Economist: Corporate Incentives are Destroying Capitalism

January 26th, 2014
in econ_news, syndication

Econintersect:  Marshall Auerback interviewed William Lazonick recently.  Lazonick is Professor of Economics at the University of Massachusetts Lowell and Co-director of  the Center for Industrial Competitiveness.  He presented a thesis that the concept of maximizing shareholder value which entered the governance equation for corporations in the early 1980s is not a constructive factor for competitiveness but is in fact purely an extractive mechanism.  The financialization of corporate management has been a negative influence on the growth of capitalistic ventures because it has discriminated against investing for future growth.

WilliamLazonick-380x190

Follow up:

The interview covers 17 minutes and describes how modern financialization is destroying capitalism.  Such things as stock buybacks are actually market manipulation activities and are in fact a fraud (currently legalized) for extraction by executives that was illegal before 1982.  The title of the interview is The Myth of Maximizing Shareholder Value.

John Lounsbury

Notes:

  • Marshall Auerback has contributed to Global Economic Intersection.














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