Being Done With Milton Friedman

Robé, Jean-Philippe

doi:10.1515/2152-2820.1047

Cited by 23 publications

(22 citation statements)

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“…Although the majority of neoclassical and liberal economists, and indeed most of the critiques of neoclassical economics, did not see this as a significant departure, we believe that 67 In a famous article published in the New York Times in 1970: "The Social Responsibility of Business is to Increase its Profits". See Robé (2012a) for an incisive criticism of Friedman's reasoning. A few years before, in a book that expressed his social an political vision, Friedman had written: "Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for the stockholders as possible," and later: "The corporation is a instrument of the stockholders who own it" (Friedman, 1962, pp.…”

Section: The Theoretical Foundations: Property Rights and Contractmentioning

confidence: 99%

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Firm, Property and Governance: From Berle and Means to the Agency Theory, and Beyond

Weinstein¹

2012

Accounting, Economics, and Law

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Over the last thirty years, the shareholder conception of corporate governance has established itself as the foundation of the power structure and management principles of the corporation. It is based on a specific theorization of the firm: agency theory. Our aim is to explain the full significance of this theorization, by considering the context in which it was developed and the project -of a fundamentally political nature -that it conveys. For that purpose, we return to the questions raised during the first half of the twentieth century, in the seminal book of Berle and Means and in subsequent works by Berle; questions of a much broader scope that the relationship between shareholders and managers. We will show that agency theory can be considered a response to the most important ideas advanced by Berle and Means, and then by Berle (and others), after the New Deal and the Second World War. Comparison of these two themes of reflection leads us to identify two theorizations, and two radically different conceptions of the firm and the corporation. To address these issues, we start by considering the questions raised in the early twentieth century about the nature of the corporation and the status of managers; and how, in response to these questions, Berle constructed a certain conceptualization of the corporation and of managerial capitalism; we shall then revisit the contract-based approach of Jensen and Meckling, to assess the theoretical and ideological content and show how it was actually strongly opposed to Berle's vision. Lastly, by way of conclusion, we shall endeavor to show how the opposition between these two theorizations should be seen, above all, as an opposition between two theories that are both "performative" rather than positive, and that the apparent success of agency theory and the dominance of shareholder primacy in corporate governance can only be understood in an institutional and political perspective.

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Section: The Theoretical Foundations: Property Rights and Contractmentioning

confidence: 99%

“…96 Which is, it must be remembered, perfectly in keeping with corporate law, as a number of jurists have remarked. See, for example, Blair and Stout (1999), Robé (1999Robé ( , 2012a and Stout (2012). The shareholders are only owners of the securities issued by the corporation, which is obviously very different.…”

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confidence: 99%

Firm, Property and Governance: From Berle and Means to the Agency Theory, and Beyond

Weinstein¹

2012

Accounting, Economics, and Law

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“…13 This view is not dependent on the differences between legal traditions (Siems, forthcoming;Corbisier, 2011), yet has been ignored for more than thirty years. (Robé, 2012;Robé, 2010) It would be a crucial step to focus on this point of view, which shapes the OECD's definition of corporate governance as a set of relationships between a company's management, its board, its shareholders and its other stakeholders. (OECD, 2004) Nevertheless, it is important to keep in mind that "if there is to be a move, or perhaps we should say a greater move, to stakeholderism it must involve more than just legislative directives and it will certainly take time."…”

Section: Conclusion: Going Beyondmentioning

confidence: 99%

Embrace the Coming Changes in Corporate Governance: Lessons from Developments in Corporate Law – A Comparative View

Tchotourian

2012

SSRN Journal

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“…Friedman was making a critical mistake in assuming that shareholders own the firm. It is clear for legal scholars, in both common law and coded civil law, that shareholders only own their shares of the corporation, not the firm, which is an economic entity (deprived of legal status) that cannot be owned(Favereau, 2018;Robé, 2012). Remarkably, public opinion and most economists discard this crucial fact.…”

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confidence: 99%