PHIL 329 Lecture Notes - Lecture 9: Making Money

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Friedman:*Corporate*managers'*only*duty*is*to*promote*shareholders'*interests*(i.e.*
make*more*profits)*as*shareholders*have*property*rights*with*respect*to*the*labour*of*
corporate*managers
Friedman's*Shareholder*Primacy*View
****-Duty*not*to*put*others*in*harm's*way
Can't*torture*others*
§
Kill*others
§
Not*morally*justified*to*use*what*you*own*if*it*involves*harm*to*others
Property*rights*are*limited*by*negative*injunctions
Given*negative*injunctions,*we*are*pushed*in*the*direction*of*some*variant*of*the*
Stakeholder+Theory
Simon*Gunneman:*Negative*Injunctions*Objection -Duty*not*to*harm
Negative*injunctions*suggest*that*a*variant*of*Stakeholder*Theory*is*correct
Having*miners*work*in*mines*where*there*are*dangerous*gases*and*not*
informing*the*miners*of*these*conditions
§
Possible*harm*to*employees
1)
Selling*contaminated*food
§
Duty*not*to*put*customers*in*harm's*way
§
Possible*harm*to*customers
2)
Polluting*air*and*water*of*local*community
§
Possible*harm*to*people*in*the*community3)
Corporate*managers*have*a*duty*to*protect*the*interests*of*shareholders-but*they*
also*have*a*duty*to*protect*the*interests*of*other*groups*-at*least*to*the*extent*
that*they*shouldn't*harm*others*that*they*interact*with
Freeman's+Stakeholder+Theory+-
Friedman's+response+to+Negative+Injunctions+Objection
Their*aim*isn't*to*protect*the*interests*of*these*individuals,*rather*what*
results*in*corporate*managers*not*harming*these*individuals*is*obeying*the*
laws*that*protect*these*individuals
Case*1*-Laws*that*require*proper*ventilation*in*mines
Case*2*-Laws*that*require*food*to*be*safe
Case*3*-Laws*concerning*the*safe*disposal*of*waste
Corporate*managers*have*a*duty*to*obey*laws
-
-So*the*only*duty*of*corporate*managers*is*to*protect*interests*of*shareholders*and*
no*other*groups
(4th*paragraph*of*1st*page)
Why+should+corporate+managers+obey+the+law?
-Avoiding*protests*by*employees,*bad*press*
-These*things*would*slow*down*production*and*hurt*profits
Answer*1*-It*generally*leads*to*projecting*interests*of*shareholders
-Friedman*-lawmakers*play*a*valuable*role*in*society
-Corporate*managers*don't*need*to*do*what*the*lawmakers*do*-protect*the*
interests*of*individuals
-Corporate*managers*focus*on*what*they*are*experts*at*-making*money
Answer*2*-Law*makers*are*the*experts*in*protecting*the*interests*of*these*individuals,*
not*the*corporate*managers
What+happens+in+cases+where+there+are+"gaps"+in+the+law?
People*are*being*put*in*harm's*way*but*there*are*no*laws*to*protect*them
Is*it*permissible*for*corporate*managers*to*knowingly*put*individuals*in*harm's*way*when*
they*are*not*breaking*any*laws?
Friedman:
-No*longer*a*shareholder*primacy*view
Way*1*-We*need*to*act*in*accordance*with*ethical*customs
-Way*of*maintaining*shareholder*primacy
E.g.*Key*manufacturer
-Carr:*(starts*pg*3)*-"We*don't*make*the*laws"
Way*2*-Permissible*to*put*individuals*in*harm's*way
Lecture'9'Week'5
Wednesday,* February*10,*2016
1:59*PM
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