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1. As previously mentioned, I've been increasingly concerned by the political and economic ramifications of #COVID19.
Top of mind is the #GreatReset: an initiative proposed at the World Economic Forum's annual meeting in #Davos earlier this year. https://twitter.com/OrangePartisan/status/1327996834883710976?s=20
Top of mind is the #GreatReset: an initiative proposed at the World Economic Forum's annual meeting in #Davos earlier this year. https://twitter.com/OrangePartisan/status/1327996834883710976?s=20
2. The #GreatReset sees the present as an "opportunity" to "shape the [global] recovery" from #COVID19, by determining the "direction of national economies, the priorities of societies, the nature of business models and the management of a global commons" https://www.weforum.org/great-reset
3. More interesting still, the #GreatReset intends "to build a new social contract that honours the dignity of every human being."
How ambitious.
Now, if this doesn't raise your hackles, I can't imagine what would...
How ambitious.
Now, if this doesn't raise your hackles, I can't imagine what would...
4. I've been diving into the details of this #GreatReset initiative, and I plan to convey my findings to a wider audience here, keeping in mind that some of the vernacular and platitudes aren't accessible to the general public. So I will do my best to keep it simple and accurate.
5. One aspect of the #GreatReset I find particularly troubling is the initiative's embrace of "stakeholder capitalism," as opposed to "shareholder capitalism" to realize its goals...
6. To the uninitiated, these terms may seem ambiguous, but they are radically different and portend danger on the horizon.
"Shareholder capitalism" (aka "shareholder primacy"), as defined by the economist Milton Friedman, is the idea that... https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html
"Shareholder capitalism" (aka "shareholder primacy"), as defined by the economist Milton Friedman, is the idea that... https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html
7. ...the major goal of every corporation should be the maximization of shareholder value. Therefore, corporations first and foremost to their shareholders. Shareholder capitalism is an orthodoxy here in the United States and has been codified into law ("fiduciary duty")...
8. Why it matters? Not only is shareholder primacy an important pillar of American capitalism, but it provides a realistic and achievable aim for business managers. It also encourages responsibility and accountability, and creates a framework for performance metrics...
9. If a manager has a duty to maximize profits, he is directly responsible to someone other than himself. Failure to perform this duty makes him accountable to shareholders. In a market, this concept makes for a stabilizing rule by which companies can effectively compete.
10. "Stakeholder capitalism," on the other hand, replaces well-defined shareholders with a potentially unlimited number of "stakeholders"- customers, employees, managers, shareholders, governments, society as a whole... https://www.weforum.org/press/2020/01/stakeholder-capitalism-a-manifesto-for-a-cohesive-and-sustainable-world
11. Therefore, under stakeholder capitalism (which largely defines capitalism in Europe), a firm should not merely strive to maximize profits, but also attempt to "make the world a better place" and tackle important social/economic/environmental issues that impact stakeholders...
12. Why it matters? Unlike shareholder primacy, which establishes a realistic, measurable, and clearly-defined duty to a definable party, stakeholder capitalism saddles firms with innumerable responsibilities to a nebulous body of stakeholders...
13. While a firm attempting to "save the world" from climate change may seem desirable to some, we should keep in mind that a responsibility to all is responsibility to none. Moreover, without an achievable, universal objective, it's nearly impossible to enforce accountability...
14. Furthermore, this construct invites corruption, fraud, and malfeasance, and makes feasible performance metrics difficult. For if a manager has a "social responsibility," how do we measure that? How do we separate selfish interests from hazy societal interests?
15. We see this problem manifested in the way governments wage never-ending social crusades while quietly enriching policymakers and their cronies. How often do we see political solutions serve greedy elite interests?
This problem lies at the heart of rent-seeking.
This problem lies at the heart of rent-seeking.
16. In a corporate context, firms guided by stakeholder capitalism tend to disguise good, old-fashioned profit maximization with elaborate woke window-dressings; @Apple gives millions to #BlackLivesMatter 
, while relying on child slave-labor to mine cobalt in the Congo.
, while relying on child slave-labor to mine cobalt in the Congo.
17. It's no wonder the Davos crowd prefers stakeholder capitalism to shareholder primacy: the global donor-class can ostentatiously tackle the impossible problems of our age while enriching themselves and remaining unaccountable to anyone.
Imagine the possibilities.
Imagine the possibilities.
