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Stakeholder capitalism: Difference between revisions
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But on that one subject, they are totally, magically, necessarily aligned: each among them will say, “whatever else I care about in my life, members of the board, know this: ''I expect you to maximise my return''.” | But on that one subject, they are totally, magically, necessarily aligned: each among them will say, “whatever else I care about in my life, members of the board, know this: ''I expect you to maximise my return''.” | ||
===About that | ===About that “return”=== | ||
Now you might argue that, as we are all shareholders in one way or another, stakeholder capitalism is really no more than “paying attention to shareholders’ ''wider'' interests, not just their pecuniary ones.” This way, polar bears only get a look in to the extent it is in the collected shareholders’ wider interests that they be protected. | |||
Long ago, our forebears<ref>No, not enlightened, white, male, cis-gendered, colonial oppressors: ancient Babylonians.</ref> figured out how to distil pure, abstract, immaterial ''[[value]]'' from the relativising commodities or perishable [[substrate]]s in which it is usually embedded:<ref>Granted, it is imperfect: until recently much cash did have a substrate (paper send coins), and its value is still coloured by the credit consensus of its issuing bank, which can control its supply and demand, but the substrate issues are largely resolved, and consensus in the bona fides of the [[Federal Reserve]], [[ECB]] and [[Bank of England]] has proven a lot more robust | But, that isn’t ''stakeholder'' capitalism: that’s just a stupider version of ''shareholder'' capitalism. It is stupid because it displaces the shareholders’ moral judgment for that of the [[CEO]]. That is not the deal, readers. The [[CEO]] is the shareholders’ ''servant'': the steward of their capital. The CEO doesn’t get to moralise on the shareholders’ behalf. And — see below — if you had the pick the ''last'' bunch of humans on Earth to whom you would delegate the collected moral imperative, it would surely be the professional managerial class. | ||
In any case, to substitute the shareholders’ putative wider interests — who knows what they are? — for their narrow financial one is to miss the single insight of shareholder capitalism. For, as long as you do not, there can be no dispute about what counts as a shareholder return, or how one should measure it. | |||
Long ago, our forebears<ref>No, not enlightened, white, male, cis-gendered, colonial oppressors: ancient Babylonians.</ref> figured out how to distil pure, abstract, immaterial ''[[value]]'' from the relativising commodities or perishable [[substrate]]s in which it is usually embedded:<ref>Granted, it is imperfect: until recently much cash did have a substrate (paper send coins), and its value is still coloured by the credit consensus of its issuing central bank, which can control its supply and demand, but the [[substrate]] issues are largely resolved, and consensus in the ''bona fides'' of the [[Federal Reserve]], [[ECB]] and [[Bank of England]] has proven a lot more robust than that of whatever anonymous collective coded the crypto currency do jour. Don’t @ me, [[bitcoin|Satoshi]] freaks.</ref> [[cash|''money'']]. How a given person values of a bushel of sorghum depends on the circumstances. Its value, even at a single moment in time, is relative to its consumer. Not so, cash. | |||
[[File:CEO compensation.png|thumb|CEO compensation in thousands (blue) mapped against worker compensation in thousands (orange it’s the flat line hugging the ''x'' axis) and performance of the S&P500 (grey). For some reason there seems to be an elephant in the room, too.]]So, in discharging their sacred quest, [[Chief executive officer|those stewarding the affairs of corporation]] could not have clearer instructions: should the return they generate, ''valued in [[Cash|folding green stuff]]'', not pass muster, there will be no excuses. | [[File:CEO compensation.png|thumb|CEO compensation in thousands (blue) mapped against worker compensation in thousands (orange it’s the flat line hugging the ''x'' axis) and performance of the S&P500 (grey). For some reason there seems to be an elephant in the room, too.]]So, in discharging their sacred quest, [[Chief executive officer|those stewarding the affairs of corporation]] could not have clearer instructions: should the return they generate, ''valued in [[Cash|folding green stuff]]'', not pass muster, there will be no excuses. | ||