Corporations and Society Initiative

A Stanford conference explores the many ways that corporate leaders wield power over government.

Milton Friedman’s claim that business managers would fulfill their social responsibility by making “as much money as possible while conforming to the basic rules of society” is highly problematic. It is based on false assumptions. The widespread acceptance of his dictum, and implicitly of his false assumptions, have caused substantial and preventable harm.

When corporate engagement with governments serves narrow interests and money is critical for campaigns and influence, the system causes “corruptive dependencies,” exacerbates inequality, and leads to the perception that our “captured economy” is rigged and unjust.

Anat Admati calls on economists and academics to engage with governance and political economy issues, scrutinize models before applying them to the real world, and enhance the positive impact of their work.

If we want to help restore trust in capitalism, we must think beyond the private sector and recognize the role of governments in making a capitalistic system work.

How one Stanford GSB student plans to challenge the prevailing short-term investment mentality.

With the Corporations and Society Initiative, Anat Admati hopes to make Stanford GSB a better citizen of the world.

This post on the Harvard Law School Forum on Corporate Governance and Financial Regulation is based on Professor Admati’s recent article, published in the Journal of Economic Perspectives.

For all the lofty values and leadership aspirations we profess to hold, there is precious little evidence that real choices and behaviour, or even hierarchies of status and awards, reflect what we espouse.