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Abstract

During corporate America’s Gilded Age, satirist Ambrose Bierce defined a corporation as “[a]n ingenious device for obtaining individual profit without individual responsibility.” One need not accept that definition to recognize that it captures a debate about corporations that has preoccupied America for more than a century: Does a corporation have any responsibility to society? Or, is its only obligation to maximize profits for its shareholders? Nobel Laureate Milton Friedman famously stated that a corporation has “one and only one social responsibility”— “to increase its profits . . . . ” “Few trends,” he wrote, “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 their stockholders as possible.” “This,” we are told, “is a fundamentally subversive doctrine.”

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