Nobel Prize-winning economist Milton Friedman shaped the course of history with his strong focus on free markets and economic growth through business leadership focused on creating shareholder value. His model has proved so powerful that few dispute it today, and it has unquestionably created financial wealth. But the expansion of corporate power that it propelled has also led to major changes in the “rules of the game” for competition over the last 60 years in arenas from accounting to tax, banking, telecommunications, digital technology, pharmaceuticals, energy, and antitrust. In aggregate, these changes in the rules have tended to decouple financial performance from the underlying value to society that Friedman’s philosophy was intended to create. There has been heated debate over this quote since the Business Roundtable pivoted to “stakeholder capitalism” in its August 2019 revised “Statement on the Purpose of a Corporation.”
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