The Contest on Corporate Purpose: Why Lynn Stout was Right and Milton Friedman was Wrong
Why this work is in the frame
A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.
Bibliographic record
Abstract
Abstract It is now 50 years since Milton Friedman set out his doctrine that “The Social Responsibility of Business Is to Increase Its Profits.” This paper seeks to add fresh and compelling new evidence of why Lynn Stout was correct in her resolute critique of the thesis of shareholder primacy at the heart of the Friedman doctrine, and how this doctrine remains profoundly damaging to the corporations that continue to uphold this belief. It is argued that the Friedman doctrine has had a catastrophic impact upon American business and society beginning with General Motors failure to respond to investor calls for increased concern for safety and pollution at the time of Friedman’s intervention in 1970, stretching all the way to the recent fatal errors of Boeing in placing a higher priority in getting the new Boeing 737 MAX into the market than ensuring the soundness of software controls on the flight deck which led to two horrific plane crashes in 2018 and 2019 with the loss of 346 lives. These tragic errors in corporate judgement are ultimately related to the constricted sense of corporate purpose imposed by Milton Friedman and taken up with enthusiasm by agency theorists focused upon maximising shareholder value. This reckless single-mindedness has privileged the pursuit of the narrowest of financial measures of performance above fundamentals including passenger safety and environmental emissions controls. As a result, innocent lives have been lost, brands have been tarnished, and ultimately the strategic future of significant corporations endangered, and the ecology of the planet imperilled. There is now emerging a new sense of the purpose of the corporation that defines a rationale for corporate social and environmental responsibility in a way similar to Lynn Stout’s more inclusive stakeholder approach. The question remains open whether this will lead to the development of fiduciary duties, governance, strategies, targets, measures, transparency and disclosure that might deliver the sustainable corporation.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.001 | 0.000 |
| Scholarly communication | 0.001 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it