This blog entry is another plea for less focus on building wealth for shareholders. Importantly, it is a plea from within a capitalist framework: it isn’t a criticism of capitalism itself, but a plea for a new approach hoping to make capitalism work better. >>>
LINK: ORIGINAL HEADLINE (by Will Hutton in The Guardian)
…Free-market apologists insist that the more cash is handed back to shareholders, then the more they have to invest in innovation. The stock market is doing its job: promoting efficiency. The trouble is that everyone can see it’s 100% wrong. The market is hopelessly inefficient, greedy and myopic. When Larry Page and Sergey Brin floated Google, they took care to insulate the company from “quarterly capitalism”: they accorded their shares as Google’s founders 10 times the voting rights in order to protect their capacity to innovate from the stock market – what they considered Google’s real business purpose…..
What do you think?
Note: Hutton makes use of the term “stakeholder capitalism,” a term popularized by business ethics professor Ed Freeman. For a review of the book Freeman co-wrote on that topic, Managing for Stakeholders, see here: Managing for Stakeholders (Book Review)