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It is not the case that Shareholder primacy, as defended by Milton Friedman, already permits prosocial activity when it serves long-run profit maximization.
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Reasons For
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Reason for
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1.
The 'long-run profit' criterion is vague enough to justify almost anything, making the constraint philosophically hollow and unfalsifiable.
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2.
Friedman's framework still prioritizes profit over ethics; prosocial acts are merely instrumental means, not intrinsically valued goods.
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3.
In practice, short-term quarterly pressures and shareholder demands override genuine concern for prosocial outcomes despite theoretical allowance.
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Reasons Against
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Reason against
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1.
Friedman's doctrine permits any activity increasing shareholder value, including reputation-building through environmental or social initiatives.
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2.
Consumer demand for ethical products means prosocial behavior directly enhances long-term profitability and competitive advantage.
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3.
Risk mitigation through stakeholder trust reduces regulatory costs and operational disruptions, aligning ethics with financial returns.
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