Thread by @DanielAlpert

1/5
Thank you, @andrewrsorkin, for compiling these - largely, appropriately critical - essays on Milton Friedman's work of a half century ago. But one critical argument is absent: The change in composition of share ownership over the past 50 years.>> nyti.ms/2GRaXTK

2/5
As Hyman Minsky wrote sometime after Friedman's disturbing exegesis on corporate capitalism, even by the 1970s - larger by magnitudes since - the shareholders for whom profits are being generated have become isolated from corporate governance/oversight by "money managers.">>

3/5
This "money manager capitalism" is not really focused on profits, but on values reflected in stock prices. Regardless of profitability, manager-intermediaries seek, at all costs, price gains that place them in a competitive, or at least equal, position with other managers.>>

4/5
And they reward - handsomely - a managerial class for obtaining stock price gains, without regard to short of long term profitability. And, for the most part, these money managers can't "vote with their feet" and exit otherwise mismanaged companies for fear of their own...>>

5/5
...competition (other managers) NOT exiting and obtaining superior portfolio returns. Friedman's deluded prescription ignored the then developing nature of share ownership. Reading into Friedman a commitment to long-term profitability is, accordingly, besides the point.
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