The Libertarian Conception of Corporate Property: A Critique of Milton Friedman's Views on the Social Responsibility of Business
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 7 (12):891 - 906 (1988)
A critique of Milton Friedman's thesis that corporate executives have a fiduciary responsibility not to pursue socially desirable goals at the expense of profitability. The author argues that even under a libertarian conception of the nature of corporate property, Friedman's thesis does not follow. In particular, an executive's decision to prize "socially responsible behavior" above profit maximization does not necessarily violate the contractual rights of dissenting stockholders. Whether executives have obligations to refrain from such behavior depends entirely on the content of the contract which actually exists between stockholders and executives. After an examination of the body of legal precedent which informs the content of that contract, the author concludes that there are clearly recognizable circumstances in which executives may legitimately pursue corporate altruism at the expense of profits, stockholder protestations notwithstanding. Since this contractual relationship with management is one in which stockholders have voluntarily engaged, libertarians have no grounds for complaining that the behavior of such executives constitutes a form of theft of the stockholders' property.
|Keywords||No keywords specified (fix it)|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Jim Wishloff (2009). The Land of Realism and the Shipwreck of Idea-Ism: Thomas Aquinas and Milton Friedman on the Social Responsibilities of Business. [REVIEW] Journal of Business Ethics 85 (2):137 - 155.
Ned Dobos (2011). Non-Libertarianism and Shareholder Theory: A Reply to Schaefer. [REVIEW] Journal of Business Ethics 98 (2):273 - 279.
Dominic Martin (2013). The Contained-Rivalry Requirement and a 'Triple Feature' Program for Business Ethics. Journal of Business Ethics 115 (1):167-182.
Ignacio Ferrero, W. Michael Hoffman & Robert E. McNulty (2014). Must Milton Friedman Embrace Stakeholder Theory? Business and Society Review 119 (1):37-59.
Similar books and articles
Bill Shaw (1988). A Reply to Thomas Mulligan's “Critique of Milton Friedman's Essay 'the Social Responsibility of Business to Increase its Profits'”. Journal of Business Ethics 7 (7):537 - 543.
Dwight R. Lee & Richard B. McKenzie (1994). Corporate Failure as a Means to Corporate Responsibility. Journal of Business Ethics 13 (12):969 - 978.
Daryl Koehn (1996). The Ethics of Business: Moving Beyond Legalism. Ethics and Behavior 6 (1):1 – 16.
Richard J. Klonoski (1986). The Moral Responsibilities of Stockholders. Journal of Business Ethics 5 (5):385 - 390.
Robert Larmer (1996). Corporate Executives: Disasters and Moral Responsibility. [REVIEW] Journal of Business Ethics 15 (7):785 - 788.
Thomas Mulligan (1986). A Critique of Milton Friedman's Essay 'the Social Responsibility of Business is to Increase its Profits'. Journal of Business Ethics 5 (4):265 - 269.
Eric Palmer (2007). Corporate Responsibility and Freedom. International Corporate Responsibility Series 3:25-33.
Brian P. Schaefer (2008). Shareholders and Social Responsibility. Journal of Business Ethics 81 (2):297 - 312.
Eric Palmer (2006). Legitimate Social Demands on Corporations. Proceedings of the International Association for Business and Society 17:151-154.
Ivar Kolstad (2007). Why Firms Should Not Always Maximize Profits. Journal of Business Ethics 76 (2):137 - 145.
John D. Bishop (1991). The Moral Responsibility of Corporate Executives for Disasters. Journal of Business Ethics 10 (5):377 - 383.
Larry May (1986). Corporate Property Rights. Journal of Business Ethics 5 (3):225 - 232.
Maria Lai-Ling Lam (2007). A Study of the Transfer of Corporate Social Responsibility From Well-Established Foreign Multinational Enterprises to Chinese Subsidiaries. International Corporate Responsibility Series 3:343-363.
Arun A. Iyer (2006). The Missing Dynamic: Corporations, Individuals and Contracts. [REVIEW] Journal of Business Ethics 67 (4):393 - 406.
Added to index2011-05-29
Total downloads20 ( #83,657 of 1,099,037 )
Recent downloads (6 months)1 ( #287,293 of 1,099,037 )
How can I increase my downloads?