If a corporation is the property of everyone who claims to be a “stakeholder,” then true property rights, the hallmark of human progress and individual rights, are obliterated. From Jeff Deist at mises.org:
The GameStop saga shows some “equity” movements are more equal than others.
Stakeholder theory, the corporate version of social justice, attempts to install this hopelessly amorphous concept of “equity” in the business world. Equity, unlike equality, demands different treatment of individuals and different distribution of resources based on need, identity, and historical injustices. But now equity has evolved beyond a political buzzword, and finds growing support in calls for stakeholder capitalism. The animating impulse in big corporate boardrooms today requires cultivating an image of social responsibility. Under this theory business firms should entertain all kinds of noneconomic goals and outcomes. No longer may owners simply concern themselves with profit or loss, but instead must consider the broader societal implications of everything their business does. Whether corporate leaders concern themselves with social justice out of genuine desire or merely to avoid backlash is an open question, but the events of 2020 clearly changed the conversations in boardrooms.
Under the old conception, businesses have four primary elements, namely owners, managers, employees (or vendors), and customers. All four have skin in the game, which is to say their own money or income is involved. The notion of stakeholders inverts this paradigm and grants a degree of power over ostensibly private businesses to those who take no risks and provide no benefit. By undermining the suddenly old-fashioned idea of profit and loss as the guiding principle for business, stakeholder theory calls into question the very existence of millions of businesses big and small—in fact their grubby and narrow focus is simply to make money.
CEOs and their companies now have to be “woke.” From Tim Hartnett at lewrockwell.com:
Vivek Ramaswamy is not a white Anglo-Saxon Protestant but he is a man and he did some ‘splainin. It’s not a good sign that it was necessary on the op-ed page of The Wall Street Journal. Skepticism tends to be looked on with skepticism these days—popular culture is always ripening the harvest for confidence men.
The subject of Ramaswamy’s piece is another enlightened scheme for saving the world—from what we will all find out–as the vision unfolds. This time it goes by the Newspeak name “stakeholder capitalism.” The term is supposed to mean that righteous corporations will be raising the stakes above mere profit for shareholders. What it looks to be saving us from, as Mr. Ramaswamy is wont to point out, is that ever-present peril to democracy known as “one man one vote.”
A new, improved corporatocracy now has plans to look out for you–a guy with no stake in the company–just like Bill O’Reilly does. What kind of fascist could have a problem with that? It’s not like the last few generations have been immune to clandestine arrangements—engineered in opaque conclaves—to fix our broken world. The question is, if any of them are working, who are they working for? People who dare to question high flying priorities—under a banner of noblesse oblige that nobody voted on–are frequently heaved to the political kitchen bin. Anybody who can’t tell the difference between a CEO who stands for goodness itself, and a televangelist making the same claim, might not be employable once Mom and Pop’s finally get wiped out. Where’s the downside of that? What could Vivek, who is a CEO himself, be thinking?
Remember when car companies’ main job was to make cars for people who wanted to buy them and generate profits for their shareholders? From Eric Peters at ericpetersautos.com:
They must serve soy at GM’s corporate cafeteria. It could account for the strange statement released the other day by GM’s CEO Mary Barra. It says that the main purpose of GM is to make sure that “each person . . . lead(s) a life of meaning and dignity.”
Wasn’t it to make cars?
Emphasis on was. It isn’t anymore – apparently.
“The purpose of a corporation,” the statement continues “is to serve all of its constituents, including employees, customers, investors and society at large.”
“Society at large”? This smacks of social(ist) studies rather than STEM.
But that’s what happens when a person with a background in human resourcesbecomes the head of a car company.
And it’s not just Barra.
Ford CEO Jim Hackett affixed his John Hancock to this opus – this thesis, in the Martin Luther sense – as well. Along with Borg Warner CEO Frederic Lissalde and Tom Linebarger of Cummins and 181 titans of American business. Many of these businesses have been losing market share for years. The whole of GM today has about 8 percent less market share than Chevrolet by itself had in 1970.
Which may explain the ennui of these businessmen about business.
It’s like a chapter from Ayn Rand’s Atlas Shrugged come to life.