Home > Uncategorized > The social question

The social question

from Peter Radford

If you were to ask me what the greatest intellectual error of the past fifty years has been I wouldn’t hesitate.  Shareholder value.  It’s an easy response.  Yes, it reflects my own curious interest in the fundamentals of business and its intersection with economics, but it is also emblematic of so much more.

Derived as it is from the wrong turn in economics and politics in the middle of the last century it carries with it so many of the ill founded ideas that have brought us all to where we are now: bedeviled once more by the social question.

How is it that the wealthiest nation the earth has ever witnessed is so ill equipped to ensure a secure life for its citizens?  All its citizens.

The history of the concept we know as shareholder value is well rehearsed.  There is no need to delve into its precise origins.  Like many pieces of technology it is an amalgam of ideas brought together eventually in one broad and encompassing whole.  Most of us have read the infamous newspaper article in which Milton Friedman gave his intellectual backing to the notion that the only goal of business management was to tend to the welfare of shareholders.   I think, from our vantage point many decades later, this appears to be uncontroversial.  We have been bent to accept something as a social goal which, in reality, only serves a few.  Generations of business school students have been taught the mantra.  They have taken on board the simplicity of the aim: shareholders are what matters, they need to be pandered to and nurtured.  Everything else is secondary.

In the murky waters of markets as conceived by the like of Friedman this is sufficient.  All those other constituencies we might think of as important to business: customers, workers, suppliers and so on, all benefit from the singleminded focus on shareholders.  The mysteries of the market make sure all those groups get their due share.  Market discipline, that vague and imprecise concept, is the veil behind which the free market zealots hide whenever asked to explain how this beneficence occurs.

It is the height of naivety.  It is the epitome of avoidance.

Shareholder value, of course, is extreme market economics written into management technology.  Its beauty is its simplicity.  It allows management to become as naive as the economists who preach free market doctrines.  More to the point it allows management to avoid responsibility for the social question.

Here we are, a few decades along, and living through a moment of great consequence.  Technology is back on the agenda.  Whose interest does it serve?  What is its purpose?  How are we to deal with the social upheaval it appears to be bringing in its wake?

The naive economist will respond that in the longer run all will be well.  After all that’s what happened before.  During the horrible early years of industrialization it was almost impossible to imagine that all the workers whose lives were being cut short by the conditions that motivated Engels and Marx to provide us with their critique could ever be better off.  They never were.  Nor were those in the subsequent generation.  It took at least three generations for adoption of technology to manifest itself in broadly shared rising prosperity.  But, eventually, the miracle occurred.  Economics hang their hat on it happening again.  What makes them so sure?

So disruptive was the change being experienced back at the origins of industrialization that the social question rose to prominence in intellectual and political circles.  What to do with the urban masses?  How to integrate them into society?  How to provide for them?  What were the political ramifications of this new “working class”?  Was revolution inevitable?  Was 1800s liberalism doomed?

The question was eventually answered.  Modern democracy emerged to temper the more violent edges of capitalist industrialization.  Workers gained a voice in the shaping of their own futures.  The urge for revolution as mostly reduced to periodic industrial unrest.  The disruption was allowed to continue because it was contained.  The state and administration in the private sector held a common goal: the social question was pushed into the background.

A significant factor in allowing the quiescence of the mid twentieth century to lull us into believing the social question was a historic rather than contemporary fact was the turn in technology.  It became seen and accepted as augmenting rather than replacing the worker.  Productivity rose.  So did wages.  The two, we were taught subsequently go hand in hand.  The two were inexorably tied together.  As technology drove productivity higher it opened space for wages to grow in step with it.  The later stages of the industrial era saw the less skilled able to participate in the bounty that had previously been reserved for the more skilled.  The middle class arose from this technological shift to augmentation rather than replacement.  The Keynesian vision of shorter workweeks and a broader leisure class appeared within reach.

Except.

As Tony Judt taught us we must never imagine that society is homogenous.  The rich simply do not want the same things as the poor.  It is an illusion to imagine the two groups are aligned along the same trajectory or have the same objectives.  And this simple observation is at the heart of the wrong turn in the middle of the 1900s.  The rich wanted more, the poor became their target.

The steady elimination of social considerations from decision making throughout all aspects of business and politics — all in the name of efficiency — steadily undermined the quiet.  Shareholder value was up front and center in this change.  The next wave of technologies unleashed on society became less worker augmenting and more worker replacing.  Already under pressure from those cheaper labor pools that were now being exploited to provide more profit for shareholders, workers found that the infamous rounds of disruption so ballyhooed in Silicon Valley were increasingly designed to cut costs, and they were the primary cost to be cut.

