Beyond Disruption

Chapter Four The Rising Importance of Nondisruptive Creation

Ever since the Nobel Prize–winning economist Milton Friedman, arguably one of the most influential thought leaders of the twentieth century, introduced his theory of shareholder primacy, there has been a presumed trade-off between maximizing economic gain and social good. Friedman’s theory is at the heart of capitalism as we know it today. He posited that the sole purpose of a firm is to make money for its shareholders. So long as a business stays within the rules of the game, not using deception or fraud, Friedman argued, “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”¹ Maximizing profit, ...