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There are many types of corporations beyond those organized for profit. Non-profit corporations typically have different governance structures. Both types are

There are many types of corporations beyond those organized for profit. Non-profit corporations typically have different governance structures. Both types are restricted to pursue the aims and purposes described in their articles of incorporation. Labor unions are a good example of a non-profit corporation for example, as are credit unions, and most charitable organizations. Friedman's point is not so easily dispensed with by calling him names. He is arguing that a corporation that is formed for the purpose of generating profits for its shareholders is most effective when it focuses on that and then the dividends and capital gains generated for the shareholders can more effectively be applied by them to charitable enterprises as they see fit. That is not an excuse for a corporation to rape and pillage the countryside, break any law, or behave in an objectively unethical manner. It merely means a corporation should pursue the aims for which it was formed and is legally restricted to, and especially not be hijacked to pursue interests that its members or shareholders would not support. The latter is basically a form of theft, although the loss of focus usually takes milder forms.

college_physics 4y ago
> That is not an excuse for a corporation to rape and pillage the countryside, break any law, or behave in an objectively unethical manner. The problem is that the laws that are relevant in this context are far from a static body. They are in constant flux as new behaviors, new knowledge and new technologies are adopted. This necessitates continous new rule making and new regulations that must be fit-for-purpose. Shareholder profit maximization under current systems means it is rational (and a very profitable project) to proactively capture the political system. There is no meaningful penalty and eliminating the downside or creating more upside is enormously valuable (in monetary terms). Instead of rule takers that must optimize profit within their designated sandbox, giant private entities become the unchallenged rule makers. This is not intrinsically and automatically evil. It becomes so whenever the monetary profit of a narrow set is grossly misaligned with the welfare of broader segments of society. Examples abound. As they keep piling up they undermine the legitimacy of the very system. Killing the golden goose of a well governed market democracy and opening the door for uglier versions of society.

college_physics 4y ago

> That is not an excuse for a corporation to rape and pillage the countryside, break any law, or behave in an objectively unethical manner. The problem is that the laws that are relevant in this context are far from a static body. They are in constant flux as new behaviors, new knowledge and new technologies are adopted. This necessitates continous new rule making and new regulations that must be fit-for-purpose. Shareholder profit maximization under current systems means it is rational (and a very profitable project) to proactively capture the political system. There is no meaningful penalty and eliminating the downside or creating more upside is enormously valuable (in monetary terms). Instead of rule takers that must optimize profit within their designated sandbox, giant private entities become the unchallenged rule makers. This is not intrinsically and automatically evil. It becomes so whenever the monetary profit of a narrow set is grossly misaligned with the welfare of broader segments of society. Examples abound. As they keep piling up they undermine the legitimacy of the very system. Killing the golden goose of a well governed market democracy and opening the door for uglier versions of society.