Talk:Friedman doctrine
Latest comment: 1 year ago by Biogeographist in topic profits vs shareholder value
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Merge
editThis should be merged with stockholder theory. they are essentially the same thing Kylelovesyou (talk) 18:00, 20 May 2009 (UTC)
profits vs shareholder value
edit"the social responsibility of business is to increase its profits"
Should it not be shareholder value or share price? 138.51.91.146 (talk) 22:53, 5 July 2023 (UTC)
- No. Friedman uses the word "profit" in the eponymous article. He links "the corporation's profits and the price of its stock", but "profit" is the word he uses most. Biogeographist (talk) 17:17, 7 July 2023 (UTC)
- The reason I ask is because we learn in business school that the goal of a corporation is to increase shareholder value (eg market capitalization, launching projects with positive NPV). The article on shareholder value (https://en.wikipedia.org/wiki/Shareholder_value) also has mentions to the Friedman rule. But if he used "profits" in his article, then I guess that's the Friedman doctrine and he's just wrong there. After all, shareholders care about shareholder value, not necessarily profits.
- Also, the CFI Institute's article (https://corporatefinanceinstitute.com/resources/equities/friedman-doctrine/) uses both "profitability" and "shareholder value".
- Maybe Friedman was thinking about economic profit (https://en.wikipedia.org/wiki/Profit_(economics))? Then that would be equivalent to maximizing shareholder value. I have not read his article though. 209.171.85.237 (talk) 01:48, 8 July 2023 (UTC)
- There is a separate article on "shareholder primacy" that may correspond more precisely to what you're thinking about, and that article has a cleanup tag, so if you're familiar with Wikipedia's content policies and guidelines and have relevant knowledge, you could help improve it. Remember that Friedman's article was written for a popular audience, so it did not use technical terms, and it was written over 50 years ago. I wouldn't expect that what people learn in business school today corresponds exactly to what Friedman wrote in the NY Times 50 years ago! Biogeographist (talk) 21:48, 8 July 2023 (UTC)