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Stakeholder capitalism: Difference between revisions
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Of course the disenfranchised minorities at the margins of our community need a voice. As we argue [[Critical theory|elsewhere]], an optimal society is pluralistic, tolerant, defends those at the margins and, [[all other things being equal]], prefers their interests when they conflict with a majority that is perfectly able to look after itself. But the question is not ''whether'' to protect their interests, but ''how''. There are plenty of better ways than through stakeholder capitalism: representative democracy, for a start. | Of course the disenfranchised minorities at the margins of our community need a voice. As we argue [[Critical theory|elsewhere]], an optimal society is pluralistic, tolerant, defends those at the margins and, [[all other things being equal]], prefers their interests when they conflict with a majority that is perfectly able to look after itself. But the question is not ''whether'' to protect their interests, but ''how''. There are plenty of better ways than through stakeholder capitalism: representative democracy, for a start. | ||
But even so, shareholders are not monolithic investing homunculi: they are ordinary people with disposable income. If they want to beautify the inner city, save polar bears or fight water scarcity, they can do that directly. That is a far better way to allocate capital. It puts control in the investors’ hands, where it should be. Investors do not need to channel their charitable activity through the medium of their equity portfolio. And why would they? | But even so, beyond their shareholding, shareholders are not monolithic investing homunculi: they are ordinary people with disposable income. If they want to beautify the inner city, save polar bears or fight water scarcity, they can do that ''directly''. There are charities whose very mandate is to agitate for just that. That is a far better way to allocate capital. It puts control in the investors’ hands, where it should be. Investors do not need to channel their charitable activity through the medium of their equity portfolio. And why would they? | ||
We cannot fathom the moral agenda — if there is one<ref>And honestly, is there likely to be a moral dimension to investing in a ''bank'' stock?</ref> — behind an investor’s decision to invest in a bank stock. Who knows if they care about water scarcity, or polar bears? But if the alternatives are “assume | We cannot fathom the moral agenda — if there even ''is'' one<ref>And honestly, is there likely to be a moral dimension to investing in a ''bank'' stock?</ref> — behind an investor’s decision to invest in a bank stock. Who ''knows'' if they care about water scarcity, or polar bears? But if the alternatives are “assume shareholders are basically after a capital return” or “let the chief executive decide what the moral priorities of her shareholders should be”, then it is not a difficult choice. | ||
A bank should prioritise prudent lending standards and timely risk management. It should stick to its knitting. Governments, NGOs, supra-nationals and dedicated charities with resources, expertise and focus can deal with water scarcity. If bank shareholders want to address water scarcity, they can give their disposable resources to water scarcity specialists. That is surely more effective than buying bank stocks. | A bank should prioritise prudent lending standards and timely risk management. It should stick to its knitting. Governments, NGOs, supra-nationals and dedicated charities with resources, expertise and focus can deal with water scarcity. If bank shareholders want to address water scarcity, they can give their disposable resources to water scarcity specialists. That is surely more effective than buying bank stocks. | ||
===About those executives=== | ===About those executives=== | ||
The proposition that a disembodied pile of papers is intrinsically psychopathic is a bit far-fetched. The proposition that the collected shareholders of all listed companies in the world are all psychopaths is even more far fetched. | The proposition that a disembodied pile of papers is intrinsically psychopathic is a bit far-fetched. The proposition that the collected shareholders of all listed companies in the world are all psychopaths is even more far fetched. By contrast, the idea that, against the average, that minute class of executives who make it to the top of the greasy corporate pole have an element of the sociopath to their personalities? We do not find that especially far-fetched at all. Now — if we allow for a cynical moment that it might be the case — ask yourself this: | ||
Is it ''really'' wise to delegate responsibility for deciding your moral priorities a small group of mainly white middle-aged men with an unusual propensity towards psychopathic behaviour? For that is what stakeholder capitalism advocates. | |||
{{sa}} | {{sa}} | ||