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bus 101 studddy - Bus 101: Test 3 Invisible hand: economy...

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Bus 101: Test 3 Invisible hand: economy is going to work without intervention, why? Work out of self-interest because ppl will do what they want and money will flow. Friedman says it won’t work- only reason market keeps going is because of competition. Invisible hand won’t work because monopolies will form and no competition Challenges with invisible hand theory: -monopolies -no government intervention, who will prevent monopolies Differences between Friedman and freeman Freidman-market will fix itself, idea with invisible hand is that market will self-regulate without intervention, main goal is to make money for the owners Freeman-not one stakeholder that’s more important than the other, therefore, needs to consider effect on all stakeholders in the long run. Still need to make money, but be more conscious about effect on people Similarities Freeman is saying that if you implement stakeholder theory and consider all stakeholders interests, don’t need govn’t intervention because all ppl are looking out for each other’s interests. Friedman agrees that it could work but he still thinks that owners=most important Freidman: Owners should get all money because they put in the most money and risk the most in business situations Freeman: Agrees their support is necessary because the company needs’ owners money. Support of owners interest is needed for the survival of the company, but they’re not always the most important Selsneck (long article) No rule of law for people to follow, Essential element=restraint of official power Whats legality? Opposes legality of restraint(what you can and cant do based on social norms) Treat everyone who breaks the same law equally (under good, ideal legality) Arbitrary?? Legal side of business:
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bus 101 studddy - Bus 101: Test 3 Invisible hand: economy...

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