We followed up with Stiglitz after the Davos panel, and he told us that Friedman's assertion "was not based on any economic theory." He then gave some background on the origins of this debate. In his highly influential 1962 collection of essays, " Capitalism and Freedom," Friedman proclaimed that in a free economy, "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud."
When Blodget opened the discussion to the panel he had assembled, Columbia University's Joseph Stiglitz remarked, "I want to emphasize that it was, in this period, not only activist shareholders but Milton Friedman," the late economist and fellow Nobel laureate, who was to blame for this prevailing ideology. The current state of inequality in the United States, he explained, is largely linked to a reaction to 1970s stagnation that has gone on for too long, where chasing quarterly profits has resulted in a toxic short-termism. It often indicates a user profile.Īt the World Economic Forum's annual meeting in Davos, Switzerland in January, Business Insider CEO Henry Blodget made the case why it's time for a "better capitalism." Account icon An icon in the shape of a person's head and shoulders.
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