THE LEGAL AND ETHICAL ENVIRONMENT OF BUSINESS
Corporate Social Responsibility
Shareholder theory/Stockholder theory/Friedman Doctrine
The Friedman doctrine is based on the research and studies of Milton Friedman. Milton Friedman was an economist, statistician and author. He won a Nobel Prize in the field of Economics. His specialization was monetary history and theory, stabilization policy and consumption analysis. He had believed in the capitalism as the way to achieve economic success for a country. The main affirmation of his doctrine is that capitalism is able to increase the standard of living of a nation, without the intervention of the government. Friedman believed that the monetary system should be based in the following aspect:
* The federal Central Bank must print and pump into the economy the same amount of money as at the same rate of the economic growth.
It’s possible to see, that Friedman refuses intervention by the government (Fed). The government should adapt their actions to the market and the economic situation in the country. All companies and individuals must be free. In order to achieve these goals, Friedman supported his theory with the following ideas:
* Reform the monetary system and eliminate the creation and destruction of private money (Banking reserve of 100%)
* The state can determine its annual budget, based on the willingness of the population to pay for the public services.
* To determine in advance and with exact dates, the conditions and quantities invested in social services.
* Taxes collected based on the individuals incomes.
The government should only control certain issues of the market (e.g. monopolies). Before the collapse of the Bretton Woods System (almost fixed exchange rate), he did recommend already to let the currencies float. The government should only focus on maintain the law and the order, supervise the currency, and the national defense. All other aspects should be determine...