Sorry if that sounds offensive, but you are being a bit shortsighted here. The theory just says that shareholder value serves both as a guide to what a business should do, and as a measure of how good it has done, because that measure encompasses all others. Which is debatable but far from stupid: do you really think Apple would have sold so many i* had they been ugly? Do you really think that angry people demanding taxes, regulations, etc don't affect how businesses decide to actually go and maximize shareholder value? The actual real absent in Friedman's reasoning is "eventually": externalities always come to haunt the shareholder value, the question is when do they become tangible enough that this aligns with society's perception of those externalities.