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http://ssrn.com/abstract=1685288
 
 

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Does Profit-Seeking Rule Out Love? Evidence (or Not) from Economics and Law


Julie A. Nelson


University of Massachusetts at Boston - Department of Economics; Tufts University - Global Development and Environment Institute

September 30, 2010

Washington University Journal of Law and Policy, Vol. 35, pp. 69-107, 2011
GDAE (Global Development and Environment Institute) Working Paper No. 10-06

Abstract:     
Many believe that firms are driven to maximize profits, and therefore are not allowed to take actions that would benefit their workers, communities, or the environment if these actions would reduce profits even slightly. This essay shows that this belief is supported neither by sound economic evidence and arguments, nor by United States statutory and case law. The roots of this belief are, instead, to be found in a centuries-old desire of economists to make our discipline look like Newtonian physics. Among scholars of law, both misinformation and the use of University of Chicago-style economics have contributed to the belief's popularity. Among scholars and the public alike, the dualistic "love or money" view is appealing because of its simplicity and congruence with cultural gender norms. Reexamining the evidence, rather than adhering to common ideologies, this essay offers an unconventional analysis of corporate behavior and commodification.

Number of Pages in PDF File: 32

Keywords: profit maximization, shareholder value, shareholder primacy, corporate law, corporations, law, economics, gender, commodification, corporate social responsibility

JEL Classification: A13, D21, D64, K00, L21

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Date posted: October 3, 2010 ; Last revised: November 19, 2011

Suggested Citation

Nelson, Julie A., Does Profit-Seeking Rule Out Love? Evidence (or Not) from Economics and Law (September 30, 2010). Washington University Journal of Law and Policy, Vol. 35, pp. 69-107, 2011; GDAE (Global Development and Environment Institute) Working Paper No. 10-06. Available at SSRN: http://ssrn.com/abstract=1685288

Contact Information

Julie A. Nelson (Contact Author)
University of Massachusetts at Boston - Department of Economics ( email )
100 Morrissey Blvd.
Boston, MA 02125
United States
HOME PAGE: http://www.umb.edu/academics/cla/dept/economics/faculty/facultyNelson.html
Tufts University - Global Development and Environment Institute ( email )
MA
United States
HOME PAGE: http://www.ase.tufts.edu/gdae/about_us/researchers.html#nelson
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