All of a sudden we were flung back into those early years of industrialization when machines were a threat rather than an aid.  And it seems to be getting worse.  The modern workplace is being thoroughly revamped so as to extract more profit for shareholders.  Words such as “precarity” and “fiscal insecurity” have become common in our discussion of the result.  The less skilled are being pushed downwards and not drawn upwards.  Broad swathes of our citizenry are unable to aspire to the same level of prosperity that their parents attained.

Something has gone wrong.

Technology sits at the heart of the problem.  Once again we ask: what is the purpose of the machine?  Have we not learned?  How many generations will suffer this time before the wealth is spread once more?

The pursuit of profit is a very narrow basis on which to sit a broad vision of society.  It cramps us all.  Its limitation destroys the conception of a worthwhile life encompassing much of what makes us human.  Yet it is the dominant motivation for much of what now passes for innovation.  Our complacency during the brief moment of calm when we all benefitted from the technological conveyor belt led us to forget to question the purpose and movement of progress.  It all seemed so easy.  William Beveridge was adamant that we do not cast the social question in the language of problems.  That would represent a reduction of our humanity into a technocratic space ill fitted for the expansive imagining necessary to answer the broader question: under what condition can we all co-exist harmoniously?

In his book 2010 Tony Judt used an Oliver Goldsmith quote as the starting point for his discussion of the social question.  In the decade subsequently we have failed to take up the challenge.  I am not even sure we have the correct language to tackle the problem.  As an aside, where, for my economist friends, is the “equilibrium” in upheaval?  Disruption is disequilibrium writ large.  Why is that not the dominant language of economics?  Why are we theorizing something that is not immediately relevant?  The language and metaphors of change would appear more urgent and useful.

 

Before we lose another generation surely we need upend the status quo; we need the language to describe our problem let alone concieve its solution.

And to borrow one last time from Judt: De Tocqueville, he reminded us, said this:

“I cannot help fearing that men may reach a point where they look on every new theory as a danger, every innovation as a toilsome trouble, every social advance as a first step toward revolution, and that they may absolutely refuse to move at all”

Oh, that Goldsmith quote Judt uses is:

“Ill fares the land, to hastening ills a prey, Where wealth accumulates, and men decay”

Where wealth accumulates, and men decay.

The social question is back.

  1. March 9, 2021 at 5:09 am

    Technology sits at the heart of the problem. Once again we ask: what is the purpose of the machine? Have we not learned? How many generations will suffer this time before the wealth is spread once more?

    I understand your feelings. Yes, something has gone wrong. But, you take it out on something irrelevant. I believe this is one of reasons of why we need good economics. Accusing extant economics is not sufficient. Simply advocating a new social plan is not sufficient either, because it most often misses the true working of the economy and easily dismisses side effects of the plan.

    • March 9, 2021 at 12:01 pm

      So why has Yoshinori not mentioned Peter’s answer to his own question?

      “The pursuit of profit is a very narrow basis on which to sit a broad vision of society. It cramps us all. Its limitation destroys the conception of a worthwhile life encompassing much of what makes us human. Yet it is the dominant motivation for much of what now passes for innovation”.

      That Goldsmith quote was used by G K Chesterton in the opening verse of his “Collected Poems”, published in 1927, the year after Britain’s “General Strike” against indefensible pre-mechanised working conditions in the mines and wages being cut as a result of Churchill’s misguided restoration of the gold standard in international trading. Chesterton’s “Outline of Sanity” in the same year was not anti-technological but reasonably expected technology to be used only where appropriate. (Mechanised mining eventually appeared twenty years later). What he saw was peasant agriculture providing a far better education and lifestyle than wage slavery: not unlike my own “apprentice” lifestyle keeping up with technological maintainability or my wife’s longstanding enjoyment of craft workshops. Chesterton did have “the conception of a worthwhile life”, which provides clues on what we should be aiming for. Sadly he does not seem to have realised what (as I’ve written recently) Adam Smith had seen: that what we now think of as a market economy is financed with what we now call Ponzi money. Instead he echoed Goldsmith’s lament:

      “Doom has reversed the riddle and the rhyme.
      While sinks the commerce reared upon that crime,
      The thriftless towns litter with lives undone,
      To whom our madness left no joy but one;
      And irony that glares like Judgment Day
      Sees Men accumulate and Wealth decay”.

