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Originally Posted by SteveEisenberg
A lot of posters here seem to think that the supreme responsibility of private businesses is to customer welfare. Your viewpoint at least has the attraction of being different.
At least publicly, I don't think you would find many private businesses saying that their only responsibilities are to obey contract terms and keep up the stock price. But if that really is their only moral responsibility, you just gave a tremendous argument against capitalism.
I don't recall anyone giving such a hyper-capitalist defense -- or any defense -- back when some of the big five refused to sell eBooks to public libraries. Then it was a major sin. But maybe I forget and/or maybe your opinion was different.
Hardly any of the corporate players would publicly agree with your stockholder-focused description of their mission. For one example, Penguin Random House's owner, Bertelsmann, is in turn mostly owned by a charitable foundation. When I posted that before, a German poster questioned the sincerity of the arrangement (I can't recall, but maybe he called it a tax dodge). However it is partly the case that Penguin Random House is in business to help charities. And, even though I'm often an Amazon critic, I think that Jeff Bezos had a genuine public interest motive in buying the Washington Post (and subsequent adding reporters). He would never agree that the purpose of Amazon is to make stockholders as much money as possible while obeying his contracts.
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I would argue that Bezos bought the Post mostly to give himself a platform to advocate the things he finds important, including things to the benefit of Amazon.
Bezos is the perfect example of someone who understands the value of pumping money back into the company rather than turn it all over to the stockholders. Jobs was the same way, though Cook caved in to the investors as soon as Jobs died.
When Friedman advocated a primary responsibility to the stockholder, times were very, very different. Investors tended to be long term and care more about things like dividends rather than next quarter's stock prices like so many get rich quick investors want to do now.