Journal of Business Ethics

, Volume 153, Issue 1, pp 41–52 | Cite as

How Friedman’s View on Individual Freedom Relates to Stakeholder Theory and Social Contract Theory

  • Johannes JahnEmail author
  • Rolf Brühl
Original Paper


Friedman’s view on corporate social responsibility (CSR) is often accused of being incoherent and of setting rather low ethical standards for managers. This paper outlines Friedman’s ethical expectations for corporate executives against the backdrop of the strong emphasis he puts on individual freedom. Doing so reveals that the ethical standards he imposes on managers can be strictly deduced from individual freedom and that these standards involve both deontological norms and the fulfillment of particular stakeholder expectations. These insights illustrate the necessity to reconsider how Friedman’s approach relates to other important normative theories of business ethics. Contrasting Friedman’s approach with stakeholder theory and integrative social contract theory—when considering the importance he assigns to individual freedom—shows how and why these approaches differ. Still, the comparison also highlights striking similarities. This paper contributes to a better understanding of Friedman’s position—which is still one of the most influential approaches in business ethics research—because it enables a differentiated look at its strengths and weaknesses.


Individual freedom Integrative social contracts theory Milton Friedman Profit maximization Stakeholder theory 



Corporate social responsibility


Integrative social contracts theory



We are grateful to Melanie Eichhorn for her helpful and constructive feedback on the various earlier versions of the manuscript. Furthermore, we would like to thank the editor, Alejo José G. Sison, and the four anonymous reviewers for their insightful comments throughout the review process.


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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.ESCP Europe Business SchoolBerlinGermany

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