      What we need to understand, reject and replace is the fundamental dishonesty of our Ponzi money. Perhaps because they are not what he was expecting, Yoshinori has not recognised a new framework theory indicating where the money flows as a replacement for the extant equilibrium economics; an information-based ontology of money; values based on the credit-worthiness of man rather than the value of goods; and a new “social plan” using personal credit cards in lieu of bank debit cards to give credit freely as, when and where it is needed. Put briefly, the payback in such a system is our doing gratefully the jobs that need doing.

      • March 10, 2021 at 10:24 am

        I think you are mistaken to call our money Ponzi money. Yes, that is the correct characterization of Bitcoin, but not M4/M2.

      • Meta Capitalism
        March 10, 2021 at 2:55 pm

        So why has Yoshinori not mentioned Peter’s answer to his own question?
        .
        “The pursuit of profit is a very narrow basis on which to sit a broad vision of society. It cramps us all. Its limitation destroys the conception of a worthwhile life encompassing much of what makes us human. Yet it is the dominant motivation for much of what now passes for innovation . (Peter Radford, RWER, 3/9/2021)”(Dave Taylor, RWER, 3/9/2021)

        .
        What Shiozawa ignores (willful ignorance) is reality itself. There is absolutely no place for a conception of a worthwhile life encompassing much of what makes us human in Shiozawa’s mind and theorizing. To wit:
        .

        Instead of presenting a formal proof (which may be theoretically impossible), let me talk about my own experience. How have I arrived at this idea? The story is a bit long and tortuous. (Shiozawa, Yoshinori; Morioka, Masashi; Taniguchi, Kazuhisa. Microfoundations of Evolutionary Economics (Evolutionary Economics and Social Complexity Science) (Kindle Locations 860-861). Springer Japan. Kindle Edition.)

        (….) If we really acknowledge that our capabilities are extremely limited, we must think from the opposite end. Let us imagine a lower animal with little reasoning power, Üxküll’s tick, for example. The tick does not calculate or predict what will happen. She waits until the world changes to a state that the inner state dictates. It is not the tick which calculates. It is the world which evolves by itself. (Shiozawa, Yoshinori; Morioka, Masashi; Taniguchi, Kazuhisa. Microfoundations of Evolutionary Economics (Evolutionary Economics and Social Complexity Science) (Kindle Locations 1053-1068). Springer Japan. Kindle Edition.)

        .
        This is pseudo-scientific just-so story telling aka scientism. He abuses and misquotes not only authors on this blog but his own appeals to authority such as his appeal to Üxküll whom he utterly misunderstands and abuses in that the core thesis of Üxküll was that each and every creature has its own Umwelt. A tick is not a human and human is not a tick. The very science of neurobiology proves this, but I doubt Shiozawa has a clue about the real science of biology; he only spoofs it for an appeal to authority and just-so story telling aka epistemic trespassing. But since his exercise in axiomatic-deductive reasoning (aka mental masturbation) requires for mathematical tractability a form of greedy reductionism that reduces humans to a caricature qua unthinking ticks (indeed, humans are habitual, but certainly not as habitual as ticks!).
        .
        Once you reduce humans to insects it questions about concerning quality, meanings, values, and questions about the conception of a worthwhile life encompassing much of what makes us human have no relevant meaning. For Shiozawa humans are mere automatons, ticks, no more important in economic theory than a sack of potatoes.

    • March 11, 2021 at 2:08 am

      Those who have read Meta’s comment above (not many I suspect, because regular readers of this blog are tired of his abusive comments), please compare it with the book review (free to download) by Marc Lavoie who is one of the leading heterodox economists and the author of the book Post Keynesian Economics: New Foundations. Probably, this is the third time Meta makes comments of the same content. Can he find no other points of criticism?

