Moral Agency, Profits and the Firm: Economic Revisions to the Friedman Theorem

Journal of Business Ethics 70 (2):209-220 (2007)

Abstract
The paper reconstructs in economic terms Friedman's theorem that the only social responsibility of firms is to increase their profits while staying within legal and ethical rules. A model of three levels of moral conduct is attributed to the firm: (1) self-interested engagement in the market process itself, which reflects according to classical and neoclassical economics an ethical ideal; (2) the obeying of the "rules of the game," largely legal ones; and (3) the creation of ethical capital, which allows moral conduct to enter the market process beyond the rules of the game. Points (1) and (2) position the Friedman theorem in economic terms while point (3) develops an economic revision of the theorem, which was not seen by Friedman. Implications are spelled out for an instrumental stakeholder theory of the firm
Keywords active/passice moral agency  economic analysis  ethical capital  Friedman theorem  three levels of moral agency  Stakeholder theory
Categories (categorize this paper)
DOI 10.1007/s10551-006-9106-5
Options
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

Our Archive


Upload a copy of this paper     Check publisher's policy     Papers currently archived: 47,201
Through your library

References found in this work BETA

Capitalism and Freedom.Milton Friedman - 1963 - Ethics 74 (1):70-72.
Business Ethics and Stakeholder Analysis.Kenneth E. Goodpaster - 1991 - Business Ethics Quarterly 1 (1):53-73.
Essays in Positive Economics.Milton Friedman - 1953 - University of Chicago Press.
The Constitution of Liberty.Friedrich Hayek - 1998 - Law and Philosophy 17 (1):77-109.

View all 19 references / Add more references

Citations of this work BETA

Transparency Rights, Technology, and Trust.John Elia - 2009 - Ethics and Information Technology 11 (2):145-153.

View all 15 citations / Add more citations

Similar books and articles

Toward the Feminine Firm: An Extension to Thomas White.John Dobson & Judith White - 1995 - Business Ethics Quarterly 5 (3):463-478.
Toward the Feminine Firm: An Extension to Thomas White.John Dobson & Judith White - 1995 - Business Ethics Quarterly 5 (3):463-478.
Interpreting Friedman's View of Business.Darlene O'Leary - 2004 - Journal of Macrodynamic Analysis 4:40-52.
Firms, Agency, and Evolution.Armin W. Schulz - 2016 - Journal of Economic Methodology 23 (1):57-76.
The Corporation and Profits.David E. Schrader - 1987 - Journal of Business Ethics 6 (8):589 - 601.
Managing Business Ethics and Opportunity Costs.Patrick Primeaux & John Stieber - 1997 - Journal of Business Ethics 16 (8):835-842.
Moral Agency in Other Animals.Paul Shapiro - 2006 - Theoretical Medicine and Bioethics 27 (4):357-373.

Analytics

Added to PP index
2009-01-28

Total views
46 ( #195,822 of 2,289,671 )

Recent downloads (6 months)
3 ( #405,855 of 2,289,671 )

How can I increase my downloads?

Downloads

My notes

Sign in to use this feature