Explain friedman economic theory in detail

Hello Aspirant

The shareholder theory is another name for the Friedman Doctrine. The idea, which was created as a theory of business ethics by American economist Milton Friedman, asserts that "an entity's highest obligation resides in the satisfaction of the shareholders." As a result, the company should constantly work to maximise its revenue in order to boost shareholder returns.

According to Friedman, the company's shareholders constitute its core, and as such, they deserve to be treated with the highest care. In order to maximise profits, an organisation must identify ways to reduce costs while adding value to existing products and services to increase revenues.

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Freidman's monetarism theory proposed that money supply changes have immediate and long-term effects . Friedman always advocated for free-market capitalism. He is the original founder of monetarism, a concept in which the government decided how much money is floated in the economy. Moreover, Friedman taught that government should have limited capabilities in the free-market model and should not have the power to disrupt it. he also advocated a negative income tax for people under a certain income level.

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