      • Meta Capitalism
        March 12, 2021 at 11:37 am

        The scientific state of mind is a major marvel in its own right. Sometimes it slips up, either in the interest of preserving an unfit paradigm or because it has fallen asleep. These lapses are not as nefarious as betrayals of science that are motivated by greed or pursuit of power, but nevertheless they are dangerous, perhaps the more so because they do not necessarily signal their dishonesty with obviously ugly immorality. The enemy of truth is untruth, whatever its motivation. Even high-minded “scientific” untruth always exacts costs, and often they are large and ramified beyond all preliminary calculation. (Jacobs, Jane. Dark Age Ahead . Knopf Doubleday Publishing Group. Kindle Edition 902. [ https://a.co/2XQJbIw ] )

        It is naively easy to find similarities between a computer—a machine—and the human body on a superficial level, but the analogy quickly breaks down under the findings of modern molecular biology, developmental biology (evo-devo) and epigenetics and the flood of new scientific evidence that old machine metaphors (Woese 2005) qua architectural blueprints (Davidson 2006) qua genetic algorithms (Reid 2007) fail in light of the emergent properties of the whole organism and its relationship to its environment. When Carl Woese asks, “If not machine, then what is a cell,” we should pause and consider that he does not ask this question lightly or without some degree of knowledge on the subject he is addressing. And if even on the simple biological level of a cell the machine/computer/algorithm analogy-metaphor breaks down in light of reality, how much more when we consider the creative mind of homo sapiens? The economy is not a machine, humans are not unthinking ticks solely following instinctual behavior patterns blindly following if-then genetic algorithms (Penrose 1990), but rather individual thinking, creative, social beings embedded in a social system the totality of which makes up social reality; nor does society or humans in it run like computer algorithm (Offer and Söderberg 2019).These are the simplistic greedy reductionisms of a blind mechanistic materialism making pseudo-scientific appeals to science blind to higher emergent realities (Clayton 2004).
        .
        You have your head so far up your pure theory you deny realities and confer upon yourself assumed knowledge born of fixated belief (ideology). Ideological is always limiting and is not the true attitude of a scientist. Ideology fixates on past stereotypes, while a true scientist in their loyalty and love of truth has the the faith to follow the truth wherever it leads, even it that means abandoning cherished prejudices and preconceived opinions. The true scientist doesn’t thoughtlessly (like a tick) spoof other fields for self-serving appeals to authority. Ideology may become a kulturkampf (ideological school) but living pursuit of truth can only be found in the freedom to face reality without the blinders of ideology and unexamined presuppositions. Science is falsified and reduced to scientism when the so-called “scientist” presumes to deny reality and confers upon him or herself assumed knowledge as you do in your empty claims about your book. Such ideology fosters a betrayal of intellectual honesty in that you won’t even face the fact that if not for “state intervention” you would not be enjoying the affordable healthcare you do here in Japan today. I know, for I just went through my annual checkup here in Japan and know full well what healthcare is like here in Japan. Instead repeat old tired tropes like an intellectual parrot. Peter has the creative imagination to ask the right questions; you have the shackles of ideology and cannot even see his aim is correct.
        .
        The tired and thread bare canard you so frequently intellectually parrot that “it takes a theory to beat a theory” is rooted in an anachronistic ahistorical stereotyping of Kuhn’s theory of paradigm changes, which even he noted was not a law or was set in stone. Narrative Pluralism (Fullbrook 2016) makes this clear as does Prematurity in Scientific Discovery (Hook 2002).

    • Meta Capitalism
      March 12, 2021 at 5:51 am

      The only two places were the term “plan” is used in this post is first by Shiozawa and then in reply by Dave. Peter never uses the term “plan.” So whatever do you mean by the term “plan” Shiozawa? Of course Shiozawa has already made plain what he means:
      .

      Our book is a pure theory book, but it is a result of deep human experience. I believe that our theory is more proof against abuse of state intervention, because we know the limits or difficulties of controlling economies. This is an important check function of economic theory for policy design. (Shiozawa, RWER, 9/24/2019)
      .
      It is a pure fantasy to imagine that we can analyze and understand national and global economy by participative observation and learning. Economics needs some different methods of analyses than those anthropology has found. (Shiozawa, RWER, 9/24/2019)

      .
      The two quotes above make explicit what Shiozawa leaves unspoken. They expose his ideology opinions which he presumes to claim are based in science and purportedly his book offers the “scientific” proof of his claims. Shiozawa may not like me making these claims explicit, but given his comment I think it appropriate his comment be given some context.
      .
      Let’s unpack these claims. First, the fact that economies are complex and difficult to control is no justification or basis upon which to make the assumption (really, it is a dogmatic ideological view take by Shiozawa) does not mean that the state has no role in society or the economy nor that its intervention can only lead to “abuse.” In fact, this claim is baseless in that if one takes the question of affordable healthcare in the U.S. and Japan and contrasts them his ideological dogma is exposed for what it really is: pure fantasy and the self-delusional ideology of market fundamentalism.
      .
      By large, no Japanese citizen need fear bankruptcy because of medical emergency. This is a social good that Shiozawa enjoys solely because of the intervention of the state in the market economy. When U.S. politicians sharing Shiozawa’s ideology based in market fundamentalism (not a science, but a pseudo-science of pseudo-economics) pass laws to deregulate healthcare (and other market sectors) this itself is a form of state intervention, but one Shiozawa is unable to recognize given is blind ideology qua market fundamentalism. This kind of political-state intervention (in this case to benefit corporate profits) has real consequences for peoples lives too.
      .
      The irony is that is it is truly pure fantasy and shallow human experience to make such claims that his book is “proof against abuse of state intervention” while he enjoys the very benefits of the very state intervention he claims leads only to “abuse” This is judicious given the contrast with access to healthcare in the US today.

