This is the Cato Daily Podcast for Tuesday, November 9, 2021.

I'm Caleb Brown.

Plenty of corporations are arranged to look out for so-called stakeholders, non-owners,

who stand to benefit from the mission of the organization,

while others focus strictly on the bottom line.

The feds want to have a say about how companies operate and the camel's nose under the

tent appears to be moving toward compelling corporations to disclose

how friendly they are to a variety of non-profit related interests.

Adam Millsap was stand together comments. So there was a famous fight many years ago between

John Mackie of Whole Foods, occasional guest on this podcast, and Milton Friedman

who sadly was never a guest on this podcast talking about the idea of

stakeholders within firms and Milton Friedman had the sort of I guess normative

view that look bottom line all that a company is going to be

worried about is increasing shareholder value essentially everybody else is

secondary and in a sense there's no such thing as stakeholders.

There are owners, there are directors, there are people that the owners hire to run the thing and then there are the employees that are hired by the people who are hired to run the thing in order to make the whole enterprise profitable.

And John Mackie's point was, look, the more that you can give these people a sense of ownership, even if it's not in a technical sense, then you can increase shareholder value.

Milton Friedman says, well, that's fine, but again, at the bottom line, all that matters

is who owns it, those are the people whose value that needs to be enhanced by the people who run the corporation.

So there is this other issue related to this, which is to what extent are regulators and members of

Congress or state legislatures going to try to direct companies to take into into account the interests of so-called stakeholders.

Now I know Elizabeth Warren is a big fan of this kind of capitalism, stakeholder capitalism is what they call it.

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