less control constraints in conducting ones business.

Re: Friedman on corporate responsibility

Merlin — Tue, 23 Feb 2010 13:39:02 GMT

Torsten:

Merlin:
I would rephrase Friedman as such: “ The firm has only one responsibility: maximize the owner’s utility”.

What about a responsibility to comply with common laws and certain social norms?

A system which doesn’t make it utility-enhancing to abide by common law is utopian. All my hope for anarchy is most people’s utilities would be maximized by abiding by “the laws” under anarchism. Hence, that is implicit in the rephrasing.

Re: Friedman on corporate responsibility

Torsten — Tue, 23 Feb 2010 13:14:31 GMT

Merlin:
I would rephrase Friedman as such: “ The firm has only one responsibility: maximize the owner’s utility”.

What about a responsibility to comply with common laws and certain social norms?

Re: Friedman on corporate responsibility

Merlin — Tue, 23 Feb 2010 11:51:17 GMT

I'm sorry if that sounded like sarcasm. I just was sincerely pleased by your post.

Re: Friedman on corporate responsibility

Hard Rain — Tue, 23 Feb 2010 11:40:54 GMT

Merlin:

Hard Rain:

Mackey was on John Stossel's show recently and remarked that all the hullabaloo and publicity about boycotting Whole Foods had actually increased their customer base

Wow, I sure hope I’ll be able to bribe my government into calling for a boycott against my company.

Eh?

Re: Friedman on corporate responsibility

Merlin — Tue, 23 Feb 2010 11:37:49 GMT

Hard Rain:

Mackey was on John Stossel's show recently and remarked that all the hullabaloo and publicity about boycotting Whole Foods had actually increased their customer base

Wow, I sure hope I’ll be able to bribe my government into calling for a boycott against my company.

Re: Friedman on corporate responsibility

Hard Rain — Tue, 23 Feb 2010 11:14:43 GMT

JAlanKatz:

1. Regarding Whole Foods - The typical Whole Foods customer is very liberal. John Mackey regularly writes columns or appears on tv to speak out against nationalized healthcare, and to promote free-market ideas. The reaction is typically a boycott. Now, as libertarians, we tend to think that Mackey is right to speak out for the free market. Would Friedman's ideas mean that Mackey is actually wrong to do so, since his responsibility is to increase profit?

Mackey was on John Stossel's show recently and remarked that all the hullabaloo and publicity about boycotting Whole Foods had actually increased their customer base

Re: Friedman on corporate responsibility

Merlin — Tue, 23 Feb 2010 10:54:53 GMT

I would rephrase Friedman as such: “ The firm has only one responsibility: maximize the owner’s utility”.

Re: Friedman on corporate responsibility

Sage — Tue, 23 Feb 2010 10:12:12 GMT

I recall Long has a critique of Friedman on this here.

Friedman on corporate responsibility

JAlanKatz — Tue, 23 Feb 2010 05:16:12 GMT

A couple of thoughts have occurred to me recently regarding Friedman's view of corporate responsibility - that the responsibility of corporate officers is to stockholders, to turn a profit and maximize share price:

1. Regarding Whole Foods - The typical Whole Foods customer is very liberal. John Mackey regularly writes columns or appears on tv to speak out against nationalized healthcare, and to promote free-market ideas. The reaction is typically a boycott. Now, as libertarians, we tend to think that Mackey is right to speak out for the free market. Would Friedman's ideas mean that Mackey is actually wrong to do so, since his responsibility is to increase profit?

2. Bailouts - We would tend to cheer for a firm that refuses bailouts. Does Friedman's idea suggest that such a firm is actually doing the wrong thing? Are its corporate officers illegitimately being morally pure at the expense of shareholders?