      • Meta Capitalism
        March 12, 2021 at 5:54 am

        … ludicious given the contrast with access to healthcare in the US today.

  2. pfeffertag
    March 9, 2021 at 9:14 am

    “How is it that the wealthiest nation the earth has ever witnessed is so ill equipped to ensure a secure life for its citizens?”

    Other countries do not have this problem, at least not to anything like the US extent. So it is a political, not economic, problem.

    Joint stock firms are a political creation. What is to stop the US legislating for workers to be on the corporate boards as in Germany and Sweden? Politics. I see predominantly two aspects: the culture of extreme individualism and presidentialism, i.e., the direct national election of the chief executive. The latter is a disaster in about 60 countries and a success, of sorts, in only two: the USA and France (which is actually only semi-presidential). By success I mean able to sustain democracy (of sorts).

    The US political system won’t change so overall nothing will change with respect to the bottom layers of US society. For them, the US is already pretty much 3rd world and the decline will continue—though they will have their guns to prove how independent they are.

  3. March 9, 2021 at 10:29 am

    Milton Friedman is, for me, the economic extremist on the right best juxtaposed to Marx, as economic extremist of the left. Psychologically, Friedman shares with all of the extreme right a distrust, if not paranoia, about the State. Why? Because of the Holocaust. When you unravel this thread that runs through his life and writings you have a fulcrum against which to lever his extremism apart.

  4. Ken Zimmerman
    March 10, 2021 at 12:31 pm

    If you had asked somebody 100 years ago, ‘How’s the economy doing?’ they would not have known what you were talking about. At the time, people talked about things like banking panics, and national wealth, and trade. But, according to Zachary Karabell, this thing we call the economy — this thing that we constantly measure with specific numbers — was not really invented until the 20th century. Specifically, around 1930. “It was invented because of the Great Depression,” says Karabell in his book called The Leading Indicators. He writes:

    It was invented because there was clearly a perception that there was something really, really bad going on but they didn’t really know what. You could see there were homeless people on the street, you could see there were the Okies heading from their Dust Bowl farms off to California by the tens of thousands, but there was no way of really grasping it. So the government begins calculating this single, official number called national income. It is the forerunner of today’s Gross Domestic Product, or GDP, and it is basically the value of all the goods and services produced in the country in a year. When it is released in the depression, this wonky statistic becomes an overnight sensation. A report on national income submitted to Congress becomes a bestselling book. And soon, you cannot turn on the radio without hearing those numbers and what they are measuring.

    In the decades that follow, national income becomes gross national product and eventually GDP — and it sweeps the world. “The first thing you do in the 1950s and ’60s if you’re a new nation is you open a national airline, you create a national army, and you start measuring GDP,” Karabell says. You need to calculate GDP because if you want help from the World Bank or the United Nations, they are going to want to know: What does their help do for your country’s economy?

    It is somewhere around this time, Karabell says, that people start to make too much of GDP. Rather than a limited measure of the economy, it becomes this Cold War gauge of who is doing better, who is winning. And, so, perhaps inevitably, all that success leads to a backlash. In one of the most famous moments of that backlash, Robert Kennedy enumerated the shortcomings of what was then known as Gross National Product.

    “Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play.” “It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate, or the integrity of our public officials.” The original GDP was never intended to measure overall well-being or a nation’s standard of living. “It does what it says on the tin: It measures the economy,” says Diane Coyle, an economist who just wrote a book called GDP, A Brief But Affectionate History. “We shouldn’t make it do something it was never intended to do.” Despite this warning still a frequent occurrence for many of the cultural constructs people create to structure the world. One problem with GDP: Certain things that are clearly bad make GDP go up — like hurricane damage that costs a lot to fix and drug addiction mitigation.

