Ugh, Milton Friedman started perpetuating that particular falsehood around 1970 and now everyone believes it, so much so that they <i>expect</i> to get raped up the ass by big corporations.<p>Why do we have an economy?  It's because ordinary people need goods and services.  If we didn't, we could all stop working and stop buying things and live happily ever after.  Most of us aren't shareholders in any significant way; if we actually believed that businesses existed to serve shareholders, let's get rid of them!<p>The reason company officers should <i>act</i> as if they're beholden to shareholder value is because there's no economic check on their resource consumption otherwise.  It's easy to satisfy consumers: simply take lots of money from shareholders or the government, and give it to the people (a la AllAdvantage.com and several other dot-coms).  But that's not economically efficient: there's no check on the resources consumed, so there's no incentive to be efficient, and you eventually run out of money.  The profit motive ensures that businesses consume as little as possible and produce as much as possible, so as long as they <i>act</i> as if their goal is to maximize shareholder value, they maximize efficiency throughout the economy.<p>But over time, <i>acting</i> in the best interest of shareholders has been confused with <i>the goal</i> of the company is the best interest of shareholders.  The former is an instrumental goal; the latter is an inherent one.  And the inherent goal of corporations is not to maximize shareholder value, it's to provide useful goods and services as economically as possible.  Google gets this; most other companies today do not.