Shareholder supremacy and the precog CEO
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2026/06/13/minority-shareholder-report/#psychic-damage
It's been 55 years since Milton Friedman – cursed be his name – published his NYT editorial, "The Social Responsibility of Business Is to Increase Its Profits," in which he invented the idea of shareholder supremacy out of whole cloth and declared it to be a universal, freestanding, inarguable truth:
https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html
Friedman's editorial railed against the idea of "corporate social responsibility," arguing that corporate managers should confine the exercise of their consciences to projects involving their own money and resources. At work, managers must harden their bleeding hearts and do nothing except increase the returns to their shareholders.
Friedman wasn't merely arguing that this would give rise to better companies – the crux of his argument was that by adopting this "fiduciary duty" standard, it would be easy to determine whether a company was being well-managed or run into the ground:
https://pluralistic.net/2024/09/18/falsifiability/#figleaves-not-rubrics
Friedman argued that "being a good person" was a squishy, undefinable standard that could never be objectively measured. But "maximizing shareholder value" was a crisp, bright-line test that could be readily evaluated by any reasonable person. "Did this manager make as much money as possible for the company's owners?" feels like the kind of question we can all agree on, while, "Did this manager behave in an ethical way?" is much harder to answer.
But even a few moments' thoughts reveal the flaw in this line of reasoning. We can all agree whether a manager made money for the shareholders – but how can we know whether the manager made as much money as possible?
Think about how much "corporate social responsibility" cashes out to performative and insincere nonsense and/or cynical marketing. Target didn't stock Pride merch because they love their LGBTQ friends. They stocked it because they thought they could sell it (same goes for BP marketing its "green" gasoline). Google supports its coders' environmental/queer/antipoverty efforts because being the "don't be evil" company lets you hire in-demand workers who might otherwise go to work for Meta, and every engineer a Silicon Valley firm hires adds an average of $1m to the company's annual bottom line.