    Even figuring what to count in GDP can be tricky. For example: Should you count the black market, which means everything from off-the-books babysitters to mafia drug deals? The U.S. does not. Other countries do. Back in the ’80s Italy started counting its black market and overnight the Italian economy became bigger than the UK economy. The Italians celebrated. They called it Il Sorpasso.

    These problems with GDP demonstrate the origins of such constructs as GDP. With the full notion of economy, in fact. We tend to think about economy (e.g., GDP) as a natural object. Like a mountain, and we have methods of measuring it that are better or worse and more or less accurate. And like a mountain the economy cannot be assessed or measured until humans conceptualize it. Humans invent these and many other ‘things’ to populate and explain people and events around them. Anthropologists call these inventions cultural constructs. Humans live in a social constructs world.

    The shareholder theory of value (SHVT) is one such cultural construct. Shareholder value thinking is endemic in the business world today. Fifty years ago, if you had asked the directors or CEO of a large public company what the company’s purpose was, you might have been told the corporation had many purposes: to provide equity investors with solid returns, but also to build great products, to provide decent livelihoods for employees, and to contribute to the community and the nation. Today, you are likely to be told the company has but one purpose, to maximize its shareholders’ wealth. This sort of thinking drives directors and executives to run public firms like BP with a relentless focus on raising stock price. In the quest to “unlock shareholder value” they sell key assets, fire loyal employees, and ruthlessly squeeze the workforce that remains; cut back on product support, customer assistance, and research and development; delay replacing outworn, outmoded, and unsafe equipment; shower CEOs with stock options and expensive pay packages to “incentivize” them; drain cash reserves to pay large dividends and repurchase company shares, leveraging firms until they teeter on the brink of insolvency; and lobby regulators and Congress to change the law so they can chase short-term profits speculating in credit default swaps and other high-risk financial derivatives. They do these things even though many individual directors and executives feel uneasy about such strategies, intuiting that a single-minded focus on share price may not serve the interests of society, the company, or shareholders themselves.

    Their unease is justified. So, why do they do it? Some say it is the power, others say it is the wealth, others the social prestige. None of this is relevant until the directors, CEOs, and business teachers accept that SHVT is not just appropriate but justified and morally correct. That process (called socialization) began in the 1970s and continues today. Driven by economists and politicians (both recipients of large money donations from shareholder groups), graduate educators in business and economics (mostly in pursuit of academic prestige and power), potential CEOs looking for bigger pay days, and ‘true believers’ in shareholders as the necessary foundation of American business domination in the world. And little of this support and proselytizing is based on clear empirical evidence. Socialization is so powerful that its messages continue to command even if the results kill those who are socialized and the culture of which they are a part and was the original source of the socialization. SHVT is likely to continue its dominance of American and most world economies, firms, and societies even if it destroys the persons, firms, economies, and even societies involved. Successful socialization leaves little ‘wiggle room.’

  5. Gerald Holtham
    March 10, 2021 at 2:26 pm

    Ken, you are too pessimistic. The primacy of shareholders has been less emphasised in many countries than in the US and UK and even there the pure doctrine is now in dispute. The doctrine has been criticized on empirical grounds – the effects of managements, who generally don’t stay in post more than a handful of years maximising share prices over that sort of horizon because of bonus linkage, is damaging short-termism. The philosophical basis for shareholder primacy was that they took the risk of company failure so deserved particular rewards. In fact most shareholders have diversified portfolios so their risk is spread. While a worker generally works for just one company and may have company-specific skills so is running much more risk from company failure. Social damage, eg to the environment, that companies do falls on everyone, not just shareholders. These arguments and consequences are having an effect. The heyday of shareholder supremacy has passed.

    • Ken Zimmerman
      March 12, 2021 at 8:40 am

      Gerald, The day’s not over yet. Corporations are now multinational and American corporations in which SHVT is still king are linked with European and Asian corporations where this may not be the case. American corporations also attempt to defend SHVT for their shareholders against non-American corporations that threaten it. In other words, there are lots of moving parts here. Many still supporting in whole or part SHVT. But you are correct that corporations are diversifying both in terms of employees and shareholder interests. But so long as SHVT provides big and bigger returns to shareholders, many shareholders and their institutions will support the theory. It is a big money maker for shareholders. And not to be trite, ‘money still talks’ for sociopathic shareholders. And despite some progressive terminology of late, most shareholders are sociopathic.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.