Tag Archives | capitalism

Capitalists Arise!: Serve Stakeholders

Peter Georgescu

Peter Georgescu

Peter Georgescu’s Capitalists Arise!: End Economic Inequality, Grow the Middle Class, Heal the Nation correctly identifies short-termism and a focus on stock price as a problem contributing to growing wealth inequality. His solutions depend on enlightened managers and boards to transform how America does business by taking all stakeholders into account, not just shareholders. I say, don’t count on enlightened self-interest by those now in control. They are unlikely to overturn the system that benefits them.

Transformation is not likely to come from those in power, even if it would be to the advantage of all. Transformation must be demanded from below. Any transformation system that purports to consider all stakeholders must effectively redistribute power. We cannot depend on benevolent dictatorships like Facebook’s Mark Zuckerberg or Alphabet’s Sergey Brin and Larry Page to act as if all stakeholders matter. To get where Georgescu correctly wants to go, there must be a real shift in power. Continue Reading →

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Value Creation Thinking: Review

Value Creation ThinkingWhile primarily concerned with explaining value creation thinking and the life-cycle valuation framework, the book also delves into context, specifically how Bartley Madden views evolved.

I find his work compelling, at least in part because he shares my interest in understanding the world from the bottom up, instead of top down. Additionally, he focuses attention on “how we know what we think we know,” which takes me back to my studies in the sociology of knowledge. I am less sure about his embrace of systems theory but he deploys that tool well in the context of analyzing firm performance.

Value Creation Thinking: On Capitalism

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Agency Capitalism: Corrective Measures (Part 1)

In their recent paper, The Agency Costs of Agency Capitalism: Activist Investors and the Revaluation of Governance Rights, Ronald J. Gilson and Jeffrey N. Gordon (January 1, 2013) argue that proposed reforms to accelerate disclosure of equity positions and prohibit certain derivatives would discourage the vital role of activist shareowners. Below, I argue in support of their position and for additional measures to counterbalance the central problem of devalued governance rights. Continue Reading →

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Extracurricular Reading

From August 2011 Harper’s Index:

  • Portion of employers who say they conduct criminal-background checks on potential employees: ¾
  • Chance that an American adult has a criminal record: 1 in 4
  • Percentage of applicants offered undergraduate admission to Harvard this year: 6.2
  • Percentage of applicants accepted for employment on McDonanld’s National Hiring day in April: 6.2

From the July/August edition of Resurgence comes a review of Chandran Nair’s Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving the Planet. by Chandran Nair by Ziauddin Sardar.

Rampant consumerism is the great curse of our time. The driving force is “free market Fundamentalism.” Nair thinks China and India will be forces of change, largely for two reasons:

  1. The US model if unsustainable. Corn, which is heavily subsidized, and where farmers pay nothing for the carbon emissions they generate, is an example of a model which assumes Nature has limitless capacity. That model only works when a small proportion of the Continue Reading →
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