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| Adam Smith, proponent of capitalism |
Joe Biden has promised to put an end to “stockholder capitalism.” This is shocking enough, but his apologists claim that he is merely swearing to reorder the priorities of American companies away from putting stockholders first in the list of stakeholders. (I’m not certain that his assessment is accurate ... maybe at the hedge funds ... but not “real investors.”)
Now, stakeholders are normally defined as customers, employees, ownership (including stockholders), management and the community (also implying the environment). Now, different political factions place different priorities on these stakeholders needs ... obviously the Greens put the environment first and capitalism puts the customer first (Adam Smith’s “invisible hand”). I’m not sure, but I suspect that Biden’s handlers want to put the employees first to buy votes. And we all know the unfortunate trend for the last 50 years to put management wants and needs at the top.
My own prioritization (learned the hard way) would be:
Customers ... because without customers you have no revenue ... and no corporate future
Employees ... because good employees create good products and services which bring in the customers
Management ... because good management attracts good employees ... as long as the management isn’t too greedy which limits the long-term fiscal viability of the company
Community ... a company needs to be a responsible member of the community in which it operates ... but not a panderer (like so many today) which eventually will be self-defeating
Stockholders (ownership) ... if the above are all done well and responsibly, the value of the company will continue to increase. This is what capitalism is all about.
So, by my rankings, Biden might need to do nothing! But, I suspect, he and his merry band of Sociaists may mean something more onerous.
Now, stakeholders are normally defined as customers, employees, ownership (including stockholders), management and the community (also implying the environment). Now, different political factions place different priorities on these stakeholders needs ... obviously the Greens put the environment first and capitalism puts the customer first (Adam Smith’s “invisible hand”). I’m not sure, but I suspect that Biden’s handlers want to put the employees first to buy votes. And we all know the unfortunate trend for the last 50 years to put management wants and needs at the top.
My own prioritization (learned the hard way) would be:
Customers ... because without customers you have no revenue ... and no corporate future
Employees ... because good employees create good products and services which bring in the customers
Management ... because good management attracts good employees ... as long as the management isn’t too greedy which limits the long-term fiscal viability of the company
Community ... a company needs to be a responsible member of the community in which it operates ... but not a panderer (like so many today) which eventually will be self-defeating
Stockholders (ownership) ... if the above are all done well and responsibly, the value of the company will continue to increase. This is what capitalism is all about.
So, by my rankings, Biden might need to do nothing! But, I suspect, he and his merry band of Sociaists may mean something more onerous.
