The Destruction of our World and the lies of Milton Friedman
- Kamran Mofid
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“The Social Responsibility of Business is to Increase Its Profits, whilst the businesses' sole purpose is to generate profit for shareholders”- Milton Friedman, Nobel Memorial Prize in Economic Sciences
"The only reliable, durable and perpetual guarantor of independence is profit" – James Murdoch, Chief, News Corp
“The only reliable, durable and perpetual guarantor of independence is not profit, nor who you know. It is integrity”— Mark Thompson, Director General, the BBC
The truth about shareholder primacy
It is time for business leaders to move away from Milton Friedman's target of short term shareholder gain towards long term sustainability, says Paul Polman, the chief executive of Unilever.
“Paul Polman, the chief executive of consumer goods giant Unilever, is in a league of his own when it comes to being the leader a multinational company challenging the corporate status quo. In a wide-ranging interview with Guardian Sustainable Business to coincide with the first annual update of the company's ambitious 10-year Sustainable Living Plan, Polman calls on business leaders, politicians and NGOs to embrace systems thinking, and to recognise they cannot deal with the world's environmental and social challenges in isolation.”
Reflecting on this interview, Gordon Pearson, the author of “The Road to Co-operation”, notes the following:
“Much of the totally unsustainable impoverishment faced today springs from that one simple untruth: the reckless depletion of finite resources, pollution of atmosphere and oceans, predatory activity of an unregulated financial sector, and the destruction of the real economy which provides real jobs as well as paying for education, health, defence and social security. All this destruction on the altar of shareholder wealth maximisation, is mirrored by the excessive bonuses and executive remuneration that are part of the daily news. No wonder, in his BBC lecture, Barclays CEO Bob Diamond lovingly claimed Milton Friedman to be his 'favourite economist'!
It is to be hoped that more will follow Polman's bold lead away from short term shareholder gain towards long term sustainability. But many firms are not strong enough to swim against the tide.
Friedman's agency lie has to be exposed and demolished. And Polman's alternative enabled to become the new orthodox wisdom.”