Milton Friedman is right, profit is a company’s only purpose
In his inimitable way, and with a Canadian union twist, Jerry Dias is on a mini-crusade to overturn the foundations of modern corporate capitalism. As the president of Unifor ratchets up his actions against General Motors Co. over its plan to close the automaker’s Oshawa, Ont., assembly plant, he is deploying some of the ideas from the burgeoning movement to replace profit maximization with a greater focus on employees, communities, social issues, national impacts and global concerns.
By attacking GM’s profits and plant closures as manifestations of corporate greed, Dias is promoting principles long advocated by social and economic theorists who want to reform the corporate model. Instead of pursuing shareholders’ interest in achieving ever-higher profits, as GM is alleged to be doing, they believe corporations should adopt higher moral purposes and objectives.
At the other end of the corporate power structure, but on the same subversive ideological page, is Larry Fink, head of BlackRock Inc., the world’s largest fund management firm. “Companies serve a social purpose,” he has said. Governments, apparently, are no longer able to protect the environment, engineer social equity, alleviate poverty and solve broader societal challenges.