Book contents
- The Profit Motive
- The Profit Motive
- Copyright page
- Dedication
- Contents
- Acknowledgments
- Editorial Note
- Introduction
- Part I The Law
- Part II The Merits
- 7 Possible Merits of the Business Roundtable’s Embrace of Stakeholder Capitalism
- 8 Was There a Business Case for the Business Roundtable’s Embrace of Stakeholder Capitalism?
- 9 Why Did the Business Roundtable CEOs Shift Their Position?
- 10 Why the Business Roundtable CEOs Should Have Stayed the Course
- Conclusion
- Notes
- Index
10 - Why the Business Roundtable CEOs Should Have Stayed the Course
from Part II - The Merits
Published online by Cambridge University Press: 02 February 2023
- The Profit Motive
- The Profit Motive
- Copyright page
- Dedication
- Contents
- Acknowledgments
- Editorial Note
- Introduction
- Part I The Law
- Part II The Merits
- 7 Possible Merits of the Business Roundtable’s Embrace of Stakeholder Capitalism
- 8 Was There a Business Case for the Business Roundtable’s Embrace of Stakeholder Capitalism?
- 9 Why Did the Business Roundtable CEOs Shift Their Position?
- 10 Why the Business Roundtable CEOs Should Have Stayed the Course
- Conclusion
- Notes
- Index
Summary
Stakeholder capitalism results in a loss of accountability, as executives who are responsible to everyone are responsible to no one. Stakeholder capitalism would be extremely difficult to implement. Proposed means of doing so – such as constituency boards, codetermination, and team production – are all unworkable. Stakeholder capitalism is inconsistent with democratic capitalism. Shareholder value maximization is the result that would emerge if shareholder and stakeholders could bargain (the so-called hypothetical bargain). Shareholder capitalism is pro-social. The profit motive results in socially efficient resource allocation. The profit motive is an essential motivational spark for innovation. The profit motive promotes freedom.
Keywords
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- Information
- The Profit MotiveDefending Shareholder Value Maximization, pp. 125 - 168Publisher: Cambridge University PressPrint publication year: 2023