First, Friedman in praise of greed or “economic self interest”.*
Oliver Hart and Luigi Zingales on what Friedman and his fellow free market true believers got and get wrong:
“. . . the conclusion is that this idea, which seems to have taken hold that companies should be all about making money and that indeed managers, the CEO, they have a fiduciary duty to their shareholders to be concerned only with the bottom line. We think this is wrong — a serious mistake. Actually if they want to act — be loyal to their shareholders — which is what fiduciary duty means, they should actually ask them what they want. That’s the loyal thing to do. Rather than just assume that it’s making money at the expense of all else.
* Seriously underrated. . . Phil Donahue’s hair.
I know, I know, I know, most over-reported story of the year. But there’s one element of the story still deserving of attention. Allegedly U.S. Brewery Distributor execs were very upset that the beers of choice were produced by foreign owned companies. One was heard asking, “What does this phrase ‘globalization’ of which you speak mean?”
Now, picture these execs sitting in a country club restaurant after 18 holes of golf. I’m going to go be presumptuous and guess that as well-to-do business executives they’re pro free market, pro capitalism, pro Milton Friedman. But when the invisible hand slaps them in the face and foreign competitors erode their market share, they whine and seemingly seek privileged status.
Why is it that U.S. business execs sing the praises of free markets until they end up getting their asses handed to them by foreign competitors?