Elizabeth Warren Channels Milton Friedman
By David Henderson
Elizabeth Warren Opposes Corporate Social Responsibility
On Facebook and elsewhere, many of my libertarian friends have claimed, quite correctly in my view, that Senator Elizabeth Warren, in this letter, is bullying various heads of major banks. She realizes that she doesn’t have the legal power to get them to do what she wants and so she puts her request on a letterhead that reminds them that she does have some legal power over their livelihoods. The whole letter, which is only 2 pages long, is worth reading. Here’s her specific request:
I am writing to encourage you to disclose financial contributions your institutions make to think tanks. In my view, policies by your institutions to conceal those contributions from public view are wrong. Greater transparency will benefit your shareholders, policymakers, and, ultimately, the public.
And, as we all know, Elizabeth Warren is all about transparency.
Beyond the bullying, though, there are two things I found interesting about Senator Warren’s claims.
First, she’s agreeing with Milton Friedman about his famous claim that corporations should not be “socially responsible.” Here’s the section of her letter in which she does that, and does it quite forcefully:
As the CEOs of public companies, you have an obligation to expend corporate resources only in ways that advance the interests of your shareholders.
Do I believe that she believes that? Of course not. I just find it interesting how far she’ll go to find an argument to beat them with.
Second, and this is part of why I think she doesn’t believe her own statement, she contradicts herself. In another part of her letter, she writes:
If the information provided by think tanks is little more than another form of corporate lobbying, then policymakers and the public should be aware of the difference.
But hold on. If “the information provided by think tanks is little more than another form of corporate lobbying,” doesn’t that mean that by contributing to think tanks and not revealing which think tanks they are contributing to, CEOs are expending “corporate resources” “in ways that advance the interests of [their] shareholders.?” So shouldn’t Elizabeth Warren be applauding them for not revealing which think tanks they are contributing to? After all, according to her, advancing the interests of their shareholders is the only justified use of corporate resources.
Of course, we know the answer. But, again, it’s interesting to see how far she will go in trying to get what she wants.