ABSTRACT
In Chapter 8 the various threads of Part II come together in an extended discussion of corporate governance and corporate social responsibility, contrasting the Shareholder Theory of Milton Friedman with the Stakeholder Theory of R. Edward Freeman. We review and consolidate the discussion of Classical Liberalism thus far with the objective to convince the reader that a range of views is possible concerning our ethical obligations to one another as individuals and concerning the ethical duties of corporate entities to the civilized societies that host them.
Specifically, the objective is to understand that responses from within these frameworks raise important questions of value (in the ethical sense) that demand our attention as critical, informed and engaged citizens. We have set the stage for an extended discussion, in Part III, of what is likely the most consequential issue of all to arise out of these considerations: the relationship between Classical Liberalism and our values, in the fullest sense of what matters to us and why.
The central conclusion of this chapter is that the Stakeholder Model of corporate social responsibility is the only one compatible with the narrative of sustainability sketched in Chapter 4.
