[Originally posted on October 5, 2005]
Eureka! Thanks to John Mackey’s debate with Milton Friedman, I believe I’ve finally figured out the subtle flaw in the neo-classical formulation of capitalism:
I. The purpose of business is to create value for shareholders
That statement is either false if interpreted rigidly, or else so vague as to be useless. I propose a better formulation, which I call “Sustainable Capitalism.” [or Values Capitalism, or Capitalism 2.0 ].
II. The purpose of business is to sustainably create value for all stakeholders
I look forward to feedback…