Stanford-Hoover's John Taylor thinks that the main threat to economic freedom is... the Business Roundtable. At least, that is the only threatener of economic freedom that he names. And the point is really weird. In all long-term win-win economic relationships the duties of managers and representatives are always diffuse: they are agents not just of their formal principals but of all those whose participation is essential to the value creation process. Recognizing this... is not a threat to freedom. And I do not understand what kind of mind thinks it is. To understand that myopic grabbing for every resource you can grab in the short run destroys the trust without which a productive economy is impossible is... a very obvious point in management, political economy, and moral philosophy, isn't it?: John Taylor: The New-Old Threat to Economic Freedom https://www.project-syndicate.org/commentary/socialist-threat-to-economic-freedom-by-john-taylor-5-2020-02: 'Achieving economic freedom is difficult: one always must watch for new obstacles.... Many such obstacles are simply arguments rejecting the ideas that underpin economic freedom.... Even the Business Roundtable is weighing in, announcing last August that US corporations share “a fundamental commitment to all of our stakeholders,” including customers, employees, suppliers, communities, and, last on the list, shareholders. That is a significant departure from the group’s 1997 statement, which held that, “the paramount duty of management and of boards of directors is to the corporation’s stockholders; the interests of other stakeholders are relevant as a derivative of the duty to stockholders.” Moreover, as that earlier statement was right to point out, the idea that a corporate board “must somehow balance the interests of stockholders against the interests of other stakeholders” is simply “unworkable.”...


#noted #2020-03-07

Comments