Many are praising a recent Business Roundtable announcement suggesting that corporations should serve stakeholders as well as shareholders. On the surface, this may seem like a historic reversal of the status quo that has held since Milton Friedman put forth his famous “shareholder primacy” theory in the ’70s. But it’s not that simple.

On this episode of the Capitalisn’t podcast, hosts Kate Waldock and Luigi Zingales lay out the long history of this theory, revealing that it’s really been around for as long as we’ve been asking one of the most fundamental questions in business: what is the purpose of a corporation? They explore that question, and interrogate the possible underlying motives behind the Business Roundtable’s decision.

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