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That interest could be measured in a single dimension: cash profit. Nothing else mattered, and this even put a gate on the extent to which the company’s directors, officers, servants and agents could let their [[agency problem|conflicting personal interests]] colour their pursuit of this noble, singular goal. You cannot hide from after-tax profit. | That interest could be measured in a single dimension: cash profit. Nothing else mattered, and this even put a gate on the extent to which the company’s directors, officers, servants and agents could let their [[agency problem|conflicting personal interests]] colour their pursuit of this noble, singular goal. You cannot hide from after-tax profit. | ||
But we live in a post-millennial world. | But we live in a post-millennial world. [[Corporation]]s are venal, selfish things, riven with [[unconscious bias|bias]], discrimination; they are a product of the West’s colonial history of oppression and wanton marginalisation. [[Adam Smith]], though a vigorous opponent of slavery, back in 1763, is in danger of being cancelled.<ref>https://www.nationalreview.com/2021/03/cancel-culture-stalks-adam-smith-an-ardent-foe-of-slavery/</ref> | ||
[[Shareholder capitalism]], is being rapidly displaced by “[[stakeholder capitalism]]”. This asks corporations to orient themselves not just toward their shareholders, but to act in the best interests of ''all'' their “stakeholders”, being groups who are impacted by the corporation’s operation: its customers, creditors, suppliers, employees, the surrounding community, the environment, the distantly marginalised who suffer invisibly under the awful externalities of the company’s industry ''and'' — last but not least! — its shareholders. | |||
A corporation is bound to increase long-term value for all, and must not maximise shareholder profits | A corporation is bound to increase long-term value for all, and must not maximise shareholder profits at the expense of the interests of other stakeholders. | ||
This view seems so modern, compassionate and intuitively right — so ''fit for [[Twitter]]'' — that it is hard to understand how anyone can have thought otherwise. Yet think otherwise they did — consistently, at times, exclusively — from the publication of Smith’s ''Theory of Moral Sentiments'' onward, through the centuries, through the titans of American commerce, the Chicago School, down until the collective failure of nerve we see before us today. [[Environmental, social, and corporate governance]] is the constant refrain; the business roundtable<ref>https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans</ref> has redefined the purpose of a corporation away from the outright pursuit of profit to instead promote “an economy that serves all Americans”. | This view seems so modern, compassionate and intuitively right — so ''fit for [[Twitter]]'' — that it is hard to understand how anyone can have thought otherwise. Yet think otherwise they did — consistently, at times, exclusively — from the publication of Smith’s ''Theory of Moral Sentiments'' onward, through the centuries, through the titans of American commerce, the Chicago School, down until the collective failure of nerve we see before us today. [[Environmental, social, and corporate governance]] is the constant refrain; the business roundtable<ref>https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans</ref> has redefined the purpose of a corporation away from the outright pursuit of profit to instead promote “an economy that serves all Americans”. | ||