‘Stakeholder Capitalism’ a Sham? Unfortunately Not

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A week or so ago, Lucian A. Bebchuk and Roberto Tallarita wrote an article for the Wall Street Journal in which they complained that the notorious (my description, not theirs) redefinition of the purpose of a corporation contained in a statement by the Business Roundtable (BRT) in August 2019 was something of a sham. By introducing the new definition, the BRT abandoned its earlier support for shareholder primacy — the idea that a company should be run, above all, for the benefit, shockingly, of the shareholders who own it — in favor of the assertion that a company should be managed in a way that takes proper account of the interests of various “stakeholders” of which shareholders were only one category.

Despite this, Bebchuk and Tallarita maintained that very little had really changed…

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Afghanistan’s Coming Economic Collapse — and What It Could Mean

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No government — particularly one with only a shaky claim to legitimacy, none of it democratic — will ever enjoy a sudden drop in its country’s standard of living. That is something the Taliban may shortly discover as they try to consolidate their hold over a society famously fragmented along ethnic lines. Terror reinforced by purloined American weaponry may work, at least for a while. And yes, the universalist pretensions of the Taliban’s Islamism will win over some hearts and minds, as will the order, however harsh, that their form of Sharia brings with it. Nevertheless, if the Taliban, a movement still strongest in its Pashtun heartland, come into too abrasive a conflict with the traditional loyalties of other Afghans to their kith, kin, and tribe, they may struggle.

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The Damage Won’t Be Contained to Afghanistan

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It’s obvious — if not necessarily to the Biden administration — that the success of a nation’s foreign policy depends, in part, on its ability to shape the way in which it is seen abroad. The U.S. was able to ensure the survival of West Berlin — a highly vulnerable exclave — throughout the Cold War in no small part because the Kremlin could never be certain how fiercely America would react if the Soviets attempted to take over the western half of that divided city by force. The Berlin Airlift was an early and remarkable display of support, but the dispatch at the same time of three B-29 bomber groups, which may or may not have been in a position to initiate a nuclear strike, to the U.K. may also have helped persuade Stalin to take things no further. To work, deterrence must be credible. The American, British, and French troops stationed in West Berlin for decades were no more than a tripwire, but Moscow could only speculate about what would follow from triggering it. It never took the risk.

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Private Sub-Orbital Spaceflight, Hell Yeah!

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So, first Richard Branson and now Jeff Bezos have made their quick joyrides into space (or its neighborhood: in Branson’s case, it depends on whom you ask) and, critically, back. The flights were a victory lap of sorts for science, human ingenuity, and immense entrepreneurial drive. Not everyone was pleased.

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Democracy Dies in Regulators’ Offices: The SEC, Regulatory Creep, ESG, and ‘Climate’

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This isn’t the first time that I have written about regulatory creep, and it won’t be the last. Lacking the legislative majorities required to push through much of his agenda, Joe Biden is turning to regulators for help. His won’t be the first White House to rely on unelected bureaucrats in this way, but one — how to put this — distinctive aspect of the Biden approach is the way that regulators are, with, presumably, the administration’s connivance, extending their mandates to places they were never intended to go. It’s not pretty, but as a device to bypass the democratic process it can be startlingly effective

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Stakeholder Capitalism: Corporatism by Another Name

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The, well, woke nature of “woke capitalism” — a phenomenon intertwined with “socially responsible” investment (SRI), with stakeholder capitalism at its base — has obscured that the way in which this combination works owes far more to fascism than to socialism. Nearly 90 years ago, the progressive writer Roger Shaw described the New Deal as “employing Fascist means to gain liberal ends.” Overwrought, perhaps, but not without some truth. He would recognize what is going on now for what it is.

Underpinning the notion of “stakeholder capitalism,” a concept that has taken the C-suites of some of America’s largest companies by storm, is the idea that a company should be run for the benefit of all its “stakeholders,” a conveniently hazy term that can be defined to include (among others) workers, customers, and “the community,” as well as the shareholders who, you know, own the business. It’s a form of expropriation based on the myth that a corporation that puts its shareholders first must necessarily put everyone else last. In reality, an enterprise that, to a greater or lesser extent, fails to consider the needs of various — to use that word — stakeholders in mind, customers, most obviously (but certainly not only) is unlikely to flourish, and nor, therefore, will its owners.

Stakeholder capitalism is not only a threat to private property, but also, by not much of a stretch of the imagination, to individual freedom. To understand why, take a step back.

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The return of the UFOs

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By the time you read this, Uncle Sam’s latest ‘definitive’ report on UFOs (it’s not the first) will have been made widely available, with the exception of a classified annex (there’s always room for a sequel). If the leaks are to be believed, we will have learned that there’s a lot more out there that we don’t know.

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ProPublica, Billionaires, and You.

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However much some on the left might like to deny it, there is a legitimate distinction between capital appreciation and income. And however much some of them might understand it, ignoring the validity of that distinction is too good a propaganda opportunity to be passed up.

And so when ProPublica, “an independent, nonprofit newsroom that produces investigative journalism with moral force” “obtained” and then, in an article by Jesse Eisinger, Jeff Ernsthausen, and Paul Kiel, publicized some of the details of “a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing,” much of the secondhand reporting of their story, not to speak of the ProPublica article itself, followed an all too predictable script.

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Turning the Corporate Left's Own Tools against It

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To say that tackling woke capitalism will not be easy is an understatement. Its ascent is the product of, among many other factors, the political challenge posed to free markets by a misunderstood financial crisis, the relentless leftward drift of our institutions, and, as always, the jockeying for power — and its prizes — among our elites. And then there is the manner in which anxiety over climate change — a key contributor to the current effort to redefine the nature and purpose of a corporation — is being used to overturn many of the economic and political assumptions on which our society is organized, thus intensifying what is already a perfect storm. Oh yes, there is also the small matter of the Democrat several months into his term in the White House, and the kind of president that he is proving to be.

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The Sound of Silence

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The Middle Ages,” wrote Carl Jung in a 1958 book about UFOs, “have not died out. . . . Mythology and magic flourish as ever in our midst.” I doubt if Monica Black, a professor of history at the University of Tennessee and the author of A Demon-Haunted Land,an intriguing, subtle, and occasionally startling examination of a wave of superstitious belief that swept across Germany in the immediate post-war years, would disagree. Certainly, Black recognizes the fascination that supernatural ideas and practices, from astrology to the occult, held for millions of Germans “across the modern period” as well as the persistence of a long-standing tradition of folk and magical healing.

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