Arthur, At 17:19 26/10/2009 -0400, you wrote:
Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. -- Milton FriedmanIt's the function of the corp. to make profits and pay taxes, it's the function of the govt. to set the ground rules of the game and use the taxes to meet social needs. Govts are elected; corporations are not. When corps begin to decide "social responsibility" then clearly they may have their own unelected agenda. When I buy Proctor and Gamble or Kellogs or Kraft products I really don't want them deciding social responsibility. Just turn out a quality product, pay taxes and treat the workers in a fair manner. The govt. can and should do the rest. So I agree with Milton.
Milton Friedman was right, insofar as he went in his analysis of corporations and a "free society". But he didn't go far enough because he entirely overlooked one of the principal reasons for the rapid take-off of the "free society" -- namely the limited liability corporation. In allowing these to develop legally in the early 19th century, Western governments insisted on public access (mainly in the interests of company shareholders in those days) to annual corporate accounts as a quid pro quo. Since then, shareholders have become stakeholders -- that is, all of us -- and annual accounts are plainly too infrequent (and opaque, sometimes fictional) in fast-changing times.
What happened also during the rest of the 19th century and all through the 20th is that the most ambitious young men increasingly sought careers in business and the most talented young men in scientific research (both of these being closely associated in the case of the larger corporations). From then onwards, politicians and civil servants began to lose the plot -- as Ed Weick observed from his own experience -- and corporations, not governments, increasingly make the most important economic decisions (both for good and ill). And these, increasingly, are decisions with world-wide consequences, not just national.
Note, however, that governance still has validity. Corporations, as well as individual citizens, still need a framework of just laws. We must also note that, by and large, business is leaving the robber baron phase behind and that corporate leaders increasingly reflect the values of the age, even though there are still get-rich-quickers and criminals among them. Also, even though governments have fallen down on the task of exposing the financial dealings of corporations and banks, financial specialists and journalists have been increasingly discerning.
A big drama is now being played out -- a huge re-balancing of governmental power as between major social components (including specialized pressure groups as well as business corporations). What's going on now between elected governments and corporations is equivalent to the re-balancing that took place in Western Europe from 1648 (Peace of Westphalia) and onwards when secular governments took over from religious government.
Keith
-----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Mike Spencer Sent: Monday, October 26, 2009 12:20 PM To: [email protected] Subject: [Futurework] Re: Well, it's a nice thought... > University of Ottawa MBAs swear oath in Canadian first > > by Glen Mcgregor, The Ottawa Citizen, October 26, 2009 > > OTTAWA: About two dozen masters of business administration graduates > stood together Sunday and recited an oath of ethics.... to conduct > their affairs ethically and work toward the well-being of all > stakeholders and not just their shareholders. Beth David Cemetary on line two, something about seismic activity and steam ventng around some grave or other, something Friedman I think they said. > The oath is entirely voluntarily and in no way binding on anyone who > takes it. Oh, well. That's alright then. No smiting off of hands or heaping with burning coals or forensic audits or anything like that. No problem. -Imafa Kinasso, Epist. Eng., MBA Scotia Center for Advanced Monetary Studies --- Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. -- Milton Friedman _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
Keith Hudson, Bath, England, <www.evolutionary-economics.org>, <<http://www.amazon.com/dp/1906557020/>www.amazon.com/dp/1906557020<http://www.amazon.com/dp/1906557020/>/>, <www.handlo.com>
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