Abstract
When asked to choose their public enemy number one, most advocates of stakeholder capitalism would almost certainly choose Milton Friedman. He definitely would have been my choice but, after reading this collection of short newspaper style columns on Friedman, I am not so sure. I also now believe many other macromarketers would benefit from revisiting Friedman and his thinking a half a century or so after the publication of that truly seminal New York Times piece, “A Friedman Doctrine-The Social Responsibility of Business is to Increase its Profits”.
“Milton Friedman-50 Years Later” is a collection of columns written from many different perspectives that first appeared in Promarket, a publication of the Stigler Center at the University of Chicago’s Booth School of Business. That affiliation in itself was initially of some concern to this old macromarketer who many decades past, six of them in fact, had received a Ph.D in Applied Economics-Keynesian style. (You could not get a Ph.D in Marketing, even from the Wharton School, that far back in time.) The Chicago School of Economics in general and Milton Friedman in particular, were, to say the least, not favorably viewed in Keynesian circles. In the decades that followed Friedman has become nothing short of a demigod to those who came to worship at the alter of free markets and who still question Corporate Social Responsibility. To those who hold directly opposing views, he is often considered the Devil incarnate
All that notwithstanding, or perhaps because of it, I agreed, indeed I even volunteered, to review this book shortly after Marilyn Liebrenz, this journal’s long time Book Review Editor, forwarded it to me. But even then I had my doubts. How out of character I thought, a book on Milton Friedman being distributed online, “free of charge” no less, by the University of Chicago! What are they trying to sell now? One hundred and forty seven pages (including a few of those with pictures) and 28 short articles later, I realized I had been far too quick to judge, all too ready to stereotype.
As mentioned above, this short book is a collection of relatively brief articles, some of which reference journal publications but none of which would qualify as such. A significant number, but by no means all, of the contributors had or still have a Booth School, University of Chicago, affiliation. Viewed as a group, they are a most impressive set of scholars, primarily from economics but with contributions from other disciplines (but not marketing) as well. One starts reading through this collection expecting the focus to be on the marked differences between and the relative merits of shareholder as opposed to stakeholder capitalism. This is indeed what one finds but presented with a range and richness that demonstrates all the complexities of what at first appears, and what many still consider, a relatively simple either-or choice.
A number of authors collectively make it clear that the Friedman Doctrine was built on the premise that the executives and corporations that should be solely devoted to maximizing shareholder profits must still play within the rules of the game. That is to say, in Friedman’s own words, “engage in open and free competition without deception or fraud”. But what does one do when economically powerful corporations either refuse to play by the rules of that game or use their political influence to change those rules, some thing another contributor argues has been happening with ever increasing frequency since the early 1980s? Then there is the more optimistic contribution which argues that looking at shareholder profit maximization through a long enough lens provides all the justification shareholder maximizers require, and then some, for spending to meet the needs of other stakeholders. But which needs and how much?
Others argued the case for corporations adopting a stakeholder perspective, especially in a world very different from that of the 1960s. The benefits of doing so are spelled out but so are the difficulties, especially when stakeholder interests clash one with another? Closing a coal mine, for example, cleans the air but costs jobs. Relocating plants from the US Midwest to the Southeast benefits some workers and communities but at the expense of others. A later section of this book does an excellent job of spelling out the conceptual weaknesses and operational difficulties one encounters when closely examining stakeholder capitalism.
Free, brief, focused, and well argued by qualified advocates of different positions, what more could one ask? Also, of course, the topic is of obvious relevance to students in Business and Society classes, whatever their chosen discipline. But what would be the best pedagogical use of this type of material as opposed to the more traditional journal article or book excerpt? Their relative brevity makes assigning related columns an excellent way of adding a more contemporary dimension or perspective to classic but now somewhat dated journal articles. (I find students not all that receptive to articles written before they were born.) This type of material would also be of great value whenever instructors were choosing to use a “controversies-based” approach to teaching Business Ethics or Marketing & Society. Students in such classes are often asked to express their own views on the relative merits of shareholder as opposed to stakeholder maximization. In those courses, columns from this book taking directly conflicting positions would make ideal assigned readings.
Of course, Friedman and various dimensions of his Doctrine have repeatedly been commented upon over the decades, and with increasing frequency as this fiftieth anniversary year approached. A brief visit to Google Scholar will bring you, as it did me, to a near flood of such material. However, from a macromarketing perspective, one of these articles seems especially relevant, indeed almost seminal. Bagha and macromarketing titan Gene Laczniak begin by comparing in some detail what both the equally misinterpreted Adam Smith and Milton Friedman really argued with how, all too often, business men and scholars incorrectly draw upon their ideas. Within this context the authors then move on to explore what the relationship should be between “the best economy in terms of efficiency and the common good for society”. (Bagha and Laczniak 2015). This is another great pedagogical source but one perhaps more suited for advanced courses while the current collection of Promarket columns is useable at any academic level. But even without any pressing pedagogical need, and assuming you are open minded enough, this collection deserves your attention, and sooner rather than later.
