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Milton Friedman famously argued that the social responsibility of a company is to maximize its profits. Today, Friedman’s argument is coming under fire from both sides of the aisle. Shareholder capitalism is viewed with suspicion, and many Americans think workers and consumers are getting a raw deal. Greedy business practices are enriching the few but leaving the rest of us behind, the narrative goes. But are the interests of shareholders and the interests of workers and consumers really opposed? Is American capitalism really a zero-sum game? Alex Edmans, today’s guest, argues that companies can invest in people without sacrificing profits.
Alex is a professor of finance at London Business School and the Academic Director of the Centre for Corporate Governance. He is also the author of last year’s Grow the Pie: How Great Companies Deliver Both Purpose and Profit.
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