Bad ideas don’t die just because they are bad. They hang around until a consensus forms around another idea that is better. This is what’s happening now with a stupid idea has dominated American business for the last four decades: that the purpose of a firm is to maximize shareholder value. The massive problems that this notion has caused for business and society have been documented. Even Jack Welch has called it “the dumbest idea in the world.” Yet it remains the conventional wisdom throughout much of big business. What’s different now is that a consensus is forming around a better idea.

That’s the big news coming out of a recent report from the Aspen Institute which convened a cross-section of business thought leaders, including both executives and academics. The report’s most important finding is that majority of the thought leaders who participated in the study, particularly corporate executives, agreed that “the primary purpose of the corporation is to serve customers’ interests.” In effect, the best way to serve shareholders’ interests is to deliver value to customers.

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“Friedman won the way a great debater wins,” says Martin, “by cleverly framing the terms of the debate… Because Friedman was so inflammatory in his call for a 100 percent versus 0 percent handling of the trade-off, his entire opposition …has focused on making arguments for a number lower than 100 percent for shareholders. In doing so, they implicitly… accepted Friedman’s premise that there is a fundamental trade-off between the interests of shareholders on the one hand and other societal actors such as customers, employees and communities on the other hand. Ever since, the Friedmanite defense has been to force the opposition to prove that making a trade-off to any extent whatsoever against shareholders won’t seriously damage capitalism.”

“Had the opposition been cleverer, it would have attacked the premise from the very beginning by asking: what is the proof that there is a trade-off at all? Had they done so, they would have found out that Friedman had not a shred of proof that a trade-off existed prior to 1970. And they would have found out that there still isn’t a single shred of empirical evidence that 100 percent focus on shareholder value to the exclusion of other societal factors actually produces measurably higher value for shareholders.”