planet and putting in its pockets is forgetting to
show respect to its proper Yodas. The wise people
who tell/told neo-libs what to do with the planet. like
Aynus Rand and Milton Friedman.
They are supposed to make gods, or angels or something
out of those two because they filled the minds of
f^&*king *ssholes with that can-do feeling, so that
they could steamroll over democracies.
more soon
checkit: Forbes
Steve
Denning, Contributor
6/26/2013
@ 11:37AM |18,556 views
The
Origin of 'The World's Dumbest Idea': Milton Friedman
No
popular idea ever has a single origin. But the idea that the sole purpose of a
firm is to make money for its shareholders got going in a major way with an
article by Milton Friedman in the New
York Times on September 13, 1970.
As
the leader of the Chicago school of economics, and the winner of Nobel Prize in Economics in 1976, Friedman has been
described by The Economist as “the most
influential economist of the second half of the 20th century…possibly of all of
it”. The impact of the NYT article contributed to George Will calling him
“the most consequential public intellectual of the 20th century.”
Friedman’s
article was ferocious. Any business executives who pursued a goal other than
making money were, he said, “unwitting puppets of the intellectual forces that
have been undermining the basis of a free society these past decades.” They
were guilty of “analytical looseness and lack of rigor.” They had even turned
themselves into “unelected government officials” who were illegally taxing
employers and customers.
How
did the Nobel-prize winner arrive at these conclusions? It’s curious that a
paper which accuses others of
“analytical looseness and lack of rigor” assumes its conclusion before it
begins. “In a free-enterprise, private-property system,” the article
states flatly at the outset as an obvious
truth requiring no justification or proof, “a corporate executive is an
employee of the owners of the business,” namely the shareholders.
Come
again?
If
anyone familiar with even the rudiments
of the law were to be asked whether a corporate
executive is an employee of the shareholders, the answer would be: clearly not.
The executive is an employee of the
corporation.
An
organization is a mere legal fiction
But
in the magical world conjured up in this article, an organization is a mere
“legal fiction”, which the article
simply ignores in order to prove the pre-determined conclusion. The
executive “has direct responsibility to his employers.” i.e. the shareholders.
“That responsibility is to conduct the business in accordance with their
desires, which generally will be to make as much money as possible while
conforming to the basic rules of the society, both those embodied in law and
those embodied in ethical custom.“
What’s
interesting is that while the article jettisons
one legal reality—the corporation—as a mere legal fiction, it rests its entire
argument on another legal reality—the law of agency—as the foundation for
the conclusions. The article thus picks and chooses which parts of legal reality are mere “legal fictions” to be
ignored and which parts are “rock-solid foundations” for public policy. The
choice depends on the predetermined conclusion that is sought to be proved.
A
corporate executive who devotes any money for any general social interest
would, the article argues, “be spending someone else’s money… Insofar as his
actions in accord with his ‘social responsibility’ reduce returns to stockholders,
he is spending their money.”
How
did the corporation’s money somehow become the shareholder’s money? Simple.
That is the article’s starting assumption. By assuming away the existence of
the corporation as a mere “legal fiction”, hey presto! the corporation’s money magically becomes the stockholders’ money.
