Philosophy 2074F/G Lecture Notes - Lecture 3: Spritsail, Corporate Law, Day Trader
13 Dec 2020
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"in a free-enterprise, private property system, a corporate executive is an employee of the owners of the business. Shareholders have property rights: shareholders as having property rights, profit as contributing to social utility. Social utility argument is argument of benefits of free market (in sprit of adam smith) In short: the doctrine of social responsibility, friedman contends, involves acceptance of the socialist view that political mechanisms, rather than market mechanisms, are the preferred way to distribute or allocate resources. The corporate executive, however, is an employee of a company, and social responsibility is not part of that particular social role or job description. Heath makes the case that corporate law is a blunt instrument which doesn"t actually prevent this from happening, at least as well as it should. When people put money into a corporation, they subject themselves to moral hazard, and one of these hazards is a corrupt manager who serves themselves first and the shareholders second.
