It was argued, yes, but that is a state supreme court decision, not binding in any other state, and there is still no law that says this is true. Friedman wouldn’t have bothered arguing about it in 1962 if it was unquestionably federal law or already settled by 1919. It is only convention.

It really isn’t. Smith argued (I agree wrongly) that the invisible hand of a free market would correct everything, but that monopolies and restrictions distort the market and that the worst thing we could do would be to allow corporations to dictate law. That was my point. The US has set up too many barriers to entry to reasonably claim it is free market, and corporations have absolute control over the current government.

Any reasonable reading of Smith’s Wealth of Nations would be socialist anyway. He outright stated that the capital class had a responsibility to entirely pay for the expenses of the state in caring for the populace.

The better discussion of Smith would be what industries could reasonably be capable of sustaining an actually free market. I would argue that housing, communications, agriculture, and healthcare are impossible to de-monopolize due to practical spatial limitations and therefore would have to be under state control, given Smith’s statement that capitalism’s invisible hand only works in a free market.

The USA is not capitalist in the sense most people (e.g. Adam Smith) mean. It is a protectionist oligarchy, that is capitalist only in the sense that it protects those with capital over all else. Monopolies and trade restrictions protect the capital class at the cost of the populace, and most laws are now written by corporations who hand them to their sponsored representatives. It is exactly what Adam Smith warned against.

Publicly traded companies are legally bound to prioritize shareholder demands ahead of any other duties.

This is actually a myth. They are expected to be responsible with their money, but they are not in any way required to maximize profit from a legal perspective. They repeat the lie because it is a good excuse to be evil. If a company doesn’t do what it’s shareholders like, they may vote out the board, or they might sue if the prospective was fraudulent (said they were working on something that they weren’t for example… But remember also that American companies don’t make forward statements like European ones do, so those cases are going to be things like “last year we spent 10 million on R&D” when they actually spent the money on plane trips to cocaine parties) but those are the recourses available to shareholders.