I was reading in the Journal about how Starbucks has appointed a Black woman as Chair of its Board. And a most impressive one at that, Mellody Hobson of Ariel Investments. This comes within a flurry, nay a veritable blizzard of ESG actions on the part of various players throughout the corporate world, including yours truly.
I have been tempted to go back to Milton Friedman and review his classic arguments around the primacy of shareholder interests in corporate governance, the idea that it is the business of business to make money.* This revolves around the idea that you have a vigorous public sector acting in the public interest counterbalancing the for-profit sector.
But then Republicans have been trying to squeeze the government from all sides, arguing that it has been too big and dysfunctional, that more should be left to the private sector. They argue -- citing de Tocqueville -- that the unique character of America's voluntary associations should provide for many key social support services. But that hasn't worked at scale. Charitable giving remains stuck at 2% of GDP, many people are working too hard just trying to get by in their silos to give back much, however much they would like to. In a sense, a true granular division of labor across the economy where every actor focuses on enhancing returns for herself doesn't provide for much giving back, an inherently lossy activity.
So acting for the public weal has been pushed back onto for-profit entities, for better or worse.
* I was interested to learn recently that Friedman had a very influential TV show "Free to Choose" on PBS, and I see on YouTube that he showed up on Phil Donahue's show dispensing soundbites of grandpa-like crotchety wisdom. This bears investigating.
No comments:
Post a Comment